Business Section 5 - Operations Management 1

Businesses aim for efficient production

An efficient business will have lower operating costs

Job production - making one item at a time:

• Used for if a firm manufactures individual products
• Each product will have a unique design
• Often high skilled labour is required
• Expensive and take a long time to make
• Examples are ships and aeroplanes

Batch production - making groups of identical products

• Make same products at same time
• When a batch is complete they reorganise and make a batch of something else
• Suitable for products identical to each other but limited quantities

New technology in the workplace

Computer software improves productivity

• Computer aided design (CAD) can be used to create a three dimensional model and make instant changes to the design.
• Computer aided manufacture (CAM) is more accurate than traditional methods

Computers reduce costs and increase efficiency

Customers expect quality from all parts of a business

Should be good quality for their price

Quality can depend on:

• Materials the product is made from
• Production method used to assemble product

Customers may need reassurance before they buy

• Quality awards are evidence of high standards
• Trade associations - membership of certain trade associations can certify the firm meets particular standards - have to abide my a code of practice

Customer service

• Accurate product information - business should know products inside out and give honest  information
• Reliability - products and customer service needs to be reliable
• Dealing with customer concerns and questions - should be shown how the products work
• Fulfilling the order requirements - send them the correct order
• Delivering on time - deliver when you say you will do
• After sales support and warranties - put all problems right

Government policy - consumer protection:

• The product should be fit for purpose
  • Do the job it was designed for
• The product should match it's description
  • Illegal for a retailer to give a false description of something
  • This includes size of quantity of the product
  • Illegal to say a product has been approved in less it has
• The product should be of satisfactory quality
  • Product should be made well
  • Should not cause other problems for the buyer

• Costs less
• Reach international markets

Benefits to consumers:

• Shop at home at any time
• Easy to compare prices between sites
• Encryption software allows card details to be stored securely
• Track the progress of an order

Problems for consumers:

• Impossible to tell whether the site is trustworthy
• Chance card details could be stolen
• Products can't be seen before buying
• Could be difficult to exchange goods or get money back
• Customers receive a lot of direct e-mail

Websites can provide customer services but running a website can be expensive