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  • Created on: 05-02-12 22:52

Introduction to operations management

Enterprise resource planning ( ERP) : logs all of a firms costs, working methods and resources within a piece of software.  This provides a model of the business that can be used to answer questions such as 'when do we need to start working to get stocks made in time for delivery before christmas'.  

Supply chain: the whole path, from suppliers of raw materials through production and storage on to customer delivery.  

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Customer service

Culture: within a business, this means 'the way we do things round here'. 

ISO 9000: the international standards orgainsation has a quality assurance certification system called ISO 9000.  

Mystery shoppers: employed to test customers service by visiting a shop or sales outlet unannounced, and therefore have the same exerience as customers.  

zero training: the opposite of customers in that it implies that staff need neither skills nor positive attitudes to work for the business.  

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Effective quality management

Benchmarking: comparing a firm's performance with best practice in the industry. 

Competitiveness: the ability of a firm to beat it's competitors. 

Right first time: avoid mistakes and therefore achieving high quality with no wastage of time or materials. 

Trade-off: accepting less of one thing to achieve more of another. 

Zero defects: eliminating quailty defects by getting things right first time. 

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Working with suppliers

JIT: ordering suppliers so that they arrive 'just in time'; this means operating without reserves of material or components held 'just in case' they are needed. 

Lead time: the time the supplier takes between recieving an order and delivering the goods.  

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Capacity Utilisation

Downtime: any period when machinery is not being used in production; some downtime is necessary for maintance, but too much may suggest incometence. 

Excess capacity: when there is more capacity than justified by current demand.  

Flexible specialisation: a production system based upon batches of goods aimed at many market niches, instead of mass production mass market. 

Rationalisation: reorgoranisation in order to increase efficiency.  This often implies cutting capacity to increase the percentage utilisation.  

Redeploy: to allocate a member of staff to a new job role, probably because their old job is redundant.  

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making operational descions

highly price elastic: when customers are so focused on price that a small price change can cause a big switch in customer demand.  

higher profit margin: a wider gap between price and unit cost; if sales volumes stay the same, this must increase total profit. 

Natural wastage: the ;natural' annual fall in staff levels caused by employees retiring moving away or finding better jobs elsewhere. 

Operational targets: the numerical goals set by management at the start of the year.  

Rationalisation: re-organising in order to increase efficiency; this usually leads to redundancies.  

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