OPERATIONS MANAGEMENT

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  • Created by: _Holly98
  • Created on: 04-04-16 10:09

OPERATIONS MANAGEMENT

INVOLVES PROCESS CONVETING INPUTS INTO OUTPUTS

AIM: ENSURE RIGHT QUANTITY GOODS / SERVICES PRODUCED RIGHT TIME RIGHT COST RIGHT QUANTITY

HOW: PLANNING, ORGANISATION, CONTROL TRANSFORMATION INTO OUTPUT

ISSUE: MUST OFFER MORE BENEFITS THAN COMPETITION / PRODUCE GOODS LOWER PRICE

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EFFECTIVE OPERATIONS MANAGEMENT

PLANNING, ORGANISING & COORDINATING FIRMS RESOURCES PROVIDE PRODUCTS REQUIRED:

  • MEET CUSTOMER NEEDS
  • MEET FIRM OBJECTIVES

OPERATIONS MANAGERS HAVE TO:

  • DESIGN TRANSFORMATION PROCESS
  • MANAGE OPERATIONS PROCESS
  • IMPROVE PROCESS OVER TIME
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STAGES OF OPERATIONS

RAW MATERIALS

MANAFACTURING

TRANSPORTATION

RETAIL

DISPOSAL / RECYCLING

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THE LEVEL OUTPUD

E.G. SMALL FOOD PRODUCER WINS CONTRACT NATIONAL SUPERMARKET WILL HAVE TO PRODUCE LARGER SCALE: INVOLVE:

INVESTMENT EQUIPMENT

MANAGING COMPLEX ORGANISATION

MANAGE GROWTH

TAKE RISK CONSIDERATION

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THE RANGE PRODUCTS

BUSINESS PFFER LEVEL CUSTOMER SERVICE PROVIDE

FLEXIBILITY OF BUSINESS TO BE IN RELATION CUSTOMER DEMANDS

E.G. HOW MANY VERSION PRODUCT, HOW MUCH CHOICE SHOULD CUSTOMER HAVE?

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HOW BEST PRODUCE & PROVICEGOOD OR SERVICE

BETTER USE LABOUR INTENSIVE

INVEST TECHNOLOGY

HAVE CAPITAL INTENSIVE PROCESS

HOW BEST PROVIDE?

E.G. SELL ONLINE OR HIGH STREET

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HOW MUCH PROVIDE YOURSELF OR SUPPLIERS

DECISION IMPACTS

  • RESOURCING
  • QUALITY
  • COSTS

PRODUCER 'UPSTREAM' TOWARDS RAW MATERIALS TAKING ON MORE OF THESE

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ADDING VALUE

DIFFERENCE BETWEEN PRICE FINISHED PRODUCT / SERVICE & COST OF INPUTS INVOLVED IN MAKING IT

ADDED VALUE = SALES REVENUE - COST OF PRODUCTION

PROFIT = SALES REVENUE - COST PRODUCTION - ALL OTHER COSTS

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WAYS ADD VALUE

BUILD BRAND

DELIEVER EXCELLENT CUSTOMER SERVICE

PRODUCT FEATURES / BENEFITS

OPERATE EFFICENTLY 

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BENEFITS ADDING VALUE

CHARGE HIGHER PRICE

USP

PROTECTION COMPETITORS OFFERING LOWER PRICE

FOCUS ON TARGET MARKET SEGMENT

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SIGN START UP IS ADDING VALUE

STRONG GROSS PROFIT MARGINS

  • GROSS PROFIT
  • STRONG SIGNAL

REPEAT CUSTOM

  • SATISFIED CUSTOMER
  • CUSTOMERS GETTING VALUE FOR MONEY

BRAND / NAME RECOGNITION

  • IMPORTANT WORD OF MOUTH RECOMMENDATION
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4 VS:

VOLUME: RELATIVLEY SMALL BUSINESS HAND MADE SHOES TO COKE

VARIETY: BOTTLE WATER HIGH VOLUME LITTLE VARIETY WHEREAS DOCTOR DIFFERENT PATIENTS

VISIBILITY: VISIBLE STAFF RELATION FINAL CUSTOMER, SOME OPERATION LITTLE  / NO CONTACT E.G. PRODUCER CAR PARTS TO SELL CAR PRODUCERS RATHER PERSON BUYING

VARIABILITY: DEMAND NEWSPAPERS CONSTANT DAY TO DAY. DEMAND A&E MORE DEPENDANT ON DATE TIME INCIDENT OCCURED

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OPERATIONS DECISION MAKING PROCESS

IDENTIFYING OPERATIONS OBJECTIVES

ANALYSING EXISTING POSITION RELATION OPERATIONS

CHOOSING ACTIONS TAKEN ACHIEVE OBJECTIVES

IMPLEMENTING DECISIONS

REVIEWING SEE ON TARGET - TAKE ACTION IF NOW

ILLERATIVE PROCESS - BACK AND FORTH DIFFERENT STAGES

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ETHICS & ENVIRONMENT OPERATIONAL DECISIONS

REWARDING EMPLOYEES: INCREASE LOAD INCREASE STRESS LEVELS

LOCATION: LOW WAGE LOCATION GOOD COSTS BUT EXPLOITING WORKFORCE

SAFETY FEATURES: AVOID SAFETY FEATURES PRODUCT REDUCE COSTS

ENVIORNMENT: WORRY ABOUT COSTS? SUPPLIERS TRANSPORT GOODS?

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OPERATIONS, COMPETITIVENESS AND COMPETITIVE ENVIRO

COMPETIVNESS DEPENDS BENEFITS RELATIVE PRICE

EXCELLET VALUE FOR MONEY = COMPETITIVE

OPERATIONS DELIVER ACTUAL GOODS / SERVICES RESPONSIBLE LOT OF COSTS

MAINTAIN EXCELLENCE ONGOING IMPROVEMENTS

VALUE OFFERED IMPROVINNG CONSTANTLY - PRESSURE ALL BUSINESS' REVIEW AND DEVELOP OPERATIONS

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SETTING OPERATIONAL OBJECTIVES

QUALITY

SPEED RESPONSE

FLEXIBILITY

COSTS TARGET

DEPENDABILITY

ENVIORNMENTAL 

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QUALTY

EITHER MANTAINING OR IMPROVING

E.G. COMPANY MAY AIM ENSURE 95% PRODUCES LAST 5 YEARS

AIM REDUCE CUSTOMER COMPLAINTS

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SPEED IS RESPONSE

SPEED IMPORTANT

MEAN DECREASING PRODUCTION TIME / WAITING CUSTOMER TIME

GET NEW PRODUCTS MARKET QUICKLY

CLOSELY RELATED EFFICENCY 

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FLEXIBILITY

NEED TO BE ABLE REACT CUSTOMER WANTS

E.G. NEED VARY AMOUNT GOODS / SERVICES BEING PRODUCED SO VOLUME DOESNT EXCEED DEMAND

SOME COMPANIES DO THIS BY EMPLOYING 0 HOUR CONTRACTS

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COST TARGETS

FIRMS AIM CUT COSTS ESPECIALLY COMPETE PRICE

CUT FIXED / VARIABLE COSTS

RESTRUCTURE REMOVE LAYER MANAGEMENT

INDIVIUDAL PRODUCT REDUCED

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DEPENDABILITY

CUSTOMERS NEED ABLE DEPEND BUSINESS

BUSINESS NEED DEPEND SUPPLIERS

RELIABLE BUSINESS CHARGE MORE GOOD / SERVICES

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ENVIORNMENTAL

PRESSURE CUSTOMERS / GOVERNMENT

LEAD FIRM SETTING OBJECTIVES

E.G. CUTTING CARBON EMISSION

USE RECYCLED RAW MATERIALS

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INTERNAL INFLUENCES OPERATIONAL OBJECTIVES AND DEC

OPERATIONS WORK OTHER AREAS

MARKETING ACTIVIES: DETERMINE WHATS PRODUCED / HOW - CUSTOMER WANT FREE RANGE & QUANTITYS

HUMAN RESOURCES: DETERMINE POSSIBLE. NUMBER SKILLS OF STAFF INFLUENCE PROVIDED

FINANCE: AFFECT LEVEL INVESTMENT IN TECHNOLOGY AFFECT PRODUCTION

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EXTERNAL: POLITICAL & LEGAL FACTORS

GREATER LEGAL REGULATION ON HEALTH & SAFETY

RESTRICTIONS PRODUCTION / HOW AND WHERE

SOME COUNTRIES BAN GAMBLING - ONLINE GAMBLING COMPANIES CANT OFFER SERVICES

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EXTERNAL FACTORS: ECONOMIC FACTORS

GREATER GLOBALISATION SOURCE SUPPLIES EASILY COUNTRIES

REMOVAL BARRIERS TRADE

IMPROVEMENTS TECHNOLOGY / COMMUNICATIONS ENABLED MORE GLOBAL

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EXTERNAL FACTORS: SOCIAL FACTORS

GREATER DEMAND CHOICE / VARIETY

EASY SEARCH ALTERNATIVES

MORE CHOICE ABROAD - CHEAPER AND FASTER

MANAGERS WATCH COMPETITORS WORLDWIDE

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EXTERNAL: TECHNOLOGICAL FACTORS

ADVANCES QUICKER DEVELOP / TEST / LAUNCH PRODUCT

CONSIDER INVEST PRODUCT

ENABLES OPERATIONS EXIST / NEW PROCESSES DEVELOP

CAN DISRUPT INDUSTRY E.G. E-BOOKS AND BOOKS

RADICAL CHANGES EFFECT BUINESS DO / SKILLS REQUIRED

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EXTERNAL: COMPETITION

GREATER DEMAND CUSTOMERS REALISE POWER

BUSINESS TRY OFFER MORE AT REDUCED COST

HARD BALANCE

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CHANGING OPERATIONAL OBJECTIVES

OBJECTIVES DEPEND MANAGER THINKS IMPORTANT

INFLUENCED RIVALS DOING

INFLUENCED RESOURCES BUSINESS

CHANGE E.G. RYANAIR DISAPOINT FINANCIAL PEFROMANCE MORE EMPHASIS CUSTOMER SERVICE

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