Capacity and capacity utilisation...
CAPACITY: The maximum output that a firm can produce with existing resources.
CAPACITY UTILISATION: This is the proportion of current capacity used out of full capacity.
(current output over max. output) x 100
OPERATIONAL TARGETS: These are usually specific and measurable objectives set for each operations activity of a business. Eg.. reducing variable costs, developing new products, and quality control.
THE OPERATIONS FUNCTIONS:
- Range of products.
- Development of products.
- Reliability of project.
- Quality standards/ customer service.
- Supplies/ supplier relations.
- Raising productivity/ flexibility.
WHY SET OPERATIONAL TARGETS?!
*To improve operational efficiency---> converting resources into output!
NON STANDARD ORDERS..
Do we accept the orders?
+ If another order is likely.
+ Importance of customer.
+ Whether potential customers exist for the product/service.
Dealing with operational problems?...
SUB-CONTRACTING: Delegation by one firm of a portion of its production process, under contract to another firm, including in another country.
Outsourcing, hire more equipment, temporary employees.
MATCHING PRODUCTION TO CUSTOMER DEMAND...
DEMAND: The amount of a product or service that customers are willing and able to pay for at a given time.
If customer demand is constant, it is easier to predict, therefore this problem is reduced.
WAYS OF MATCHING PRODUCTION WITH DEMAND>>>
OVERTIME as this increases output, as staff are available for more hours, using existing resources of the business.
!! DOWNsides to this are= staff payed at higher rate, and workers may slow down production to make sure that OVERTIME is worked/ met.
Using temporary/part time staff, sub-contracting, managing stock efficiently= Rationalisation- reorganising resources to cut costs..leading to a cut back in capacity.
* *CUSTOMER SERVICE* *
CUSTOMER SERVICE: The provision of service to customer before, during and after purchase that meets customer expectations.
METHODS OF MEETING CUSTOMER EXPECTATIONS....
Market research * The collection, collation and analysis of data relevant to a business succeeding. (Relevant to making marketing decisions.) - Need to know and understand customer expectations in order to meet them and fulfil customer needs. E.g focus group/questionnaire... primary research.
TRAINING- So that staff know what is expected of them. Employees need to have enough information and delegated power to make small, pleasing customer decisions.
Most used methods of monitoring customer service.. TRACKING SURVEYS- Monitor how a company's customer service is changing, useful for comparing service in different regions. Using IT to encourage customer feedback. www... blogging.
IMPROVING CUSTOMER SERVICE..
1. Overall quality of product or service. *Higher profit, USP, DIFFERENTIATE
2. Treated as a valued customer. FROM MARKET, LONG-TERM
3. Speed of service. PROFITABILITY.
4. Friendliness of staff.
5. Efficient handling of complaints.
6. Accurate information provided.
7. Competence of staff.
8. Ease of doing business.
9. Being kept informed.
10. Helpfulness of staff.
TECHNOLOGY IN BUSINESS...
COMMUNICATION! Helooooo... Information can be passed quickly between departments, businesses and their customers.
E-MAIL: A fast and efficient method of communication- internally and externally. INTERNET: Allows access into international and global markets, means a business can work 24 hrs a day. Customers can check a business' web page for information rather than phoning a helpline or visiting the store itself. INTRANET: Internal communication system, allowing rapid, cheap and frequent internal communication within an organisation.
LOYALTY CARDS: Info, market research, individual consumer info..improve customer service USP
TECHNOLOGY IN BUSINESS...
ComputerAidedDESIGN....>(CAD) Uses computers to design new products, or to make alterations to existing products. CAD produces 3D mock-ups on a computer screen. For that reason managers do not have to wait for a prototype to be built before they know what the image will look like.
+Competitive advantage. +Time saving. +Allow for future editing. +Greater speed. +No physical prototype- saving resources, less waste! +Different versions of product can be aimed at different markets.
ComputerAidedMANUFACTURE (CAM)....> Uses computers to produce a product, usually involving robots or computer numerically controlled machines. (CNC). CAM is often combined with the CAD process. +More efficient when working properly, productive in shorter amount of time, greater capacity, less manual labour, 24/7, do can hazardous, doesn't suffer from illness, better continuity. Quick, consistent quality, less waste, more accurate.
TECHNOLOGY IN BUSINESS...
ELECTRONIC POINT OF SALE (EPOS)- TRIGGERS orders from CHEAPEST suppliers. Computers makes stock control easier. Holding stock information in a database makes it easier to monitor when new stock is required. The EPOS system relies on barcodes to record the products being purchased by the customer. -Re-ordered automatically. .....Technology, therefore allows for more products to be produced with less resources input. As a result, businesses may gain higher profits. In addition, fewer of the environments resources may be used up, reducing waste. ECO FRIENDLY.
SUPPLY CHAIN MANAGEMENT PROGRAMMES: Raw materials, manufacturing goods & consumer. ERP- Soft wear that monitors supply chain through customer and single network. +Not over/under producing, on time, costs reduced.
Technology in business used to be seen as an expensive method of solving problems. However, increased flexibility of applications and the falling cost of hardware have ensured that all businesses
Quality assurance is at every stage of production.
Quality control is at the end.
THE NEED FOR QUALITY: Meeting needs and expectations of customers. Markets are more competitive, customers are more knowledgeable, demanding, prepared to complain, able to share complaints online.
CUSTOMER NEEDS: Performance, appearance, availability and delivery, reliability, durability, value for money.
COSTS OF POOR QUALITY! -Tarnished reputation, hard to regain confidence in brand, wasted materials, recall costs, competitive disadvantage.
QUALITY IS A RELATIVE CONCEPT, NOT AN ABSOLUTE ONE, DEPENDS ON PRICE AND CUSTOMER EXPECTATIONS...
QUALITY ASSURANCE::: Focus on processes, improving production, focus on PREVENTION OF POOR QUALITY! Stresses the need for the worker to get it right the first time, approach often involves self checking by workers of their own output, makes everyone responsible- job enrichment. Emphasises consumer, quality is built into product....insures production process is well controlled, less need for quality control.
QUALITY CONTROL::: Inspection when products are finished. Focus on outputs, sampling and inspection. (INSPECTION PROBLEMS***)- Costly, sometimes too late in the production process, inconsistent inspections, often not compatible with modern production systems, done by inspectors (more expensive than a worker, who could learn from mistake..)....Targeted at production activities, emphasises required standards, defect products are inspected out.WHY IS IT IMPORTANT TO ESTABLISH QUALITY ASSURANCE MEASURES?
+ Involve all staff, promote teamwork, reduce costs of final inspection, gain accreditation for quality awards giving high status, ...ISO 9000 within..EU.
ISO 9000 & TQM.
ISO 9000- award demonstrates that a business has a quality assurance system in place, allowing for quality to be measured, and corrective action to be taken if quality levels fail. _Doesn't show that every product is of the same quality.
HOW TO ACHIEVE ISO 9000
* Have clear and appropriate quality targets. *Have a system in place that ensures these targets are met. * A measuring system to record actual results and resources available if a problem does arise.
TQM-TOTAL QUALITY MANAGEMENT, Essentially an attitude/management philosophy committed to a focus on continuous improvements to a product/ service.
* Involves all employees, based on principle that all employees contribute the overall quality of product/ service.
****Often a significant change to culture and organisation of the business...employees can no longer think that quality is someone else's responsibility, can motivate staff.
ADV. & DISADV. OF TQM...
ADV OF TQM
*Motivational - involves all staff.
*Less waste.. eliminating costs.
- Strong leadership.
- Substantial investment in training and support.
- Became more bureaucratic.
- Disruption costs may cut benefits.
**QUALITY IS A RELATIVE CONCEPT not an ABSOLUTE on
Dependant on customer expectations...CONTROL: Focus on outputs, sampling and inspection, targeted at production activities, emphasises required standard, defect products are inspected out...ASSURANCE: Focus on processes, improving production process, targeted at WHOLE ORGANISATION. EMPHASISES THE CUSTOMER....QUALITY IS BUILT INTO THE THE PRODUCT.
SUPPLIER- "A business or individual that provides goods and services to another business". eg. farmer to supermarket, or fashion retailer....wholesale supply of garments, landlord (shop lease)
SO WHY ARE SUPPLIERS IMPORTANT?
+To meet the desires of customers and their own supply chain which works to also fulfil these in order to make profit.
+Suppliers determine the many costs of the business.
+Important source of finance (TRADE CREDIT)
+Relationship with suppliers...essential for businesses that use lean production techniques.
What makes an effective supplier?
PRICE: Value for money is crucial.
QUALITY: Right product at right time, consis. quality.
RELIABILITY: Delivers correct product on time.
COMMUNICATION: Good relationship = Good deals.
FINANCIALLY SECURE: Long term trading relationship.
CAPACITY: Handle increasing volumes of supply at short notice?
Strategic-Business cannot succeed without the supplier.
Commodity-Goods/service can be acquired from elsewhere.