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Level 89

Operations Management Function

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Operations Management
Is the responsibility of managers engaged to produce goods or services. It is concerned with creating, operating and controlling a transformational process that takes inputs from a variety of resources and produces outputs.
Operation Management's Relationship to Business Objectives
The Operations function is imperative to achieving an organisation's objectives because it is within this function that cost of production and the quality of the finished products are determined therefore directly impacting upon revenue, costs, productivity and, ultimately, profits.
A series of procedures and processes undertaken in order to create outputs
Production Process
The process of transforming resource inputs into finished goods and services
...A collection of raw data from the outside world that is put into the computer
The process involved in converting inputs into outputs. This stage is important, as it is the stage where value can be added to the inputs and productivity gains made due to efficiency in the processes and procedures undertaken.
During analysis, a list of the results that a system must produce.
A measure of the functioning and efficiency of a production system and relates to the level of output obtained from a set level of inputs.
Importance of Productivity
High levels of productivity allows the organisation to be more competitive by minimising the inputs needed to generate a given outputs, this will result in more output per unit of inputs, thereby leading to greater profitability.
Productivity Measures
Units of production produced per employee/unit of wage Cost
Competitive Advantage
A point of difference or superiority held over one's competitors
Facilities Design and Layout
Facilities Design and Layout is used by operations managers to optimise operations. Involves planning the layout of workspace to streamline the production process
Facility Layout
The physical layout of a work environment, e.g. factory, shop, office, warehouse
Optimising the Use of Physical Space
Insufficient workspace will often result in bottlenecks and subsequent blockages in workflows. The workspace, however, must not be too large, as it may hinder productivity if workers have to move around or walk long distances during completion of tasks.
Optimising the Use of Equipments
Equipment must be easily accessible, reliable and operational to maximise its throughput, in order to extract maximum productivity.
Regular Maintenance Program
Regular maintenance of equipments and facilities allows them to be operational. Any piece of equipment lying idle results in lost output and thus, lost revenue.
Types of Layout
Fixed Position/project layout
Fixed Position Layout
Deals with large scale processes such as the construction of bridges, ships, aircraft or buildings.
Process/Functional Layout
Involves pieces of equipment with like functions being grouped
Batch Production
The manufacture of a limited number of identical products; every item in the batch is completed at each stage before they all pass on to the next stage of production.
Product Layout
Deals with the manufacturing of goods in mass volume using an assembly line.
Mass Production
Large-scale production of similar or identical items; usually involves automation and generally the products move to the equipment along a conveyor belt.
Assembly Line
Involves inputs moving along different stages on a conveyor belt.
Virtual Factory
The decentralisation of productive activities so that production does not occur at one worksite; also referred to as decentralisation.
Supply Chain Management
Is the management of the range of suppliers from which the organisation purchases materials and resources.
Is the goods and materials held as stock by an organisation
Inventory Control
Ensures that costs are minimised and that the operations system has access to the right amounts of inputs when required.
Just In Time
An inventory management system that aims to avoid holding any stocks (either as inputs or finished goods); supplies arrive just as needed for production, and finished products are immediately dispatched or sold to customers.
Refers to the degree of excellence of goods or services and their fitness for a stated purpose.
Quality Management
A strategy used by oranisations to ensure that products meet customer expectations.
Quality Control
a process that ensures that the product meets the customers' needs
Quality Assurance
A proactive approach which aims to build quality into work processes, thereby avoiding errors before they occur. May involve the use of an International Organisation for Standardisation (IOS) certification.
Quality Certification
Registration of quality standards for design, development and
Total Quality Management (TQM)
A holistic approach to quality where all members of an organisation aim to participate in ongoing improvement of organisational culture
Quality Circle
A group of workers who meet regularly to discuss quality and
The techniques and equipment used to achieve automatic, as
Computer Aided Manufacturing (CAM)
Also referred to as Computer Numerical Control (CNC), involves the control of machinery, tools and equipment through a computer. Machines are fed programmed instructions from a central
Computer Aided Design (CAD)
A computer program that facilitates the creation and modification
Computer Integrated Manufacturing (CIM)
The combination of CAD and CAM. CIM is a computer program that controls and directs production from start to finish. Computers can
The use of computer-controlled robots to perform manual tasks,
Flexible Manufacturing Systems (FMS)
This is a complete system involving total computer control of the operations system using CAM-based equipment and automated transport systems that deliver component parts and raw materials in the correct quantities just as they…
Technology in Service Industries
E-Commerce e.g. online shopping, banking and marketing
Ethical and Socially Responsible Management of Operations
Social responsibility requires an organisation to reduce economic, social and environmental impacts on the wider community and ecosystem, and looking out for the interests of all stakeholders. A socially responsible organisation builds goodwill and therefore a
Environmental Management Systems (EMS)
Series of policies and practices that focuses on an organisation's
Influence of Waste Minimisation on Ethics
Reduces operating costs, while also minimising the impact of waste
Influence of Recycling on Ethics
A cost-cutting measure that also means less waste is left to be
Influence of Quality Control and Assurance on Ethics
Quality focus during the manufacturing process will mean inefficiencies will be picked up and a better quality product will leave the organisation, which may mean that consumers are protected from faulty products.
Influence of Technology on Ethics
Technology may mean that dangerous and competitive tasks
Influence of Facility Layout and Design on Ethics
A focus on ensuring that the production process operates smoothly and without bottlenecks may also mean less resources and energy used in the production process, thus reducing the impact on some resources