What is the role of the Operations Department
- Purchasing Raw Materials
- Managing and controlling stock
- Organising efficient methods of production
- Quality control - ensuring final products are of a high standard
- Storage and final distrubution of the final product
What are factors to consider when choosing a supplier and importantce of them
- Cost of raw materials - Should be as low as possible to make maximum profit
- Quality of Raw Materials - Determines the quality of finished product
- Lead time - Have to be delivered on time to ensure minimal delays
- Quantity of Raw Materials - There has to be enough materials to complete orders
- Location of supplier - The further away the supplier is the longer the product takes to arrive
- Reliability of Supplier - If supplier doesnt deliver on time it could stop production
- Storage space available - Raw materials could be wasted if they cannot be stored in the correct place
What is inventory management
Controlling stock levels—raw materials, components, and finished goods—to ensure enough is available for production
What is maximum level
This is the most amount of inventory which should be held at any one time
What is minimum level
This is the least amount of inventory which should be held at any one time
What is the Re-Order level
This is the level at which new inventory should be ordered
What is the lead time
How much time it takes from ordering to the goods until they are delivered.
What are problems of overstocking
- storage costs may be high
- money tied up in stock which could be used for other things
- inventory could perish, deteriorate, stolen or become obsolete depending on the type of inventory and how long it is held for.
What is the Re-Order Quantity
This is the amount of inventory required to ensure that there is enough stock for production to continue, however should not go above maximum level
What are problems of understocking
- the business may not be able to cope with an unexpected order if inventory is low.
- if there is not enough inventory, production may have to be stopped
- the firm may have to place orders more often – this causes high administration costs
What is job production
This is where a company produces a single product at a time. The product can be made to specific requirements.
What are Advantages/Disadvantages of Job Production
Advantages
* Increased customer satisfaction as they product is made to specific requirements
* High prices can often be charged because a unique one-off product is being made.
* Designs can be changed to suit each customer’s own requirements
* Workers are involved in the entire process from start to finish which can lead to increased job satisfaction
Disadvantages
* specialist tools and equipment might be needed, which can be expensive to buy
* Cannot always buy raw materials in bulk and might miss out on discounts from bulk buying.
* Can take a long time to make which means labour costs are high
What is batch production
This is where groups of identical products are made at the one time. Different batches can be made by slightly changing the product’s ingredients.
What are Advantages/Disadvantages of Batch Production
Advantages
* Batches can be changed to suit the requirements of the customer
* Raw materials can be bought in bulk, saving money with bulk buying discounts.
* No need for highly skilled workers, so costs are kept low
Disadvantages
* Equipment and employees might not have anything to do between batches
* Any mistakes in one item can result in the whole batch being wasted.
* The cost of each item might be high, if the batch size is small which can result in the cost of the product being higher
What is flow production
This method will make large quantities of identical products. Products are made in a series of stages on a production line where parts are added as it moves long
What are Advantages/Disadvantages of Flow Production
Advantages
* Large amounts of identical products are made.
* Raw materials can be bought in bulk, saving the business money
* Flow production often uses lots of machinery/robots that can work for longer and without breaks
Disadvantages
* The individual customer’s requirements cannot be met because each product is identical.
* High initial set up costs
* If a fault occurs during production this can cause the whole production line to stop.
* Workers may be bored as the work is repetitive
What are some Quality Inputs
- High quality raw materials
- well trained/skilled staff
- using high quality equipment and regular maintenance
How can a business recycle
- Provide recycling bins for different types of waste
- Reusing materials in the production process
What are Advantages/Disadvantages of Recycling
Advantages
* Improve the brand image of the organisation
* Can give the business a competitive edge
* Takes less energy to recycle than to extract new materials
* May be cheaper to produce using recycled materials
* Reduces the amount of waste going to landfill sites
Disadvantages
* Need to be sorted into different categories which takes time to do
* Some items can only be recycled a limited amount of times ie paper
* Recycled products may be seen as inferior
* May reduce quality of the finished product
What are advantages and disadvantages of minimising packaging
Advantages
* Reduce production costs as less materials are required
* Transport cost may be reduced a product is smaller and lighter
* Reduces the amount of waste going to landfill sites
Disadvantages
* Increased risk of product being damaged due to insufficient packaging
* Product may become less attractive to customers
What are benefits of being ethical within operations
- Limits the items ending up in landfills, reduces cost of landfills as less are required
- Improves the image of an organisation
- Can give a competitive edge
- Costs of energy may be lower which will increase profit eg use of solar panels
- Attract customers which could increase market share as they support this belief.
- Customers may be willing to pay more for environment-friendly products
- Government grants may be available to firms who are ethical in their production methods.
How can a business be ethical
- Using renewable energy
- reduce energy consumption
- reduce transport
- prevent pollution
What are some uses of technology in operations
- A computerised inventory control system
- Electronic Point of Sale (EPOS)
- Computer aided manufactue (CAM)
- Spreadsheets
What are some benefits of technology in operations
- Will avoid over-stocking and under-stocking
- Stock levels can be known and tracked at all times
- Can be linked to supplier to allow stock to be automatically re-ordered
- Up-to-date stock levels can be found instantly
- Providing customers with accurate information
- Stock can be re-ordered automatically when the re-order level is reached
- Allows the organisation to keep track of stock rotation dates/perishable items.
- Can search through large amounts of information quickly
