Processes
- involves skillful bringing together of a no. of inputs, such as finance, equipment, management, tech, materials + people to create the finished product through a series of operations
Inputs
- transformed
- resources used in the transformation process
Transformed - inputs that are changed or converted in operations process
- gives operations process its purpose or goal.
Include: MIC
1. Materials: basic elements used in production, raw or intermediate goods e.g. cloth, stationary
2. Info: knowledge from research, investigation, instruction = increased understanding (external = e.g. ABS, media, internal = e.g. finance reports, customer feedback)
3. Customers: their choices shape inputs e.g. consumer orientation (starting with customer wants) = fulfils needs + interests e.g. email, feedback, surveys → makes operations directly responsive to customer desires
Inputs
- transforming
- carry out the transforming process
- enable change + value adding to occur
- Two main:
1. HR: (interdependence)
→ people with skills + knowledge required to carry out operations functions
→ staff effectiveness can determine success of OP
→ employees most important input in a (b)
→ well qualified, hardworking = productivity + efficiency
→ well-considered job design, appropriate training, flexible work practices + open communication assist in maximising operational efficiency, (b) performance + capacity of (b) to achieve objectives
2. Facilities:
→ refers to plant/factory/office + machinery used in OP
→ need to determine best design/layout (impacts efficiency - time), no., location (close to suppliers?) + capacity of facilities
→ Other considerations: zoning, energy requirements, water usage
→ plant and machinery = significant difference to a (b) + its capacity to transform
→ Highly productive facilities = well designed, well laid out, well lit, integrate modern tech + be labour friendly → if you don’t have = bottleneck (slows down, narrows)
IMPACT - more effective use of tech + improved role descriptions = improvements in CS
Transformation Processes
- conversion of inputs INTO outputs e.g. making something
- MANUFACTURING = transform inputs into tangible products using machinery, robots, tech e.g. cars
- SERVICE BASED = interactions with customers, apply time/skills/experience to assist customers e.g. hairdresser
- Value added = cost of TP adds value, therefore cost should be less than value added
→ interdependence operations + finance - shows r/s b/w operations + finance, therefore cost of conversion must lead to a creation of value → profit.
- the influence of volume, variety, variation in demand + visibility (customer contact)
Volume - demand trends - proactive
- refers to how much of a product is made
- Volume flexibility = how quickly TP can adjust to increases or decreases in demand → adjusting to changes in demand = essential to effectively manage lead times
- want to avoid overproduction, wastage (efficiency) + increased costs - result of slow adjustment to changes in demand
Variety
- range of product made by (b) - mix of products delivered
- wider variety = greater choice to customers
- the greater the variety the more OP’s needed - variation could be new machinery, systems + procedures
- cost money in terms of training + resources = impacting profitability, however, enable wider target market = more customers, greater sales + improved profitability
Variation in demand
- changes in demand = significant changes in OP’s
- Increase = inputs from suppliers, more materials + machinery, HR, hrs + energy
- Decrease = reduce hrs for staff, wastage in materials + pressure from suppliers
- Predicting demand: all (b)’s will try to forecast demand so that adjustments can be anticipated + a (b) can act accordingly
Visibility
- Customer contact or ‘feedback’ can directly affect TP’s
- Direct contact includes: customer feedback (surveys, emails, interviews, warranty claims, letters, wikis, blogs and verbal contact) → important (b) deals with this otherwise it becomes visible to world
- Indirect feedback: customer reviews, review of sales data, that gives an indication of customer preferences + market share data
- sequencing + scheduling
- Sequencing: refers to order of tasks in OP occur
- Scheduling: refers to time taken to complete tasks
- used to ensure TP completed in most efficient order
- key role of tools = perform a detailed task analysis to determine exactly what needs to be completed
- assist managers to set most efficient OP’s
- can be used to improve performance objectives of speed, dependability, flexibility + costs
- monitoring + controlling of S+S = ensure managers have required info to make improvements in processes that allow OP to run efficiently + effectively
- without effective = operate inefficiently = decrease profits + long term viability
- sequencing + scheduling -Gantt charts, critical path analysis
Gantt Charts
- outlines activities that need to be performed, order + length of time
- can be used for scheduling (e.g. store setup, work activities, homework)
- good for a no. of activities + several steps = concurrently
- Advantages:
→ Force manger to plan steps needed to complete a task + specify time restraints
→ Make it easy to monitor actual progress against planned activities + take corrective action
Critical Path Analysis (CPA)
- shows what tasks need to be done, how long they take + order in which tasks should be completed
- shortest time to complete all necessary tasks
- allows managers to see what needs to be completed, if processes can be done simultaneously, + consider timing of all tasks
= improve overall coordination + enables a means of control
- technology
- involves use of machinery + systems that enable (b)’s to undertake TP more effectively + efficiently
- to gain a sustainable comp. adv. (b) need to ensure they implement leading edge tech to compete effectively
- although initial capital outlay of tech = high, it can provide long-term benefits e.g. increased productivity
→ assists employees productivity - POSITIVES:
→ Manufacturing = speed up processes + increase efficiency
→ Services = opens up global markets, new opportunities, increasing efficiency
Main forms: - office tech e.g. computer, EFTPOS, cloud storage
- Manufacturing Tech e.g. robotics (highly specialised, complex tasks), CAD (product possibilities = comp. adv), CAM
- Leading edge tech e.g. AI
- ADV: high quality (increase quality management), minimise waste, don’t have to motivate, no ongoing costs, consistent, operate 24/7, flexible (complex functions), comp. adv., cost-effective (no ongoing labour costs, decreased lead times + waste), increases efficiency
DISADV: training, actual tech (leasing = more cost effective + is tax deductible), possible redundancies
- task design
- involves classifying job activities in ways that make it easy for employees to successfully perform + complete tasks
- requires skills to be grouped together when obtaining staff = allows prospective employees to be screened against required skills needed
- interdependence with HR: job analysis, description + person specification (purpose: improve (b)’s productivity - set tasks, confidence, no confusion)
- Skills audit: formal process used to determine present level of skilling + any skill shortfalls that need to be made up through recruitment or training
- context of (b) goals - task design is breaking down work into series of jobs → contributing to final goal
- process layout
- arrangement of machines + equipment in which they are grouped together by function they perform
- way in which machinery + tech is oriented + arranged in operations plant = strongly shape OP’s - what volume of production is required
- done well = help speed up process by setting out equipment + materials in most efficient way → reducing costs
- Factors to consider:
→ efficiency + flow it wishes to achieve
→ location - distribution of finished product to customers i.e. close to transport = reduce opportunity for damage to finished products + transport costs + improve distribution efficiency
→ minimise movt of
components or semi-finished products during manufacture = reduce production time (lead times) + minimise damage + waste, increase efficiency
Types: - Product layout for intermittent production = high variety, low volume production; different processes for different needs, e.g. work teams, used in banks
- Product layout (mass production/assembly line): high volume of goods of constant quality e.g. cars, station to station + emphasis on flow
- Fixed position layout: employees + equipment come to product; deals with layout requirements for large-scale, bulky activities e.g. construction = more efficient
- Office layout: enable work to be performed efficiently with minimal unnecessary disruption + time wastage (discrete workstations)
- Monitoring, control + improvement
Monitoring
- measuring actual performance against planned performance
- measures all aspects of operations while being arranged around needs of KPI’s e.g. no. of sales a day
- gives managers chance to measure how (b) is going against their predetermined targets
- Common KPIs include: lead times, defect rates, warranty claims, maintenance costs
E.g. monitoring effectiveness of new layout = compare output of old layout with output of new layout over = comparative info, quality of output, lead times i.e. shorter
Control
- when KPIs are assessed against predetermined targets + corrective action is taken if required
- important to ensure (b)’s have strict control over transformation goods = set challenging but reasonable targets to ensure products of highest standard
- crucial to undertake regular performance reviews to indicate any issues + determine if correction action needs to be taken
- operations manager will make changes to TP such as redesigning facilities layout or adjusting level of tech in order to correct problem
Improvement
- systematic reduction of inefficiencies, wastage, poor work + elimination of any bottlenecks (slows down overall processing speed)
- sought in: time, process flows, quality, cost, efficiency
- (b)’s can undertake Six Sigma = products 99.9% defect free + seek continuous improvement through ongoing commitment to achieving perfection (Kaizen)
Outputs
- end result of (b)’s efforts which are the b/s that are delivered or provided to customer
Outputs
- Customer service
- refers to how well a (b) meets or exceeds customer expectations
- when customers unhappy, OP’s need review:
→ products = defective
→ don’t meet quality expectations
→ wait + lead time = too long
→ high rate of returns
→ high amount of warranty claims - CS can improve profit if customers have a positive experience due to customer r/s + return customer
- CS = link b/w marketing + operations
- improved transforming resources + changes to TP e.g. more effective use of tech + increased role descriptions for staff = improvement in CS
Outputs
- Warranties
- promises made by a (b) that they will correct any defects in goods they produce or services they deliver
- no. of warranty claims will signal OP issues - (b)’s can adjust + augment their TP to become more effective + increase dependability
- measure of quality + effectiveness of product
- job of operations department to source any defects in manufacturing + rectify it
- covered under Aus Consumer Law
