5.1 Operations Management

Business Management IV

5.1 Operations Management

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Operations Management

Jan 12, 2022

BibliographyKognity Text Book

-Design and creation of products-Production process -Drawing initial designs, -prototypes -Production of goods and services.

Production is the heart of every business.

What is the the operations management area at Tec responsible for?

What are some of the activities performed by the operations team at a Law Firm, at an icecream factory or at a Cinema?

How does Operations Management relate with other areas?

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The role of the operations management function

Service Sector:-Oversee all processes around customer satisfaction. - Help customer become loyal to the company.

The operations management function is responsible for the production of a firm's goods and services. It depends on the interaction with other areasProduct-based-Design new products -Set up manufacturing facilities -Run factories

HR Management

Ensure right quantity and quality of labour to meet overall business objectives-

-The scale of production-Mass vs niche production-Relocation -Research and development

Mass production is the manufacture of large quantities of a standardised good. Niche production is the small-scale manufacture of a product that is then sold to a specific section of a market.

Accounts and Finance

Ensures that funds are available for a smooth and continuous flow of work.

-Updating Production facilities -Payment system (wages/ bonuses)

The accounts department must have a system in place to ensure that workers and employees receive the correct payment (remuneration) at the correct time.

Marketing

Understand and anticipate the needs and wants of its customers. This will lead to the design of correct marketing strategies.

-Designing the correct marleting strategy -Conducting Market Research: focus groups

5.1.2 Producing Goods and Services

Operations are simply the processes of turning a firm’s resources into goods and services that people want to buy. Firms make a profit by adding value and this is achieved if if the customer is willing to pay a price higher than the direct cost of production.Do you pay the same doing grocery shopping physically than buying through CornerShop?

Factors of Production

What are the four main factors of production?

Land – the actual piece of land or forest, or even the sea, together with all natural resources found on or in it, such as minerals, oil, trees and fish. Labour – human effort. The people who produce the product or provide the service: workers, employees, management. Human CapitalCapital – can be discussed in two ways: the money needed to open a business; or the tools, machinery and equipment used by a business. Entrepreneurship – an entrepreneur is the person who organises the factors of production to create goods and services. This risk-taking activity creates the enterprise or business.

When is a physical space considered land as a productive resource?

-Ice cream factory: there is a dependency on the machinery to be physically held in a space/land. The product can not be produced without this space. -Microsoft engineer's home: the development of new software does not depend on the location where the engineer is working. -WeWork building: in Real Estate, the building is the main productive resource. - Hospital: in order to perform products such as surgeries and medical studies, the use of the space is required. -Consulting offices: consultants usually travel and visit the customers offices, the physical place where they create the product ( ex. business strategy) is not a productive resource. -

Title here

Land

Operations Management

Capital

Title here

Product

Ops. Management

Labour

Title here

Entrepreneurship

Products

Is it tangible?

Yes

No

Service

Good

Products – the output of the operations management department. This could be anything from a haircut (a service) to a lump of coal (a good). Goods – these are products that are largely tangible (you can touch them). Cars, computers and chocolate bars are examples of goods.Services – these are products that are largely intangible (you can't touch them nor stock them). Examples include watching a movie or renting a car. Once the service is finished, there is little physical evidence of what you consumed.

Is this a Good or a Service?

CASE STUDY: -Teams (4-5 people)-Kognity 5.1.2-20 minutes -hand in on paper

Ecological, social and economic sustainability

Sustainability

The ability to continue a behaviour indefinitely.Organise business operations in such a way as to ensure that actions today do not have a negative impact on future generations.

Ecological

Economic

Social

Ecological Sustainability

-The use of the Earth's natural resources and the effect their current consumption will have on future generations. - If everyone on the planet consumed as much as the average person in the USA, four Earths would be needed to sustain them. -Ecological footprint.

Social sustainability

-The ability of a business not only to meet the needs of its current stakeholders, but also to support the needs of future generations of stakeholders. -Impact on suppliers and local communities.

Economic sustainability

-Making the most efficient use of their resources so that the future of the company and its stakeholders is not adversely affected by decisions made today.

Examples

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