Presentation on theme: "OPERATIONS The term production and operations tend to be interchangeable today the main feature of operations is that there is an input, process, output."— Presentation transcript:
1OPERATIONSThe term production and operations tend to be interchangeable todaythe main feature of operations is that there is an input, process, outputwith primary and secondary industries it is easy to identify the 3 elements, not so obvious with the tertiary sectorDefinition could be “bringing a product into being”
2The Role and Importance of Operations Purchasing of Raw Materials to meet Production requirementsManaging StockRole of OperationsUsing quality techniques to ensure maximum quality output is achieved from minimum inputsEnsuring appropriate methods of production are usedWarehousing and distribution of finished products
3The Role and Importance of Operations Operations is important because:it is one of the CORE activities of any businessIt produces the products and services which enable the business to make a profit
4OPERATING SYSTEMS All operating systems have 3 distinct phases Inputs ProcessesoutputsRaw materialsLabourUsing different stocks in order to produce a different productThe actual goods
5Operations Management Operations Management is concerned with the efficient conversion of an organisations resources into goods or services that it has been set up to provide.This can be subdivided into 3 key areas:The purchase and storage of raw materials;The production and storage of finished goodsThe distribution of finished goods
6INPUT, PROCESS, OUTPUT Production Systems Throughout the operations process decisions have to be made about the nature of that process.Planning - What to produce?Production – How to produce it?Purchasing – cost, quantities, quality?Warehousing and storage (including stock control)Distribution – In-house or outsourced?Each of these interact with other functional areas of the Organisation.?
7PRODUCTION PLANNINGPlanning will involve deciding on the best production method forthe type of goods or product the company makes.Ideally production should be at a constant level however this isvery difficult to achieve.It is likely that production levels will vary over time due to:Changes in consumer demandsStaff shortagesMachine breakdownsMaintenance requirements
8PRODUCTION SYSTEMS IN MANUFACTURING This is looking at:the layout of the factory (where each stage of production takes place)by which machine or worker,how many workers/how many machines.The splitting up of the production process into small stages or different jobs is called the division of labour.A successful system will need a flow of stocks from one job to another to make sure that there are no delays due to shortages or bottlenecks
9The main factors taken into consideration when deciding which production system to use are: the nature of the product – different products made in different waysthe quantity to be produced – mass production techniques different to customised productsthe resources available – finance, number and skills of staff, size and capacity of factoryStage of development of business – small businesses tend to have limited capacity and lack of resources as business grows they can extend product range
10The main factors taken into consideration when deciding which production system to use are: Labour intensive vs Capital intensiveLabour intensive is where the cost of labour is greater than the cost of capital. In the UK labour is expensive and therefore there are very few companies which are labour intensive. In other parts of the world labour is cheap and therefore cost-effective.Availability of technologyContinuing developments in technology (CAM,CAD,automation) allow businesses to design, develop and produce products more quickly.Robots can carry out very complicated tasks very quickly and with a high degree of accuracy – they can do jobs which humans can’t and there is less wastage and more consistent quality.
11Labour Intensive Production This occurs when:The cost of labour is cheap and readily availableThe product requires craftsmanship to produceThe business is small and does not have the money to purchase expensive equipmentDisadvantages of labour intensive production:Skilled workers are expensive to payProduction is limited to small scaleCannot take advantage of economies of scaleConsistent quality is hard to achieve
12Capital Intensive Production This occurs when:A standard product is being produced with standard operationsLabour supply is scare or expensiveConsistency of product and quality is requiredeconomies of scale are desirableContinuous production is requiredDisadvantages of Capital Intensive Production:Set-up costs are very highLost production time during breakdowns or maintenance is very costlyIndividual customer requirement cannot be metWorker motivation can be low due to repetitive work
13OPERATIONS QUESTIONSDescribe the role of Operations in an organisation (4)Suggest why operations is considered by many organisations to be important. (2)Describe the main factors which should be taken into consideration when deciding which production system to use (4)Explain the disadvantages of a labour-intensive system of production. (2)Justify the use of a labour-intensive system of production (2)Explain the disadvantages of a capital -intensive system of production. (3)Justify the use of a capital -intensive system of production. (2)Ideally production should be at a constant level for good planning. Outline four factors that might result in variable production levels (4)