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Unit 4 - Operations Management - Coggle Diagram
Unit 4 - Operations Management
4.1 The Role of Operations Management
Operations
fundamental activities of organizations
Operations in different sectors
Primary Sector: mining, harvesting, reaping crops
Secondary Sector: manufacturing products in an assembly line
Tertiary Sector: surgery, car washing, waiting in line at a theme park
Quartenary Sector: business consultancy, hosting data
Elements of Operations
Efficiency: keeping costs low and outputs high
quality: final output must be suitable for the intended purpose
flexibility: ability to change according to necessity
innovation: constant search for improvement and development
Link to other departments
Marketing: Operations managers can advise in product extensions and economies of scale
Human resources: Operations managers can advise on financial an non-financial rewards in practice and give feedback
Finance: Operations managers can advise in budgeting and costs, as well as anything money-related
Adding Values in Operations
raw materials + processes = new value
Types of sustainability
Ecological
reducing waste, using less energy, recycling
Social
designing healthy and safe practices for the workplace
Economic
reducing costs, maintaining assets, increasing efficiency
4.2 Production Methods
Types of production methods
Job Production
associated with the highest end of the market, where the emphasis is on quality and originality
clear objectives and careful planning, which means there may be a longer development phase of the product life cycle.
Advantages of job production
higher markups can be executed
final product is tailored to all customers
flexibility
method likely to motivate workers with individual projects
Disadvantages of job production
requires skilled workers, and non-standardized materials
more-time consuming, there is too much consultation with client
labor-intensive
Batch Production
associated with the middle of the market, where the emphasis is on quality and affordability.
Products are still market-oriented; customers are offered customized products
Advantages
economies of scale used to maintain some degree of personalization
higher capability of capturing market share
useful for trialling products
can help deal with unexpected orders
Disadvantages
production time may be lost due to recalibration
stocks may be required to be kept in case of unexpected orders
sizes of batches are dependent on the capacity of the machinery
Mass production
is all about quantity: it refers to the production of a high volume of standardized products with a continuous flow of raw materials along an assembly line.
Labor is usually unskilled, as its main role may be one of quality control or robotic functions.
Advantages
systems needs little maintenance
business able to cater for lager orders achieving economies of scale
labor costs are low (jobs don't require skilled workers)
business can respond to an increase in orders very quickly
Disadvantages
set-up costs are high
breakdowns are costly
business is dependent on a steady demand of orders
inflexible
workers can be demotivated due to automation
sudden change in demand
cellular manufacturing
it is a form of mass production in which the flow is broken up by teams of workers who are responsible for certain parts of the line.
recent attempt to improve mass production techniques by allowing teams of workers to operate as self-contained units or cells
4.3 Lean Production and Quality Management
Lean Production Essentials
less waste
reduce excess stock production, waiting times, lead times and defects
more productivity
produce better in less time by using motivation
Flexible Arrangements
flexible contracts, multipurpose machinery and multi-skilled workers
Kaizen "continuous improvement"
philosophy behind Kaizen is that all workers have something to contribute to improve the way their business operates
Kanban "right place, right time"
idea behind Kanban is to join all of the requirements for the entire project into the streamlined place
allows workers to know what has been done before and what will be done after
Andon "visual feedback"
deals with electronically providing feedback about all processes on the factory floor to all workers
everybody will know when there is an issue happening somewhere in the company, the production team will take action and solve it immediately
Stock Control types
Just-in-case
company will keep producing, regardless of the influx of orders. this will build up a stock, allowing the company to fulfill unexpected large orders or to keep on selling
Just-in-time
production only starts when an order is in place, meaning that you only produce to the amount being purchased. reduces stocking costs.
Cradle to Cradle
refers to production that is efficient and essentially waste-free. meaning, it is at its utmost sustainable form.
to achieve C2C, all waste generated in production needs to be recycled in a way that it can be useful for the original company
Quality Management
Benchmarking
adopting existing standards or using other companies as standards for your own production
Quality Circles
small groups of different workers are formed in order to discuss quality issues from different perspectives
Total Quality MGMT
company-wide approach that aims for zero defects, requires every single worker to be accountable