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Operations N5 Business Management

National 5 Business Management 2.2 Operations

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Text of National 5 Business Management 2.2 Operations

  • 1. Operations N5 Business Management

2. Role of Operations Operations is about ensuring the right resources are bought and used to make a finished product.Purchasing Stock Control Production Quality Management Distribution 3. Advantages of Operations Management Lower CostsImproved QualityCustomer Satisfaction 4. TASKQuestion Bank1-5 5. Stock Stock exists in 3 types:Raw materials Works in progress Finished goods 6. Stock Management Holding too much stockNot having enough stockStock ready to go when ordered Money can be invested elsewhere in business Stock can go out of fashion or spoilCant fulfil ordersProduction may stopPoor reputation 7. TASKQuestion Bank6-11 8. Stock Control 9. TASKQuestion Bank12-18 10. Purchasing Mix Price Reliability Quality of raw materials Quantity Location Delivery Time Working with Suppliers 11. TASKQuestion Bank19 12. Factors of Production Land all natural resources used in productionLabour all people used in productionCapital - all items used to make other things in productionEnterprise the art of bringing together the other factors of production and being successful 13. Methods of Production Job Batch Flow Added Value 14. How do we select a method of production? The nature of the product itselfIs it labour or capital intensive?Projected sales?Finance availableTechnology available 15. TASK Question Bank20-23In Pairs Describe the Factors of Production for: Shell Oil Royal Bank of Scotland Apple EasyJet 16. Job Production Job Production concentrates on producing one product from start to finish. Once one product is complete, another can begin.It is extremely labour intensiveSome examples: Wedding dress Painting House extension 17. Job Production +/High quality product Can customise orders Workers involved in entire production process from start to finish Production costs likely to be high Production time may be longer Investment in machinery may be higher as specialist equipment may be needed 18. TASKQuestion Bank24-25 19. Batch Production Batch production enables items to be created in bulk (a batch)General purpose equipment and methods are used to produce small quantities of items that will be made and sold for a limited time onlyCommonly used in food production Big Macs Greggs Rolls 20. Batch Production +/Allows flexible production Stocks of partfinished goods can be held and completed later Production runs of small batches can be expensive to produce If production runs are different there may be extra costs and time delays in setting up different equipment 21. TASKQuestion Bank26-27 22. Flow Production Aka continuous production, flow production enables products to be created in a series of steps.Large amounts of goods produced and is highly capital intensive (machinery, automation)Cars are massed produced for a large market using flow production 23. Flow Production +/Economies of scale Standard product produced (opposite Automated of customised) production lines save time and money High set-up costs of automated lines Quality systems can be built into the Repetitive and production boring work 24. TASKQuestion Bank28-31N5 Bus Man 2.2: Operations BEST Ltd 25 25. ICT Task Prepare a presentation which compares the different methods of production: Job Batch Flow Ensure you have appropriate text, images & examples Include some advantages & disadvantages Also include a short quiz to test other learners 26. Quality What is quality?Why is quality important? 27. Definitions of Quality The standard of something as measured against other things of a similar kind; the degree of excellence of something. Oxford English Dictionary"Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. - Peter Drucker"Degree to which a product/service fulfils customer requirements. - ISO 9000:"Number of defects per million opportunities. - Six Sigma 28. Quality is everyones responsibility - W. Edwards Deming 29. Quality Methods Employees Investors in PeopleRaw Materials GIGOQuality ControlQuality AssuranceTQM - Quality Management 30. Total Quality Management Commitment - Everyone is involved in qualityGet it right first time - aims for zero defects & wastageQuality CirclesKaizen continuous improvement 31. Other Quality Methods BSI KitemarkBenchmarkingISO 9000 32. ISO 9000 ISO 9000 is an international standard. Inspectors check if the company: can answer these questions. Does it have a quality policy? Is the policy understood by employees? Does it make decisions about quality systems based on recorded data Are the Quality systems regularly evaluated? Do they have records of where raw materials & products were sourced? Does it communicate with customers about product information, inquiries, orders, feedback, and complaints? Does it plans new product development, with appropriate testing at each stage? Does it regularly review performance? Does it deal with past & potential problems? 33. TASK Question Bank32-38Homework As part of Literacy across learning, you will prepare and present a solo talk on this question: Whatdoes Quality mean to you? 34. Ethical and Environmental Firms now have to socially responsible. They can do this by:Recycling Less waste Biodegradable packaging Low pollution levels Fair employee working conditions Pay workers a fair wage 35. N5 Bus Man 2.2: Operations BEST Ltd 36 36. N5 Bus Man 2.2: Operations BEST Ltd 37 37. TASK Question Bank39-42Go FurtherResearch the following events/issues: Exxon Valdez Bhopal Union Carbide Deepwater Horizon Walmart in China 38. Distribution By road, rail, air or sea? Or pipeline? Decided by: Cost Infrastructure Product/service type 39. An Oil Pipeline in Saudi Arabia 40. TASKQuestion Bank43-48 41. Operations is affected by: Internal FactorsFinanceLabour TechnologyPoliticalExternal FactorsEconomicSocialTechnologicalEnvironmentalCompetitive 42. TASKQuestion Bank49-54