operations - introduction & production systems

operations JW Dec 2008 1

OPERATIONS

The term production and operations tend to be interchangeable today

the main feature of operations is that there is an input, process, output

with primary and secondary industries it is easy to identify the 3 elements, not so obvious with the tertiary sector

Definition could be “bringing a product into being”


The Role and Importance of Operations

Role of Operations

Purchasing of Raw Materials to meet Production requirements

Managing Stock

Using quality techniques to ensure

maximum quality output is achieved

from minimum inputs

Warehousing and distribution of

finished products

Ensuring appropriate methods of

production are used

All pupils to take this as a note!


The Role and Importance of Operations

Operations is important because:

it is one of the CORE activities of any business

It produces the products and services which enable the business to make a profit

All pupils to take this as a note!


OPERATING SYSTEMS

All operating systems have 3 distinct phases

Inputs Processes outputs

Raw materials Labour

Using different stocks in order to produce a different product

The actual goods


Operations 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 goods The distribution of finished goods


INPUT, PROCESS, OUTPUTProduction Systems

Throughout the operations process decisions have to be madeabout 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 theOrganisation.

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PRODUCTION PLANNING

Planning will involve deciding on the best production method for

the 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 demands Staff shortages Machine breakdowns Maintenance requirements Add to

notes p60


PRODUCTION 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

Add to notes p60


The main factors taken into consideration when deciding which production system to use are:

the nature of the product – different products made in different ways

the quantity to be produced – mass production techniques different to customised products

the resources available – finance, number and skills of staff, size and capacity of factory

Stage of development of business – small businesses tend to have limited capacity and lack of resources as business grows they can extend product range


The main factors taken into consideration when deciding which production system to use are:

• Labour intensive vs Capital intensive

Labour 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 technology

Continuing 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.


Labour Intensive Production

This occurs when: The cost of labour is cheap and readily available The product requires craftmanship to produce The business is small and does not have the money to

purchase expensive equipment

Disadvantages of labour intensive production: Skilled workers are expensive to pay Production is limited to small scale Cannot take advantage of economies of scale Consistent quality is hard to achieve


Capital Intensive Production

This occurs when: A standard product is being produced with standard operations Labour supply is scare or expensive Consistency of product and quality is required economies of scale are desirable Continuous production is required

Disadvantages of Capital Intensive Production: Set-up costs are very high Lost production time during breakdowns or maintenance is very

costly Individual customer requirement cannot be met Worker motivation can be low due to repetitive work


1. Describe the role of Operations in an organisation. (4)2 Suggest why operations is considered by many organisations to be

important. (2)3 Describe the main factors which should be taken into consideration

when deciding which production system to use. (4)4 Explain the disadvantages of a labour-intensive system of

production. 5 Justify the use of a labour-intensive system of production. (2)6 Explain the disadvantages of a capital -intensive system of

production. (3)7 Justify the use of a labour-intensive system of production. (2)8 Ideally production should be at a constant level for good planning.

Outline four factors that might result in variable production levels. (4)

OPERATIONS QUESTIONS

operations - introduction & production systems

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