Operations Management (2)

Production and technology:

ICT: The use of electronic technology to gather, store, process & communicate information.

Robot: A computer-controlled machine able to perform a physical task.

·      Advantages:  

            - Manufacturing robots are known for speed, accuracy & efficiency.

            - Are exact & through, achieve high quality, without breaks.

            - Used for repetitive, hazardous & boring task.

            - More accurate than workers, thus increase efficiency & reduce waste.

Computerized stock-control programs: The use of computers to keep records of all stocks & reorders necessary stock automatically.

·      Advantages:

            - Automatic stock control, triggering orders when the reorder stock level        is reached.

            -Bar coding systems, which speed up processing, recording of stock &             customer checkouts.

            -Less labor required & fewer errors made, both improve efficiency.

Communication technology – advantages of access to Internet & email:

            - Intranet system gives rapid & cheap internal communication within             organization.

            - Can improve accuracy & speed of passing information between         operations management department & other departments.

            - Allows supplies to be bough quickly from cheapest online supplier on          the Internet.

Design technology

Computer-aided design (CAD): Using computer-based tools to design products, such as buildings, cars & clothes.

- Advantages:

·      CAD enables designers to lay their work out on screen, print it out as a 3-D image & edit it.

·      New products can be designed & developed more quickly.

·      On screen simulated designs mean there is no need for physical prototypes, which reduces costs.

·      Design data is passed directly to computer controlled machines for production, reducing risk of errors  & wastage & improving firm’s environmental image

·      Large numbers of different designs of a standard product can be made which improves the firm’s ability to focus on different target markets.

Benefits of new technology	Drawbacks of new technology
Lower unit costs of production as technology replaces labor-intensive methods.	Cost of purchase can be expensive & beyond resources of new small firms. However, almost every business can now afford at least one computer as their prices have fallen.
Better communications.	Training of staff is an extra cost, which small firms might find difficult to support.
Quicker & more flexible operations.	Workers can be reluctant to change & accept new ways, as they fear they will lose their jobs.
Better customer service, such as making stocks available as & when needed.

Production and quality:

Quality product: A good/service that meets customers’ expectations & thus is ‘fit for purpose’.

Customer expectations:  The minimum quality standards for a product/service that is acceptable to consumers.

Quality assurance: A system of agreeing & meeting quality standards at each stage of production.

·      A quality product does not necessarily have to be the best possible product available.

·      Customer expectations will be very different for products sold at different prices.

·      Setting standards to high for a product consumer do not expect to last for many years can make the product very expensive & uncompetitive.

·      A cheap good can be considered good quality if it performs as expected.

·      Quality is relative as it depends on the product’s price & the expectations of consumers.

-Advantages of producing a quality good/service include:

·      More satisfied customers

·      A better reputation

·      Lower cost as wastage is reduced

Quality assurance is a method of improving quality standards – works by setting quality standards at each stage for worker.

-Large advantage over traditional method of checking quality for final product –

·      It achieves high-quality products the first time round, not just inspecting for poor quality.

·      Workers should get it right first time, reducing the chances of faulty products.

·      Consumers should be more satisfied & will complain less.

·      Workers are involved in reaching good-quality standards, which is motivating.

·      Components, materials & services bought into the business are checked at the point of arrival.