1. 1
Introduction to
Operations Management
Higher Grade Business
Management
2006

2. 2
Lesson Objectives:
 Understanding of Operations
Management as an system of inputs,
processes and outputs
 Understanding of why different types
of production may be chosen by
managers

3. 3
Operations
 A memory aid!
 Think of what
happens in an
operating
theatre

4. 4
Operating System
 An Operating System is a
configuration of resources to provide
a product or service
 Raw Materials
 Machinery
 Workers

5. 5
Operating System
 What could we make?
 Paper, Scissors, People

6. 6
Operating System
 We need to be organised
 We need to develop procedures

7. 7
Operations Management
 Operations Management is a
transforming process turning inputs
(resources) into outputs (goods and
services)
 The key here is efficient management
of resources

8. 8
Operations Management
 A Transformation Process
PROCESSINPUT OUTPUT
Information
Finance
People
Materials
Machinery
Goods
Services
Customer/Employee
Satisfaction

9. 9
Some Product Thoughts
 Deluxe Double Chocolate Chip Cookies
 Freddie’s Fish
 Collette’s Computer Manufacture
 Krazzy Kazz’s Cars

10. 10
Input Issues
 Best Price
 Reliability of Suppliers
 Delivery Times
 Quality
 Quantities Available
 Storage Space (Raw Materials)

11. 11
Process Issues
 Average Demand per Week
 Production Capacity Available
 Working Procedures (eg H&S)
 Storage Space (Finished Product)
 Efficiency/Productivity
 Payment Systems
 Quality
 Stock Control

12. 12
Output Issues
 Packaging Individual/Groups of
Items
 Nature/Size of Containers
 Storage Space (Before Despatch)
 Organising Customer Orders
 Transportation (Storage/Customers)
 Customer Requirements

13. 13
A Complicated Function
 Operations Management is a
complex area which can be further
broken down into the following key
areas:
A) planning
B) production
C) purchasing
D) storage and stock control
E) distribution/logistics

14. 14
Planning
 To be most efficient production
should take place at a constant level

15. 15
Planning
 In reality this is not possible:
 Consumer Demand
 Staff Shortages
 Machinery Breakdowns
 Maintenance

16. 16
Production Systems
 How will the manufacturer produce goods?
 Start with the factory layout - where will each part
of production take place? Who will complete?
 The splitting up of production into a number of
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

17. 17
What Production System?
 The Nature of the Product
 Washing Machines
 Bread
 House
 Atlas
 Farming
 New Bridge

18. 18
What Production System?
 Market Size
 Where the firm is producing large numbers of
standard products the production can be
simplified eg Irn Bru
 Customised products for individual clients
need a great deal of client input eg customised
software or stained glass windows

19. 19
What Production System?
 Resources
 Materials
 People
 Buildings
 Machinery/Tools
 Finance
 Time

20. 20
What Production System?
 Business Development
 Small firms, small productions,
production system limited eg Wallace &
Gromit Cheese
 As firms grow they can increase their
capacity and produce a greater variety
of goods

21. 21
What Production System?
 Labour Intensive Systems
 A labour intensive system is one which
relies more heavily on its workforce
than machinery
 ‘Tattie Holidays’
 Strawberry Picking
 Clothing Promotion

22. 22
What Production System?
 Labour Intensive Systems
 Labour is cheaper than machinery
 Skill in craftsmanship required
 Can’t use machinery - working
environment
 Ability required to think/reason/use
initiative/make decisions
 Flexibility in production

23. 23
What Production System?
 Capital Intensive Systems
 A Capital Intensive System is most
common when:
 Supply of labour is limited
 Production benefits from machine
efficiency and consistency
 Production is routine and repetitive

24. 24
Automation
 CAM (Computer Aided Manufacture)
 CAD (Computer Aided Design)
 Robotics
 Allows firms to design, develop and
produce products with high quality
 Ability to make a wider range of similar
products to appeal to different segments
of the market

25. 25
Automation
 Advantages
 Complicated tasks completed quickly
 High accuracy
 Less waste
 Quality consistent
 Disadvantages
 Machinery is more likely to break down
 Narrow range of tasks

26. 26
Sony Walkman
At present, Sony has at least 12 different
versions of the Sony Walkman on the market.
Each has the same basic features, all of
which are made on the same production line.
Using technology in the design and
production of the Walkman can add different
features to each models to appeal to different
consumers.
Prices vary as more advanced features are
added.

27. 27
Activities
Student Activity 1

28. 28
Activities
Wallace & Gromit - Stinking Bishop
 Research and produce a short report on
the production of the cheese Stinking
Bishop and the Wallace & Gromit effect

29. 29
Activities
Sony Walkman Research
 The Sony Walkman has evolved over the
years resulting in products unconceivable
20 years ago
 Create a short report detailing the current
range of ‘Walkmans’, their features and
what market they would appeal to