gcse yr 10 business - part 1 of operations management

Section 5 Operations Management:

Section 5 Operations Management Operations management used to be called production management. This made sense when the UK economy was dependent on the manufacturing industry, but this is no longer the case. Service industries, such as hotels, hospitals, garages, banks and other tertiary (businesses in the service industry), are now much more important than manufacturing, in terms of output (how many goods and services they create) and jobs Operations management means controlling the resources of the business to make a product or provide a service efficiently and to a satisfactory level of quality

Slide 2:

What is a resource? Definition: Something that can be used; an asset . What types of resources would be used by a small local shop selling groceries, tobacco and newspapers? Answers might include: ● buildings — a shop ● machinery — tills and scanners, computers ● people — shop assistants ● materials — items to be sold in the shop What resources would Nilesh use to decorate a customer’s room? Answers might include: ● labour services ● paint and brushes ● a van to transport materials and staff to customers’ houses

Slide 3:

Operations management Read Deckchair UK needs resources Why is managing operations efficiently important? Need to manage the operation so that all the resources (including people) are used effectively so that costs are minimised Also quality is very important if we want to keep customers happy

Slide 4:

Production methods Production means using resources of land, labour and capital to make goods and services Land = natural resources on the planet Labour = workers, managers etc Capital = man made goods used to produce other goods and service such as machines, computers etc There are several methods but the following 2 are the most commonly used by new and small businesses Job production Batch production

Slide 5:

Production methods Time to teach each other in pairs No. 1 read P74, make notes, create 5 questions. Teach and test number 2. No. 2 read P75, make notes, create 5 questions. Teach and test number 1. Both complete activities 1, 2 and 3 If you can explain something to someone you have learned it well!

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Production methods Job production This type of production process is best for creating products/services that are customised to individual needs Wedding cakes Tailor Dressmaker It is good because no two products or services need to be the same Customer’s special requirements can be met High prices can be charged This type of production is more expensive and is likely to be a lot slower which means less customers can be served in a period of time Labour costs can also be very expensive as the employees will probably need to be highly skilled

Slide 7:

Production methods Batch production This is where groups of identical products can be made at the same time Different designs and styles can be made in different batches A baker would bake batches of different cupcakes A paint manufacturer would make batches of different colour paint An ice-cream manufacturer would make different flavours of ice-cream in different batches The advantage is that this is a cost effective way of producing different products to meet different customer needs The disadvantages are that less customisation can be achieved It can take a long time to switch from one back to another If too many are made in one batch they may be difficult to sell To be profitable there has to be demand for the same style, design or flavour of product.

Slide 8:

What production method? The Flower Shop The Flower Shop, one of the UK’s leading florists, has developed its reputation for the new and innovative, combining great style in flower arranging with an excellent standard of customer service. We have in stock not only the widest range of flowers and foliage (fresh and artificial) but also unusual gifts and accessories enabling us to provide a superb gift and design service. The Flower Shop is a member of Interflora, which means we can send flowers throughout the UK and Ireland and to most countries worldwide. From the largest wedding or business event to the smallest bouquet, we will give each order the individual attention it deserves. Question Why does this business use job production as its method of production? Answers might include: ● customers require different flower arrangements according to circumstances ● it allows the business to charge higher prices ● it can win customers by having high quality flower arrangements

Slide 9:

Production Short Questions – complete and then mark

Recap:

Recap What is job production? What kind of things are suited to job production? What is batch production? Why do we have different ways of producing? To find the most efficient way of doing things? What benefits does a business get out of being efficient? It can reduce its costs Which means what to the business? If it can still keep selling the same amount it can make more profit What else does it get out of being efficient? It can produce quality goods Why are quality goods important? Because it keeps the customers coming back Why is it important to keep customer coming back? They won’t go to the competition Plus we don’t have to spend all that money on advertising and attracting them again – it saves us money again which might help our profits!