2.12 Using Technology in Operations Operations Management Using Technology in Operations “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” Bill Gates “The fact that I have entered into IT-related business is proof that businesses have to evolve and keep with time. One has to re-invent.” Kerry Packer

2.12 Using Technology in Operations Using Technology in Operations In this topic you will learn about: Types of technology in operations management Issues in introducing and updating technology

2.12 Using Technology in Operations Types of technology in operations Technology is “the study or use of the mechanical arts and applied sciences” The Oxford Dictionary In a business context technology means the use of tools, machinery and computers. We are particularly interested in how high technology applications can help in operations management. These include: Robotics Automation Communication Design Technology You will need access to the internet to watch this video clip? Does technology have a place in service industries as well as manufacturing?

2.12 Using Technology in Operations Robotics The programming of robots to carry out tasks more traditionally completed by humans e.g. Production processes Sterilising bottles Logistics Picking and packaging Quality assurance Weighing and testing Advantages Accuracy Consistency Speed Resilience Hazardous environments Disadvantages Cost Loss of human touch Initiative You will need access to the internet to watch these video clips? Are robots a good use of limited budgets in the NHS?

2.12 Using Technology in Operations Automation The use of machines to control a process e.g. stock control, production line, warehousing and distribution Stock control More accurate predictions of stock usage through statistical analysis Automatic control of stock levels and reordering Assess data on stock levels and geographical location Retailers use EPOS (Electronic Point of Sale) technology barcodes scanners databases You will need access to the internet to watch this video clip? Stock can now be tracked throughout the supply chain using RFID, (Radio Frequency Identification). Is this a step too far?

2.12 Using Technology in Operations Communication Internal Interdepartmental Operations management could HR about staffing requirements Managing supplier relationships, if for example stock is not delivered it may be because of the business being over their credit limit Order processing Waiters use hand held devices to transfer orders to the kitchen Quality data Telling production workers about the number of defects External Working with suppliers Using EDI (Electronic Data Interchange) to process orders Automatic reordering from a stock control system Sourcing supplies Growth of the internet to find new suppliers Tracking of supply chain Informs customers of the progress of their order Enterprise Resource Planning (ERP) provides a single software solution to coordinate all aspects of a business operation Receives orders Plans production Analyses capacity Coordinates stock Plans delivery

2.12 Using Technology in Operations Design Technology The use of computers in the design stage of developing a product CAD (Computer Aided Design) Used in many professions including  Architecture As well as new product development  Car manufacturing  Tea pots 3D simulations allow for greater degrees of manipulation prior to investment in prototypes Designs can easily be altered to provide a range of options Designs can be tested in changing conditions e.g. wind tunnels You will need access to the internet to watch this video clip? What are the advantages to the designer of using CAD? What are the advantages to the customer of using CAD?

2.12 Using Technology in Operations Issues in introducing and updating technology Benefits – increased competitiveness! Reducing costs Less workers Effective processes Improving quality Consistency Quality Assurance Thorough design and testing But what about the initial capital cost? Did workers have to be made redundant? What if it breaks down? How might workers respond to change? Still needs to be informed by people Cannot show initiative What are the advantages to this chocolate business of not using technology? What other businesses may benefit from not using technology?

2.12 Using Technology in Operations Issues in introducing and updating technology Reducing waste Redesigning Stock control Increasing productivity Speed and consistency Monitoring and control Would an automated process stock if there was an error? Have you ever had a Kit Kat without the wafer? Is there demand to match supply? Will you have to lower price to increase demand? Will the image of your product be affected? You will need access to the internet to watch this video clip? How many business studies references can you spot?

2.12 Using Technology in Operations Activity – Concept Coffee An existing chain of coffee shops is looking to expand their market share with a new concept in coffee houses, Concept Coffee Concept Coffee combines old and new technology to present a staff free coffee house. Customers will use press button vending machines to select their cappuccinos before scanning the paper cups at the end of the line and paying in the same style as self service checkouts in the supermarkets. Stock levels within the machines are automatically updated through chutes from an upstairs store room. Once you have finished with your drinks a simple press of a button sees your table open up and swallow the empties leaving the table clean for the next customer. Identify the types of technology being used within Concept Coffee. Analyse the strengths and weaknesses of these uses of technology to open a coffee house before reaching a conclusion as to whether or not this is a viable expansion plan.