Organising Operations

Managing Operations ► Operations managers organise the operations process. ► Communication, leadership and coordination are essential skills for op managers. ► Effective operation requires careful planning.

Purchasing / Supply Chain Management ► Supply chain is the link between a business and its suppliers who provide the inputs to be used in the operations of a business. ► Supply chain management is concerned with identifying relevant suppliers and coordinating the purchasing of the inputs to be used.

► Supply chain management includes: ► Assessment of location (distance to suppliers). ► Efficiency of delivery ► Stock usage rate ► Uniformity of quality ► Pricing and comparisons with other suppliers.

► Lead times: The time it takes for the business to meet the customer’s needs. Minimal lead times are often described as allowing the business to work in real time (the present). ► Ideal lead times of zero…Instantaneous fulfilment of an order ie Fast food, are almost impossible.

► Supplier Rationalisation: a recent trend for large businesses is to reduce the number of their suppliers. Efficiencies can be maximised and supplier reliability can be rewarded. ► Inputs to be used include: Raw Materials, intermediate goods, finished goods, capital equipment and labour.

► Rostering: is the coordination and allocation of staff as an input. A roster is a plan of the staffing needs of the business ensuring that there are sufficient numbers of staff (with appropriate skills to match the tasks that require completion). Rostering and Scheduling

► Rosters need to take into account: ► Task type ► Leave entitlements (holidays, sickness, long service, maternity leave) ► Working hours: Award hours, overtime, breaks.

Scheduling ► Scheduling is the coordination of the activities of the business. The timing of the activities is crucial to maximise efficiency and avoid bottlenecks or leave productive equipment standing idle. ► Timing and order of activities

Sequencing Tools ► Program Evaluation Review Technique (PERT) ► Gantt Charts. A Bar graph illustrating the order of events highlighting periods of overlap. ► Critical Path Analysis: sequence stages of activity identifying shortest completion time possible.

► PERT and CPA techniques show what needs to be done, how long tasks take, what order is necessary. ► Draw Fig 8.11 and 8.12 ► Activities: Construct a roster for an imaginary Chicken Fast Food outlet called Kanwal Fried Chicken (KFC). ► Complete extension 2 (p.183)

Task Design ► Refers to breaking the business’ core activity into smaller tasks, therefore creating more manageable activities. ► Tasks that are created must be analysed in terms of labour requirements, matching staff needs to available labour. ► Human Resources: Their job is to source the right person. Screening candidates against needed skills and competencies for correct match.

Plant / Office Layout ► Layout refers to the physical space of the business. Factors affecting layout include: ► Sequencing: Production line in proximity to maximise efficiency. Must complement process. ► Size of space needed to maximise production capacity required. ► Manoeuvrability – movement between tasks ► Manageability – overseeing performance

► Safety requirements – OH&S, Fire ► Storage – location of stock and warehousing requirements. ► Staff Morale

Warehousing ► Involves storage of supplies (raw materials, intermediate goods, finished goods) ► Warehousing involves investing the following:  Land, security, stock and supplies, staff and captial equipment (shelving, inventory control systems, forklifts etc)

Activities  Define: Project Production, Process production, Product production  Describe efficient office layout and the use of workstations.  Describe the importance of efficient warehousing.  Revision activity 7

Technology ► Involves applying scientific methods or approving existing methods, process or product. ► Technology uses mechanical or computer aided equipment which makes the task simpler or quicker, thus improving efficiency ► Technology improves production methods, communications systems and delivery systems.