Download presentation
Presentation is loading. Please wait.
1
Nature of Operations Objectives: Describe the activities involved in the operations function. Discuss the impact of operations on a business.
2
Describe the activities involved in the operations function.
3
What Is Operations? Operations: Operations goals: Inputs:
Consists of day-to-day activities for continued business functioning Allows business to keep producing and providing goods and services for customers Means taking inputs and using them to make outputs: Inputs: Employees Raw materials Equipment Capital Outputs: goods and services Adds value to product Operations goals: Efficiency (keeping costs low) Effectiveness (keeping customers satisfied)
4
Operations Acivities:
Production planning Site Selection and Layout Purchasing Quality Control Inventory Control Logistics Scheduling Safety and Security Maintenance and Repairs Expense Control
5
Operations Activities: Production Planning
Foundation of operations—most other operations activities are based on decisions made here. Manufacturing a good or providing a service requires a specific process made up of: This process is called an operating system—every business has one. May be complex or simple People Places Must be planned before production can begin Operating system Must be regularly evaluated and improved Materials Information Equipment
6
Factors to consider when determining business location:
Operations Activities: Site Selection and Layout Factors to consider when determining business location: Costs – Location, Size etc. Labor – availability, wages and unions Community – enough customers, taxes affodable, local laws
7
Operations Activities: Site Selection and Layout
Factors to consider when determining facility layout: Need for office space Need for storage space Need for production areas Type of good/service being produced Sizes and shapes of materials Type of production process
8
Operations Activities: Purchasing
Purchasing—buying goods and services for a business Also known as procuring Businesses purchase: Materials needed to produce goods and services Products for resale Day-to-day supplies and equipment needed to run the business
9
Operations Activities: Purchasing
Purchasers are concerned with obtaining materials, products, and supplies: When they are needed In the right At the best available costs amounts
10
Operations Activities: Purchasing
They work with suppliers to find: Good prices Quality products Reliable customer service Reasonable credit terms Affordable shipping costs
11
Operations Activities: Quality Control
Quality control—ensuring the degree of excellence of a good or service Businesses make sure products meet certain predetermined standards, set by: The company itself Government laws and regulations Standards-setting organizations, such as ISO Large manufacturers that require vendors to meet their standards
12
Operations Activities: Quality Control
Dish Soap Quality inspection—getting rid of “bad” or defective products Quality assurance: Building quality into entire operating system Preventing defective products from being made Placing responsibility on every employee, not just inspectors Benefits of creating quality products: Higher level of competitiveness Lower costs Higher productivity Fewer wasted resources Fewer returns and lost sales Less wasted time
13
Operations Activities: Inventory Control
Inventory control—tracking the amount, kind, and value of inventory Involves a lot of knowledge, planning, and work Key to inventory control—making sure inventory is high enough for business to function, but low enough not to incur unnecessary expenses Holding cost - The money it takes to keep inventory in stock Stockout costs - Costs associated with running out of needed inventory
14
Operations Activities: Logistics
Managing the flow of goods and services from production to consumption Includes all the people, information, and processes involved in storing and transporting goods
15
Operations Activities: Scheduling
Scheduling—operations activity that establishes the timetable to be followed in production Controls the flow of the entire production process Includes sequencing—determining the most effective and efficient route for materials Includes timing—determining when materials will arrive and how long they will stay there Service businesses use scheduling, too
16
Operations Activities: Safety and Security
Employees, customers, and visitors must be protected from: Hazardous materials (chemicals, acids, paints) Hazardous processes (welding, cutting) Ensuring safety requires compliance with: Internal rules/procedures Government standards Certain businesses may also comply with laws regarding environmental safety. Operations managers may also be responsible for security needs (alarm systems, security guards, etc.).
17
Operations Activities: Maintenance and Repairs
Routine maintenance and occasional repairs for: Facilities Equipment Custodial work
18
Operations Activities: Expense Control
At the heart of operations is the bottom line. Operations managers control so many activities and so much of the business’s money—their focus is on efficiency and keeping costs low across the board.
19
Discuss the impact of operations on a business.
20
Impact of Product on Operations
Operations activities vary from business to business, depending on the product. Product affects every aspect of operations. Examples:
21
Operations and Other Business Functions
Operations managers work closely with managers and employees in every other part of the company. They control up to 75 percent of a firm’s assets.
22
Nature of Production Describe the importance of production to an organization.
23
What Is Production? production, pruh-duhk-shuhn, n. The creation of goods and services from economic resources factors of production, fak-ters uhv pruh-duhk-shuhn, n. The resources used in production
24
Importance of Production
Provides form utility Enables companies to stay in business Allows businesses to turn out the maximum number of products at the lowest cost
25
Production Activities
Planning Purchasing—buying the resources needed for production Production process—the way in which production will be carried out
26
Describe the role of purchasing in business.
Nature of Purchasing Describe the role of purchasing in business. A
27
What Is Purchasing? The buying of goods and services for a business
Who does this purchasing? Purchasing specialists Purchasing agents Purchasing managers Procurement managers Buyers
28
What Do Purchasing Specialists Buy?
Raw materials Parts Equipment Finished products Supplies Furniture Uniforms Services
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.