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Unit 5 Operations management

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  1. 5.1 Introduction to operations management

    1. • Analyse the role of operations management • Operations management organizes production of goods and services to meet objectives efficiently

  2. 5.2 Operations methods

    1. • Evaluate job production, batch production, mass/flow production, and mass customization • Method choice affects cost, quality, flexibility, speed, and customer responsiveness

  3. 5.3 Lean production and quality management

    1. 5.3.1(HL)—Lean production features

      • Define features of lean production • Lean production aims for less waste and greater efficiency

    2. 5.3.2(HL)—Lean production methods

      • Apply continuous improvement or kaizen and just-in-time (JIT) • Lean methods reduce waste, stock, delays, and defects

    3. 5.3.3(HL)—Cradle to cradle design and manufacturing

      • Analyse features of cradle to cradle design and manufacturing • Cradle to cradle focuses on reuse, closed loops, and sustainable materials

    4. 5.3.4(HL)—Quality control and quality assurance

      • Analyse features of quality control and quality assurance • Quality control inspects outputs; quality assurance builds quality into processes

    5. 5.3.5(HL)—Quality management methods

      • Apply quality circle, benchmarking, and total quality management (TQM) • Quality management aims to improve consistency, customer satisfaction, and continuous improvement

    6. 5.3.6(HL)—Impact of lean production and TQM

      • Evaluate impact of lean production and TQM on an organization • Impacts may include lower costs, higher quality, improved motivation, disruption, training needs, and supplier dependence

    7. 5.3.7(HL)—Quality standards

      • Analyse importance of national and international quality standards • Standards can improve trust, consistency, market access, and compliance

  4. 5.4 Location

    1. • Analyse reasons for a specific location of production • Location factors include cost, labour, suppliers, infrastructure, market access, government policy, and environmental issues

    2. • Evaluate outsourcing or subcontracting, offshoring, insourcing, and reshoring • Reorganization affects cost, quality, control, flexibility, employment, and reputation

  5. 5.5 Break-even analysis

    1. • Distinguish total contribution and contribution per unit • Contribution supports break-even, pricing, and output decisions

    2. • Construct and interpret break-even quantity or point, profit or loss, margin of safety, target profit output, target profit, and target price • Break-even analysis uses fixed costs, variable costs, total costs, revenue, and contribution

    3. • Analyse effects of price or cost changes on break-even quantity, profit, and margin of safety • Use both graphical and quantitative methods

    4. • Evaluate limitations of break-even as a decision-making tool • Limitations include assumptions about linear costs/revenue, fixed prices, single products, and certainty

  6. 5.6 Production planning

    1. • Analyse local and global supply chain process • Supply chains coordinate sourcing, production, logistics, inventory, and delivery

    2. • Evaluate difference between just-in-time (JIT) and just-in-case (JIC) • JIT minimizes stock; JIC holds buffer stock to reduce supply risk

    3. • Interpret stock control charts using lead time, buffer stock, reorder level, and reorder quantity • Stock control balances availability, holding costs, and supply reliability

    4. • Calculate and interpret capacity utilization rate and defect rate • Calculate and interpret labour productivity, capital productivity, productivity rate, and operating leverage • These measures support efficiency, quality, and capacity decisions

    5. • Evaluate cost to buy (CTB) • Evaluate cost to make (CTM) • CTB and CTM support outsourcing, insourcing, and production decisions

  7. 5.7 Crisis management and contingency planning

    1. • Distinguish crisis management and contingency planning • Crisis management responds to major disruption; contingency planning prepares for possible disruption

    2. • Analyse transparency, communication, speed, and control • Effective crisis management protects stakeholders, reputation, operations, and continuity

    3. • Evaluate contingency planning in terms of cost, time, risks, and safety • Planning can reduce damage but may be expensive and incomplete

  8. 5.8 Research and development

    1. • Evaluate importance of research and development for a business • R&D supports innovation, competitiveness, growth, efficiency, and differentiation

    2. • Analyse importance of developing goods and services that address unmet customer needs • Unmet needs may or may not already be known by customers

    3. • Apply copyrights, patents, and trademarks • Intellectual property protection can support innovation, revenue, and competitive advantage

    4. • Distinguish incremental and disruptive innovation • Incremental innovation improves existing products or processes; disruptive innovation can transform markets

  9. 5.9 Management information systems

    1. • Define data analytics, database, cybersecurity, and cybercrime • Management information systems support data-based decision-making and organizational control

    2. • Analyse critical infrastructures including artificial neural networks, data centres, and cloud computing • Analyse virtual reality, the internet of things, artificial intelligence, and big data

    3. • Evaluate customer loyalty programmes • Evaluate the use of data mining to inform decision-making • Data can improve targeting, loyalty, forecasting, and personalization

    4. • Evaluate use of data to manage and monitor employees, including Digital Taylorism • Employee data can improve control and productivity but raises ethical and trust issues

    5. • Evaluate benefits, risks, and ethical implications of management information systems and technological innovation • Consider business decision-making, stakeholders, privacy, bias, security, accountability, and disruption