BSNS105 Lecture 6 2013 Semester 1

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Business Studies
Diane Ruwhiu

Lecture 6: Managing Organisations; Organisation of Operations Part Ⅱ Chapter 19,20 Key Focuses of this lecture: - Operational resource planning and control - Operations improvement - Strategic operations management 1. Operational Planning and Control * Planning and controlling processes to deliver desired performance (as per the operations strategy and the parameters set by design) * Planning of Key resources: appropriately design and implemented operating systems. * Balancing capacity and demand: short, medium and long-term planning What is the role of resource planning? Supply side; inputs; transformed/transforming ☞ Outputs; goods and/or services resources… - Objective is to accurately forecast demand so they can produce and deliver the right quantities at the right time at the right cost. - Operations must find ways to better match supply and demand to achieve optimal levels of cost, quality and customer service to enable them to compete with other supply chains. Resource planning and control systems Planning and control is concerned with the reconciliation between what the market requires and what the operations resources can deliver. * That is those activities that provide the systems procedures and decisions which bring together aspects of supply and demand. - Planning, control Web integrated enterprise resource planning Enterprise resource planning (ERP) Manufacturing resource planning (MRPII) supply network requirements planning (MRP) Increasing impact on the Increasing integration of information systems * Enterprise resource planning (ERP) systems: collects, processes and provides information about an organisation’s entire enterprise. (Different models are available; all have similar modules and stages) - Customer needs - Receipt of orders - Distribution of products - Receipt of payments First stage: Balancing Capacity and Demand * Most operations will try to balance capacity with demand - Cost of capacity vs. Expected requirement - Staff available vs. expected demand * Balancing available capacity to expected demand is important - Maintains profitability of operation; efficiency/costs and effectiveness/value * Maintains service level of operation - Response times, queues and quality of experience - * Capacity planning: * Demand: Process of determining people, machines and A measure of requirement from the customer; major physical resources such as buildings, - Operations respond to demand necessary to meet production objectives of the - Often volatile/uncertain demand organisation. - Dependent or independent demand - Planning time horizon: short, medium, - Forecasting long-range - Matching capacity across whole process - Capacity can be fixed or flexible Aggregate planning * Planning how to match supply & product or service demand over a medium period of time * Main approaches to coping with fluctuating demand - Pay overtime, - Temp./part-time/casual staff - Multi-skill staff - Subcontract/outsource - Build inventory Master production schedule Assess capacity and demand requirements: - Specifies capacity requirements; what inventory/resources required? - Provides information on the specific products or services to be offered. Materials requirements planning/Manufacturing resource planning * Computer-based inventory control system that projects the materials needed for goods and services listed in the MPS, and initiates action * Inputs: MPS/Bill of materials, inventory status Capacity requirements planning: Technique for determining what personnel and equipment are needed to meet short term production objectives Inventory The goods that the organisation keeps on hand for use in the production process up to the point of selling the final products to customers * All production operations require * We can use this process to provide visibility: inventory Forecasting Capacity The planning - Raw materials (parts, ingredients, future other inputs to production or service) Aggregate- - Work-in-progress (items being made production planning into a final product) - Finished goods (finished goods, output) Master production * Why is it important? What is its role? schedule - Inventory = $$$$$$ - Manage uncertainty between capacity MRP CRP and demand - Requires extra space, people, & systems Production Today - Can be stolen, damaged or perish - Can become obsolete if held too long Senior management and stakeholders Strategic reporting applications Sales and Financial marketing applications applications Operations Integrated Delivery and applications logistics -ffice staff database applications -ffice staff Suppliers Customers Back Front Purchasing and Service supply applications applications HRM applications Employees Employees * New technologies making it easier to implement; - Latest variations of Enterprise Resource Planning 2. What is operational improvement? “How ever beautiful the strategy, you should occasionally look at the results” – Winston Churchill Developing operational capabilities to further improve performance: - Responding to failure, risk & opportunity Organisational control focus Feedback control model: Focuses on the orga
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