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  1. business-and-its-environment

    enterprise
    6 主题
  2. business-structure
    6 主题
  3. size-of-business
    3 主题
  4. business-objectives
    3 主题
  5. stakeholders-in-a-business
    2 主题
  6. external-influences-on-business
    12 主题
  7. business-strategy
    10 主题
  8. human-resource-management
    human-resource-management-hrm
    8 主题
  9. motivation
    4 主题
  10. management
    2 主题
  11. organisational-structure
    5 主题
  12. business-communication
    5 主题
  13. leadership
    2 主题
  14. human-resource-strategy
    3 主题
  15. marketing
    the-nature-of-marketing
    7 主题
  16. market-research
    3 主题
  17. the-marketing-mix
    6 主题
  18. marketing-analysis
    5 主题
  19. marketing-strategy
    3 主题
  20. operations-management
    the-nature-of-operations
    3 主题
  21. inventory-management
    2 主题
  22. capacity-utilisation-and-outsourcing
    1 主题
  23. location-and-scale
    2 主题
  24. quality-management
    1 主题
  25. operations-strategy
    4 主题
  26. finance-and-accounting
    business-finance
    2 主题
  27. sources-of-finance
    3 主题
  28. forecasting-and-managing-cash-flows
    1 主题
  29. costs
    4 主题
  30. budgets
    1 主题
  31. financial-statements
    4 主题
  32. analysing-published-accounts
    6 主题
  33. investment-appraisal
    2 主题
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Resources and operational decisions

  • Operational decisions are impacted by, and have an impact on, business resources

  • Business resources include:

    • Capital

    • Employees, including contractors

    • Property and land

    • Machinery and equipment, including IT hardware

    • Intellectual property such as patents

    • Databases and key software and hardware

  • When operational decisions are made, care needs to be taken to ensure that the appropriate resources are in place or that adequate plans are made to ensure that they will be in place when needed

    • This may involve

      • Purchasing new facilities, such as land or property

      • Investing in new production equipment or hardware

      • Hiring new workers or training existing staff

      • Obtaining legal protection for inventions

      • Updating systems to ensure information is up-to-date and complete

  • Without the appropriate resources, operations decisions may be delayed or require significant amendment

    • This may impact on the operations function’s ability to achieve its overall targets and limit its contribution to achieving business objectives

Information technology and operational decisions

  • Businesses are increasingly using a range of technologies to automate production processes

Diagram depicting uses of IT in operations: computer-aided design, computer-aided manufacture, computer-integrated manufacture, and drones.
Information technology can be applied to a range of operations processes, including design, manufacture, safety and logistics

1. Computer-aided design (CAD)

  • The process of digitally creating design simulations of products in 2D or 3D

  • It can also include the use of computer software to create mapping processes for industrial machinery, e.g. the movements required by a robotic arm in a television factory

Evaluating the use of CAD

Advantages

Disadvantages

  • Lower product design costs as the need to produce expensive prototypes is eliminated

  • High levels of accuracy reduce the chance of production errors and defects, leading to high quality output

  • Quicker design development reduces the time taken to bring a product to market

  • Bespoke or complex design software is usually very expensive

  • Design and production employees need extensive training to ensure designs are transformed into finished products effectively

  • Computer processing and storage capacity may need upgrades

2. Computer-aided manufacturing (CAM) and Computer-integrated manufacturing (CIM)

  • Computer-aided manufacturing (CAM) is the use of computers to assist in operations of a manufacturing plant, such as production processes, planning, management, transportation and storage

  • Computer-integrated manufacturing (CIM) is the complete automation of a manufacturing plant, with all processes functioning under computer control with digital information tying them together

Evaluating the use of CAM and CIM

Advantages

Disadvantages

  • Production can take place with minimal human input, reducing labour costs

  • Often linked directly to CAD systems, it allows for mass customisation as changes are be made to work in progress

  • IT-controlled production systems are usually highly accurate, generating high quality output

  • High initial cost of hi-tech equipment that will need ongoing maintenance and upgrades

  • Equipment failure and breakdowns can cause significant disruption to production

  • Output is only as good as the system’s programmer – if faulty code is not detected and corrected, product quality will be impacted

3. Drones

  • Unpiloted aircraft are being used to carry out an increasing range of business tasks, including package delivery, photography and security

    • E.g. Large agriculture businesses use drones to spot failing crops and areas of concern in large fields, mapping boundaries and even applying pesticides

Evaluation of IT in operations

  • The installation and maintenance of IT technology in production is likely to incur significant costs

    • Purchasing IT hardware and software may require external finance, such as loans which will need to be repaid with interest

    • Employees will need training in order to safely and effectively operate technology

    • Down time as technology is installed and workers are trained, it impacts output levels

  • Businesses must be sure that this capital expenditure is outweighed by gains in productivity and improvements in quality and flexibility

    • Higher levels of productivity may only be achieved with high levels of output

    • Automation usually works best in the manufacture of standardised products

    • Flexibility in production refers to how easy it is to install machinery and switch to different machinery which is required to manufacture different products (known as retooling) 

      • The most flexible technology is also likely to be the most costly

Artificial intelligence and operational decisions

  • Artificial intelligence can be used in a range of ways to enhance business operations

    • In financial institutions such as banks and insurance companies, AI systems can identify customers’ financial and behavioural patterns to identify potential instances of fraud

    • In grocery retail, AI systems can be used to monitor and control storage environments, such as freezers, to ensure that products are kept in optimum conditions

    • In manufacturing, AI can be used to schedule upgrades and maintenance to reduce the amount of production down time

  • Robots are programmed to collect information from their environment using sensors and use artificial intelligence (AI) to improve production performance

    • E.g. Hotel chain Yotel employs ‘robotic staff’ that can move around anywhere in the hotels, carrying guests’ luggage, delivering laundry, cleaning rooms and making coffee

Business uses of robots

  • Manufacturing

    • In manufacturing and assembly lines, robots can increase productivity and accuracy

  • Logistics

    • Warehouses and logistics businesses can use robots to move and transport goods

  • Agriculture

    • In agriculture, tasks such as planting, harvesting and spraying crops can be carried out by robots

  • Medicine

    • In medicine robots can be used in surgical procedures to increase precision and reduce the risk of errors

  • Entertainment

    • Robots can be sold as toys or used in amusement parks to provide entertainment

  • Dangerous tasks

    • Remote-controlled robots can be programmed to carry out hazardous testing and R&D processes

    • The use of robots in particular presents a range of advantages and disadvantages related to productivity, quality and flexibility

Evaluating the use of robots in operations

Advantages

Disadvantages

  • Increased productivity, as robots can work continuously without breaks or fatigue

  • Improved consistency and accuracy, as robots can perform tasks with a high level of precision and accuracy

  • Robots can perform tasks that are dangerous or hazardous for humans, improving safety

  • Robots can help reduce labour costs in the long run

  • High initial investment of purchasing and setting up robotic systems 

  • Maintenance costs, as robots require regular maintenance and repairs, which can add to the overall cost

  • Lack of flexibility, as robots are programmed for specific tasks and cannot adapt easily to new situations or tasks

  • Increased use of robots can lead to job losses in some industries

The need for flexibility

  • Businesses should have the flexibility to change output volumes, timescales and product specifications for several reasons

    • The level of demand can change with little warning

    • Supplies may become unavailable

    • Customers may delay orders or require rapid delivery of orders

    • Customers may demand variations to products

  • Flexibility can be improved in a number of ways

    • Outsourcing some production to trusted manufacturers

    • Employing multi-skilled workers and investing in their training and development

    • Holding buffer stock to ensure increased demand can be met

    • Investing in advanced machinery that is capable of mass customisation

    • Investing in buildings and land to extend production premises

Examiner Tips and Tricks

You may be asked to analyse the impact of IT and AI on a business. Their contribution to improving flexibility should be one of your key arguments – the case study may give you some ideas on how the business in question could apply them.

Process innovation

  • Process innovation involves identifying new ways to organise and carry out production processes

    • In recent years, organisations have made some notable improvements production processes that have improved productive efficiency

Examples of process innovation 

Amazon

IKEA

UK Passport and Borders Agency

  • Amazon provides detailed package tracking, allowing its online customers to provide details such as a safe place to leave deliveries, reducing the need to return undelivered items to warehouses

  • IKEA‘s EPOS system provides accurate stock availability information on its website, ensuring customers are not disappointed when they travel significant distances to purchase items

  • In the public sector, the decision by the UK Passport Agency and Borders Agency to introduce biometric passports has allowed fast-track lanes at airports to be introduced, reducing queue times for travellers