Business Operations

This section explains Business Operations and covers the following topics: the purpose of business operations, production processes, the impact of production processes on productivity and the impact of technology on production.

The Purpose of Business Operations

Business operations involve the day-to-day activities required to produce goods and services. The primary purpose of business operations is to:

• Produce goods and services efficiently to meet customer demands.
• Add value by transforming raw materials into finished products or delivering services.
• Ensure quality to satisfy customer expectations and build a good reputation.
• Control costs to maximise profits.
• Improve productivity to stay competitive in the market.

Production Processes

Businesses use different methods of production based on the nature of their products and the needs of their customers. The main production processes are:

Job Production

Definition: A method where products are made individually, and each item is tailored to the specific requirements of the customer.

Examples: Custom furniture, handmade jewellery, bespoke suits.

Advantages:

• High quality due to attention to detail.
• Customisation to meet specific customer needs.
• Employee skills are developed, increasing job satisfaction.

Disadvantages:

• Expensive due to higher labour costs.
• Time-consuming as each product is unique.
• Difficult to achieve economies of scale.

Batch Production

Definition: A method where groups (batches) of similar products are made together. One batch is completed before moving on to the next.

Examples: Bakery goods, clothing items, furniture.

Advantages:

• More efficient than job production as items are produced in bulk.
• Flexibility to produce different batches.
• Lower unit costs compared to job production.

Disadvantages:

• Time is wasted switching between batches (e.g., cleaning machinery).
• Less personalised products compared to job production.
• Storage costs for unsold items can increase.

Flow Production

Definition: A continuous process where identical products are produced on an assembly line.

Examples: Cars, bottled drinks, smartphones.

Advantages:

• Highly efficient with large volumes produced quickly.
• Low unit costs due to economies of scale.
• Consistent quality due to automation.

Disadvantages:

• High initial investment in machinery.
• Inflexible – hard to adapt the process for customisation.
• Boring, repetitive work for employees, which can reduce motivation.

Impact of Production Processes on Productivity

Job Production: Low productivity due to the time and effort needed for customisation. However, skilled workers can improve efficiency.

Batch Production: Moderately high productivity, as producing in groups reduces time and costs compared to making single items.

Flow Production: Extremely high productivity, as automation and assembly lines maximise output.

Productivity is influenced by:

• The level of skill and training of workers.
• The organisation of production.
• Investment in machinery and technology.
• The Impact of Technology on Production

Technology has revolutionised production processes in the following ways:

Automation and Robotics: Machines carry out repetitive tasks, increasing speed and accuracy.

Benefits: Reduces human error, lowers long-term costs, and allows for 24/7 production.

Drawbacks: High initial investment and potential job losses.

Computer-Aided Design (CAD) and Computer-Aided Manufacturing (CAM):

CAD allows for precise designs to be created digitally.

CAM uses computer systems to control machinery, ensuring consistent production.

Just-in-Time (JIT) Systems: Reduce waste by ensuring materials are delivered exactly when needed. This improves efficiency and lowers storage costs.

3D Printing: Enables quick prototyping and the production of small-scale custom items.

Generative Artificial Intelligence (AI): Enables content generation, including text and images.

Overall, technology enhances productivity, reduces costs, and improves quality. However, businesses must balance the cost of investment with the benefits gained.

These notes provide a comprehensive understanding of business operations and production processes.