Wednesday, 29 March 2017

Why learn about Operations Management?

There are very good reasons for wanting to learn about operations management, even if you’re not considering working in operations. It is because operations spans across all aspects of business, it affects everything. Operations are one of the two line functions in a business, the second being sales. All of the other functions, spanning from accounting to IT, supports both of the line functions. The following are the service jobs that are closely related to operations:
  • Marketing
  • Financial
  • Information

There are other reasons why it can be beneficial to learn about operations management that don’t have anything to do with careers or working in business. Operations and the supply chain management can be beneficial in learning about the world and understanding how things work. It teaches about global dependencies, gives an insight into the reasons why some organisations will fail and why some go on to be successful.  You can also learn about why it’s important to work with others through operations. By working together, employees are able to learn their own roles and the roles of other people within the organisation.
Here are some of the activities that finance and operations managers exchange their expertise and share information on:
  1. Budgeting
  2. Provision of funds
  3. Economic analysis of investment proposals

Tuesday, 28 March 2017

What is the scope of operations management?

Operations management spans across organisations. The people working in operations management can be involved in a variety of different positions, including:
  • Product and service design
  • Technology selection and management
  • Process selection
  • Facilities planning
  • Location planning
  • Work system planning
  • Quality improvement

There are many interrelated activities in operations function, which include the following:
  • Forecasting
  • Capacity planning
  • Quality assurance
  • Inventory management
  • Scheduling
  • Motivating staff

All companies will have operations but they will be different as they are dependent on the businesses themselves, but they will also have things in common. Regardless of the business, most organisations will have operations such as scheduling activities, ordering and managing supplies and motivation employees and so on. 

Monday, 27 March 2017

What is process variation and the four basic sources of variation?

All business process experience variation to some extent. The variation could be a result of random variability or perhaps as a deliberate choice in management. 

Variations can be disruptive to supply chain processes and operations as they interfere with functions.  They can cause a number of problems such as increased costs, unhappy customers and product shortages. Here are the four basic sources of process variation:
  1. A variety of services or goods being offered by the company. Variation will be greater if there is a wider amount of variety in the goods or services that are offered.
  2. Structural variation. Structural variation in demand is caused by trends and variations that occur with seasons. These types of variations can be predictable and they are vital for capacity planning.
  3. Random variation is naturally occurring and found in all processes and the demand for services and products. Managers have little influence over random variation.
  4. Assignable variation has many different causes, such as failing to follow the correct working methods and defective inputs. Analysis can be used to reduce or remove assignable variation along with corrective action.

Saturday, 25 March 2017

Chit Chat: Automotive Trends 2017

Cars are evolving into more technological machines that fit in with modern day life. Let’s look at some of the trends that are expected in the near future.

1.    Parking has always been an area that many drivers have problems with, especially learners and new drivers. Parking can even be difficult for the most seasoned drivers, especially when there is a large amount of traffic. Premium cars now have the ability to remove the struggle thanks to parking assistance features. Cats have cameras and sensors to assist the driver. This addition is about to be expanded upon. Mercedes and BMW are both about to launch new features that will give drivers the option of parking using their smartphones.
2.    Cars are being improved and designed in ways that will absorb impacts. Volvo is committed to reduce impacts related to deaths and they wish to stop anyone from dying in their vehicles by 2020.
3.    Hands-free driving on motorways is the aim of many car manufacturers.
4.    Smart headlights are heading our way. Audi is working to create headlights that avoid blinding oncoming drivers. Volvo is working on swivel headlights that turn to match the turn of the wheel to help drivers see more of the road ahead. LEDs are also on their way into the mass market.
5.    Hybrids to be designed to appeal to more drivers. BMW is set to release a drop top i8 that certainly hits the spot.

Friday, 24 March 2017

What is process management and the three categories of business process?

Process management is a central role of management. A process has one or more actions that are needed to change inputs into outputs. A business is made up of many interrelated processes but there are three categories of business processes in general. The three categories are:
  • Upper management processes
  • Operational processes
  • Supporting processes

Upper management processes, such as organisational strategy, govern the operations of the business as a whole. Operational processes are what make up the value stream and they are the core processes of the business. Examples of operational processes include marketing, sales and purchasing. Supporting processes are what support the core processes.  Accounting and HR are both examples of supporting processes.

Thursday, 23 March 2017

What is the production of goods versus delivery of services?

There are differences between the production of goods and delivery of services. The differences affect the management of these two. The end result of the production of goods is tangible. It could be a tennis ball, a bed sheet or a toothbrush. It’s something that we can touch and see. Farming produces goods that aren’t manufactured while other goods are made up in a factory. They are both goods whether they’re manufactured or not.

The delivery of services is essentially the provision of acts. These acts could be having someone come to mow your lawn or DJ at your event. There are many different service jobs that will fall into the following general categories:

  • Professional services
  • Mass services
  • Service shops
  • Government
  • Education
  • Retail and wholesale
  • Food services
  • In-house services
  • Residential services
  • Shipping and delivery
  • Transportation
  • Travel and hospitality
  • Miscellaneous services

Service and manufacturing often have differences in terms of what is performed but they will have similarities in how they are performed. They have a certain amount of customer contact, require some form of labour and have uniformity of inputs.  Other areas of comparison include a measure of productivity, inventory, are patentable, require the payment of wages and quality assurances are required.

Wednesday, 22 March 2017

What is operations management?

Operations management is basically the management of systems and the processes that are used to create goods and services provided by the business. The goods refer to any physical items that are made up from raw materials and parts or they may go into the final products such as vehicles. Services are activities that can provide location, value, form, and time. Goods are similar to the services that surround us at all times and can be found in what we use on a daily basis. Operation functions in business impact the national economy and play a part in competing with other nations.

A business must work towards meeting demand with supply in order to be cost efficient and satisfy customers’ wants. Operations and supply chain are essential functions of supply, while sales and marketing are the key functions of demand. Finance is concerned with budgeting and securing financial resources and providing enough funding for operations. Operations are responsible for providing services and producing goods that are provided by the business, it’s the core of the business.

Tuesday, 21 March 2017

What are the challenges for economists in logistics?

Textbooks will often begin with definitions of logistics and come up with new terms within the industry without giving practical benefits. The same textbooks will give heavy focus on the history of logistics and there will be many surveys on the trends of logistics. Economists contributed more to logistics in the past. 

These days, scientific economists are focusing on logistic controlling and logistics management. Many textbooks will give promises regarding cost reductions. However, companies need costing and pricing methods to make themselves become more feasible and not simply visions of the future. They need remuneration schemes and marketing and pricing strategies.

Economists need to develop strategies that can solve relevant problems in logistics. They also need to share advice for practical use. Some of the challenges are bottlenecks and demand saturation. Bottlenecks cause the economy to become stuck and logisticians, economists, and engineers need to find practical solutions. The aims are to create efficient supply chains that are effective regardless of bottlenecks and that meet the demand of consumers.

Monday, 20 March 2017

What are the contributions of economics to micrologistics?

Logistics and supply chain management are seen as new business approaches by some economists. They are equal to consumer orientation and part of all processes and networks.  It requires a holistic approach and built up collaborations to become an effective supply chain. However, for the sake of practical use, economists need to solve the problems below:

  • The standardisation of logistics accounting and costs
  • Standardised use dependent depreciation
  • Establishing the potentials and limitations of universality and diversification in logistics
  • Fixed costs
  • Standardisation for costings and pricings of the different logistic tasks and services
  • Fixed cost compensation solutions
  • Price lists and bill quantities for standard logistic performances
  • Production of standard tender documents for contract logistics
  • Continued development of logistic marketing
  • Inter-organisational supply chain management

The topics above are rarely discussed in company logistic text books and the focus on practical information, solutions, recommendations and rules are uncommon. It’s essential to apply use related cost rates and prices based to create an optimised supply chain and inventory.

Saturday, 18 March 2017

Chit Chat: Logistic Technology Trends 2017

Logistics and transportation continue to rapidly evolve. We’re facing an era of Internet. Logistics and transportation companies are using advanced technologies to provide reliable and faster deliveries for their customers. Let’s take a look at some of the future trends we’re excited about for the year ahead, and beyond.

The Internet of Things
The Internet of Things will continue to play an exciting role in modern day logistics. Expect IoT to play a more important role in reducing waste, saving money and increasing delivery speeds. There is talk of IoT working with RFID and AIDC too. This communication will help to spot areas of weakness that require work to meet the demands of the customer.

Bluetooth will be found more in logistics. Bluetooth can be used to improve the tracking of shipments and work to ensure accuracy in logistics. Expect to see Bluetooth devices being used throughout the logistics process.

Amazon is one company that is already working with robots alongside human workers in warehouses. Automation is becoming more reliable and cheaper and they provide companies with a way of reducing costs, improving accuracy and improving speed.

Electronic Logging
Electronic logging devices help logistic providers stay competitive. The devices log the driving hours and helps companies make and record accurate records.

Autonomous Vehicles
Self-driving vehicles are being tested and continue to be worked on my car makers. Driverless trucks will help to improve and streamline services. This may not appear this year, but work continues to be done and self-driving vehicles is an area worth keeping an eye on. 

Friday, 17 March 2017

What are the contributions of economics to macrologistics?

Economic contributions can be applied to macrologistics by investigating problems, including the following topics:

  • The effects logistics has on the national and international economy
  • Price structure effects on how resources are used
  • Fair price structures and principles in logistics
  • The quantification of logistic markets
  • Cross price subsidies and allowances
  • Economies of scale limits in logistics
  • Intercompany supply chain management limits and potentials
  • Private household purchasing strategies
  • Fixed cost consequences
  • The need for political action

Many of the macrologistic topics are solid disciplines, such as transport economy and waste management. There are lots of other areas that are still worth investigating as they provide many opportunities. These include: network economy, pricing and segmentation of markets.
Economists should be paying more attention to logistics and supply chain management as it’s a new approach to business. Company logistic problems that should be investigated by economists include:

  • Limitations of diversification and universality in logistics, and the potentials
  • Standardisation of accounting and costs in logistics
  • Allocation of fixed costs
  • Standardisation of costing and pricing based on the type of logistic services and tasks
  • Solutions for fixed cost compensation
  • The development of marketing in logistics
  • Direct and indirect revenues in logistics

Thursday, 16 March 2017

About economics and logistics

The main goal of the economy is to give society the goods and services that it needs at the lowest prices. For a company, the goal is to achieve the best possible profits for the lowest cost. When it comes to logistics, the main goal of the services and performances need to be provided at the lowest cost for the maximum profit.

Logistics economics are closely related to technology in logistics. Technology is used to simplify logistics and to improve the logistic performances. The objectives are to improve the quality and efficiency of the performance, streamline the administration processes and to help in the development of business strategies for pricing, costs and marketing.