N5 Entrepreneurship 3. Using operation systems 3.1 Operations management control


Most businesses have limited capacities and resources, which they would like to use optimally to maximise their profit.


1. Scheduling


The challenge to the small businessperson is to schedule operations in such a way as to make maximum use of these activities. This means that a plan or procedure for work to be done must be decided on and time and resources allocated to it. This is necessary in order to meet the demand for your product or service. Furthermore, scheduling influences your capacity planning.


The challenge is to reconcile demand for your product or service with your capacity (ability to supply the very same products or service). If a balance between the two is not achieved then you will either sit with too much stock (available services) or create customer dissatisfaction due to your inability to deliver. Therefore scheduling forms the nucleus of your plan to meet customer demand. The following factors form part of the scheduling process:


Demand Supply


Demand forecasting Forecasting the demand for your product is not an easy process. Various techniques can be used to assist you, but you will never know for certain how many of your products you can sell. These forecast techniques were discussed in a previous module. However, the information is needed to determine production quantities (number to be made or ordered) or service levels. Factors like seasonal trends and surges in sales due to promotions must be included in your forecasting as well.


2. Inventory planning


Once the demand for certain products and surfaces is agreed upon, planning inventory levels becomes more straightforward. The following aspects are then central to operations: • ordering the right parts or materials • ordering the right quantity each time • ordering at the right time.


3. Quality control


Quality control must be predetermined and therefore forms part of scheduling. The reason for this is that quality control can only be done at certain stages of the production process. This is even more relevant for a service business since production and consumption take place at the same time. Unplanned interruptions may create customer discomfort although, if there is a problem with the service, time for rectifying is limited.


4. Maintenance


Maintenance is crucial to the production of quality goods and services. Maintenance involves the correction or prevention of faults or breakdowns due to factors such as: • human error • service dates • technical failures • over utilisation.


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