Notesale: Turn your study into money

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How to use technology to improve operational efficiency
Technology
In the business world, the application of practical, mechanical, electrical and related sciences
to industry and commerce
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Welding

Robots can be programmed to join together materials
during the production process, in order to build up and
shape the final product
...
Other applications carried out by robots
include cutting, grinding and polishing
...
This has
become even more significant with improvements in
micro-technology, as this requires a high level of
accuracy in working with components that are too small
for the human eye to handle accurately
...

They are then placed on pallets and loaded on to
lorries or other forms of transportation, for
immediate delivery to the customer
...
This means that they are ideally
suited to checking the accuracy of sizes and quality of
products
...
In such cases,
specially constructed robots can be made to withstand
hazardous environments
...

Computer-aided manufacturing, known as CAM, uses computers to undertake activities such as
planning, operating and controlling production
...

Networks are constructed and manipulated on computer and ‘what if?’ analysis is applied to examine
the implications of any modifications to the network
...
Once the production line is up and running,
any variations to the planned schedule can also be monitored by computer and, if necessary, remedial
action taken to modify the approach used
...
In CAM, the use of robots and fully
automated production lines, controlled by computers, has increased productivity and reduced the
problems arising from human error
...
Flexible programming also allows a fully
automated line to produce different varieties of a product
...
Maintaining control of the process through computerbased quality assuramce systems can overcome the possibility of human error and also provides more
rigorous scrutiny of quality
...
This
is added by technology in the following ways:
•

Computer programs linked to statistics on patterns of consumer purchases allow firms to
anticipate changes in stock levels more accurately
...
Firms are now able to operate with
lower levels of stock and so reduce their costs
...


•

Retailers are able to link their tills to stock control through EPOS (Electronic Point of Scale)
systems
...
These systems
can also order new stock from suppliers automatically when a particular item has fallen to a
certain level (known as the reorder level)
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Communications
Another area of business in which technology has led to many changes is information technology (IT)
or information communication technology (ICT)
...
The way
marketing is undertaken has been changed because ICT can undertake routine activities far more
effectively and flexibly than people can
...

ICT assists communications in the following ways:
• External and Internal communications are improved
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•

Internal Information can be processed and amended more quickly
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•

Company intranets enable employees and, where necessary, suppliers and customers to access
company information at any time
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•

Technology increases the speed of communication and the scope for greater responsibility
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•

The growing use of loyalty cards allows firms to accumulate information on the buying habits
of their customers
...

Relationship marketing arises from this process, whereby marketing techniques are based on
the firm’s understanding of its individual consumers
...
It has led to the
creation of a whole new category of business (e-commerce companies) and brings a number of
specific advantages
...

▪ Operations can be moved to places where costs such as rent and wages are
considerably lower
...

▪ Organisations such as banks have closed many of their branches as people have
moved to internet banking
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▪ Eg
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Finally, data can be stored more cheaply and accessed at greater speed if an individual
needs to refer back to a previous communication
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For many products, 2D drawings can be transformed into 3D images
and rotated in order to demonstrate the whole range of possible
views
...
Wind tunnel simulations)
...

Creation of new
products

Traditional leisure pursuits, such as playing cards, have been hit by
computer-based alternatives, such as computer games
...

The ‘communication age’ has increased the demand for data and has
been instrumental in shifting the balance of employment in the UK
from manufacturing to services
...
At the same time, this shift has created more
jobs in administration and planning
...
It has also been a key factor in the
development of many businesses operating from home or small
premises
...
It
is encouraging teleworking (i
...
People working from home and other
locations and keeping in contact through ICT)
...

However, projections that the typical office will cease to exist are
probably unrealistic, as many teleworkers find that they miss the social
aspects of working alongside colleagues
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Benefits of using technology in operations
Reducing Costs
• The use of technology to replace manual systems in areas such as planning, office work,
manufacturing and stock holdings has greatly reduced labour costs
...

• ICT can be used in production planning in order to devise the most cost-effective way of
manufacturing a product
...
In the financial
services industry, for example, transactions are invariably conducted remotely by internet, by
telephone or through an ATM
...

Improving Quality
• Computer-based quality assurance systems can overcome the possibility of human error and
also provide more rigorous scrutiny of quality
...

• ICT enables business to understand customers’ requirements more fully
...

Reducing Waste
• Stock control systems ensure that orders are placed at the most appropriate time so that
excessive stock levels do not build up
...

• Intergrated systems of stock control can identify branches holding stock that is needed by
other branches
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• Arguably, the most significant waste reduction provided by technology is that of time
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Increasing Productivity
• Machines can work at a much faster and more consistent speed than a workforce without the
benefit of such technology
...

• Computerised systems allow organisations to keep much closer control over their stock levels,
reducing the need for time-consuming manual checks and therefore reducing wage bills
...
This enables the business
to use its resources most effectively and reduce costs
...
Production
lines can be adjusted to change the product being produced; salespeople, while in a face-to-face
meeting with a customer, can make immediate contact with the company’s headquarters to adjust
plans to suit that customer
...
The speed of processing data and the ability to access
information directly enable businesses to plan their budgets more rigorously
...
Perhaps the greatest benefit to the
budgeting process is in budgetary control
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This helps businesses to take prompt action to resolve any
problems
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Businesses will thus benefit by improving customer satisfaction levels
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Issues in introducing and updating technology
Resistance to change
People are often concerned by change
...
This can cause stress for existing workers, as they will fear for their future
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`
Lower Morale
ICT can undermine group morale by breaking up teams
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– Productivity may fall
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• Not only is it expensive to produce, but it also needs regular updating and servicing
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• For some businesses, the cost of technology can make them uncompetitive and so threaten
their survival
...
Staff will
also have to undergo frequent training, again adding too costs and threatening efficiency
...
However, ICT poses a threat to some businesses, because it reduces
some of the barriers to entry in certain industries
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