Inputs

Inputs are the resources used in the transformation (production) process.

• Labour

• Energy

• Raw materials

• Machinery and technology (capital equipment)

Activity

1. Describe the raw materials that Coca-Cola/Apple uses in its production process

2. Explain how inputs can influence the production process

Materials - are the basic elements used in the production process and consist of two types: 

1. Raw materials are the essential substances in their unprocessed state. e.g. water, sugar, the elements to make the syrup concentrate

2. Intermediate goods are goods manufactured and used in further manufacturing or processing. e.g. the syrup concentrate, a gearbox for a car, a battery for a phone, a computer chip 

Information

Information - the knowledge gained from research, investigation and instruction, which results in an increase in understanding.

External Information - This is information that comes from outside the business (not researched by the business itself). External information is an excellent and generally independent source for operations managers to use. It is very useful to integrate relevant information into operations processes.

• Market reports

• Industry bodies, 

• Official government statistics from the ABS

• Media reports

• Academic papers and commentary

• Management journals 

• Comparative studies

Example

Information on the use of distribution centres will act as an input for inventory management. Similarly, information on new technologies can influence which machinery and technology is purchased and how it is applied to the operations function.

Internal information

Internal information comes from within the business and is gathered from internal sources such as:

• Financial reports

• Quality reports

• Internal key performance indicators (KPIs) such as lead times, inventory turnover rates and production data.

• Customer feedback - can come through an analysis of warranty data or from scanning social media threads. 

Key performance indicators (KPIs) are specific criteria used to measure the efficiency and effectiveness of the business’s performance.

Internal information acts as a transformed resource when it informs processes and creates process improvements.

Customers

Customers become transformed resources when their choices shape inputs.  A consumer orientation takes the preferences and interests of consumers as the starting point to production processes. In this way, the customer acts as an input and their desires and preferences act as a transformed resource. e.g. people wanting tablets so Apple produced them https://www.myaccountingcourse.com/accounting-dictionary/customer-orientation  service businesses customers play. 

Customer relationship management (CRM) refers to the systems that businesses use to maintain customer contact. e.g. Salesforce

Transforming resources which are those inputs that carry out the transformation process. They enable the change and value adding to occur. There are two main transforming resources, although energy and information may also be classified under this category. 

The 2 main transforming resources are: HR and Facilities

Human Resources

Employees are said to be the single most important input into business. Staff who are well qualified, hard working and disciplined can bring great productivity and efficiency to business operations. The effectiveness with which human resources carry out their work duties and responsibilities can determine the success with which transformation and value adding occurs. This is because it is employees who coordinate and combine other resources such as machinery and technology, raw materials, and finance to produce goods and services. 

Setting performance objectives for individual staff members to improve their efficiency will help the business achieve its objectives. Other strategies that will assist the achievement of business objectives include adhering to work health and safety standards and ensuring staff motivation remains high. Well-designed human resource management policies and practices can improve the performance of the operations processes. Well-considered job design, targeted and appropriate training, flexible work practices and open communication are all factors that assist in maximising operational efficiency, business performance and the capacity of the business to achieve the objectives

Facilities

Once a business has determined the type of operations process to use, it will need to undertake a complex set of design-planning decisions involving the production facilities. 

Facilities refer to the plant (factory or office) and machinery used in the operations processes. Major decisions include the design layout of the facilities, the number of facilities to be used, their location and their capacity. In particular, the business needs to decide:

•  whether the required facilities should be located in one or two large sites or divided among numerous smaller sites

•  what impact zoning and other restrictions will have upon the facilities’ size and location

•  special conditions, such as energy and water requirements

•  the most efficient plant design

•the optimum plant and process layout — the arrangement of machinery, equipment and people within the facility.

The plant and machinery can make a very significant difference to a business and its capacity to transform. Clearly the facilities can determine the nature of the operations environment. Modern facilities, which integrate modern technologies, are well lit, well designed and labour friendly, will be highly conducive to productive operations.

2012

Q4 Which of the following is the correct sequence for an operations process?

(A) Facilities – controls – waste

(B) Materials – design – product

(C) Information – services – improvement

(D) Human resources – planning – customers

2015

Q5 Which of the following includes two examples of transforming resources?

(A) Facilities and customers

(B) Materials and customers

(C) Facilities and human resources

(D) Materials and human resources