Operations management (or production)

Operations management (also referred to as production) is essentially about ensuring that goods and services meet the needs and wants (desires) of customers.

This section of the IB Business Management syllabus examines a range of topics such as production methods, quality management, business location and crisis management.

Most of Topic 5 applies to HL students only, although both SL and HL students need to be able to make connections to the six CUEGIS concepts: change, culture, ethics, globalization, innovation and strategy.

• Operations management and its relationship with other business functions (AO1)
• Operations management in organizations producing goods and/or services (AO2)
• Operations management strategies and practices for ecological, social (human resource) and economic sustainability (AO3)

• The following production methods: job / customized production, batch production, mass / flow / process production, and  cellular manufacturing (AO2)
• The most appropriate method of production for a given situation (AO3)

• The following features of lean production: less waste, greater efficiency (AO1) (HL Only)
• The following methods of lean production: continuous improvement (kaizen), just-in-time (JIT), kanban, and andon (AO2) (HL Only)
• Features of cradle to cradle design and manufacturing (AO2) (HL Only)
• Features of quality control and quality assurance (AO1) (HL Only)
• The following methods of managing quality: quality circle, benchmarking, total quality management (TQM) (AO2) (HL Only)
• The impact of lean production and TQM on an organization (AO3) (HL Only)
• The importance of national and international quality standards (AO2) (HL Only)

• The reasons for a specific location of production (AO2)
• The following ways of reorganizing production, both nationally and internationally: outsourcing / subcontracting, offshoring, and insourcing (AO3)

• The supply chain process (AO2) (HL Only)
• The difference between JIT and just-in-case (JIC) (AO2) (HL Only)
• Stock control charts based on the following: lead time, buffer stock, re-order level, re-order quantity (AO2 & AO4) (HL Only)
• Capacity utilization rate (AO2 & AO4) (HL Only)
• Productivity rate (AO2 & AO4) (HL Only)
• Cost to buy (CTB) (AO2 & AO4) (HL Only)
• Cost to make (CTM) (AO2 & AO4) (HL Only)

• The importance of research and development for a business (AO3) (HL Only)
• The importance of developing goods and services that address customers’ unmet needs (of which the customers may or may not be aware) (AO2) (HL Only)
• The following types of innovation: product, process, positioning, and paradigm (AO2) (HL Only)
• The difference between adaptive creativity (adapting something that exists) and innovative creativity (creating something new) (AO2) (HL Only)
• How pace of change in an industry, organizational culture and ethical considerations may influence research and development practices and strategies in an organization (AO3) (HL Only)

• The difference between crisis management and contingency planning (AO2) (HL Only)
• The following factors that affect effective crisis management: Transparency, Communication, Speed, and Control (AO2) (HL Only)
• The following advantages and disadvantages of contingency planning for a given organization or situation: Cost, Time,  Risks, and Safety (AO2) (HL Only)