, In this unit, you will explore how key business activities and trade
AJJeff""-'vi1- considerations influence engineering organisations and are used to
lkis u11-it will be- create a competitive advantage. You will learn why organisations need
~sse-sse-d by ~ se-rie-s of
to control costs and how they make decisions by applying activity-based
costing methods. You will also examine what is meant by quality and
~ssij11-wte-11-ts se-t by your
why it means different things to different people. You will investigate
tu.tor. quality systems, including quality assurance and control. Finally,
you will explore value management as a process to create value in an
organisation.
How you will be assessed
This unit will be assessed by a series of internally assessed tasks set by your tutor.
Throughout this unit you will find assessment practice activities to help you work
towards your assessment. Completing these activities will not mean that you
have achieved a particular grade, but you will have carried out useful research or
preparation that will be relevant when it comes to your final assignment.
In order for you to complete the tasks in your assignment, it is important to check
that you have met all of the assessment criteria. You can do this as you work your way
through the assignment.
If you are hoping to gain a Merit or Distinction, you should also make sure that you
present the information in your assignment in the style that is required by the relevant
assessment criteria. For example, Merit criteria require you to analyse and to produce
a model or complete an exercise accurately, while Distinction criteria require you to
evaluate.
The assignments set by your teacher/tutor will consist of a number of tasks designed
to meet the criteria in the table. They are likely to take the form of written reports but
may also include activities such as the following:
~ Investigation of local businesses, which could include visits.
~ Research and problem-solving projects.
~ Analysing case studies, observations or examples from real-world settings.
70 Applied Commercial and Quality Principles in Engineering
, Getting to know your unit UNIT 4
:t>-
Assessment criteria "'O
~
(I)
CL
This table shows what you must do in order to achieve a Pass, Merit or Distinction grade, and where n
0
you can find activities to help you. 3
3(I)
Pass Merit Distinction .....
m
('"\
p;·
.,,,
Leaming aim Examine business functions and trade considerations that help SlJ
::I
engineering organisations thrive CL
.()
141.11 c
SlJ
.,.
;:::;:
Explain how key business activities Analyse how key busi ness activities Evaluate, using language that is -<
"'O
influence an engineering o rga nisation. and trade considerations infl uence an technically correct and of a high ::::! .
engineering organisation, w hich can standard, how key business activities ::I
Assessment practice 4.1 Q.
create a competitive advantage. and trade considerations combine to "'O
Assessment practice 4.1 influence an engineering organisation, .,..
(I)
Explain how trade considerations which can create a competitive ::I
m
influence an engineering organisation. advantage. ::I
Cl.9.
Leaming aim m
Assessment practice 4.1
Explore activity- based cost ing as a method to control costs and
to determine if an engineering product or service is profitable
Assessment practice 4.1 ::I
(I)
(I)
::::! .
::I
cro
l :!iJI
Explain why an engineering organisation Produce accurately an activity-based Produce an accurate and refined
controls costs. cost model for an engineering product activity-based costing model, during
Assessment practice 4.2 or service, explaining the reasons for cost the process, for a product or service
controls. to determine the major cost areas that
Assessment practice 4.2 could impact on profitability, explaining
the reasons for cost controls.
Assessment practice 4.2
Produce an activity-based cost model for
an engineering product or service.
m
.,.
Assessment practice 4.2
Learning aim Explore how engineering organisations use quality systems and
value management to create value
Explain the purpose of different quality Analyse the purpose of different
•••••
Evaluate the outcome of a value
management systems and value quality management systems and value management exercise for a given
management used by engineering management used by engineering engineering activity and make
organisations. organisations. recommendations which include the
Assessment practice 4.3 Assessment practice 4.3 use of quality systems to implement
efficiencies in the engineering activity.
u4w Assessment practice 4.3
Complete a value analysis exercise on a Complete accurately a value analysis
given engineering process. exercise on a given engineering process.
Assessment practice 4.3 Assessment practice 4.3
17
, Getting started
Work in groups to consider the design and manufacture of one of your mobile
phones. Which company manufactured the product? What manufacturing
processes do you think have been involved? What departments could there
be in an organisation that manufactures a mobile phone? What are the costs
of producing a mobile phone? Make notes. When you have completed this
unit, think about how your knowledge and understanding of the topic has
increased. Identify what new information you can add to your notes.
l!I Examine business functions and trade considerations
Iii that help engineering organisations thrive
In this section you will learn to identify how key Here are some functions of which you need to be aware,
business activities and trade considerations influence an and the aspects of work that they cover.
engineering organisation and can be used to create a ~ Human resources (HR) - staff issues within the
competitive advantage. organisation.
~ Finance - financial dealings and costing within the
A1 Business functions organisation.
Engineering organisations range from small, local ~ Sales - marketing and selling the end product to
businesses that manufacture a product for a specific customers, including advertising and promotion.
market to large-scale global businesses such as
~ Operations - activities involved in manufacturing the
BP. Whatever the size of the business, it will have a
product.
management team that manages a range of functions.
~ Research and development (R&D) - market research
Table 4.1 shows examples of key activities that take place
and product investigation to develop the products for
within different business functions.
manufacture; reviewing customer satisfaction.
Key term ) ~ Purchasing - tasks such as sourcing and buying raw
r
materials for manufacture.
Functions - areas of activity into which a business can
be organised.
~ Table 4.1 Key activities within different business functions
l
Functions Examples of activities
Manufacturing • Forming
of products • Fabrication
and delivery of • Removal of material
seivices • Addition of material
I •
•
Assembly processes
Quality checks and inspection/testing processes
Supply chain • Outsourcing decisions - where the organisation considers the use of an external company for a specific job
management • Supplier appraisal - where the organisation evaluates the use of current and alternative suppliers (e.g. of raw
materials)
Marketing and • Brand awareness - how the organisation wants the brand to be perceived by customers
sales • Market research - investigating the market the product is aimed at to aid development
• Sales
• Customer feedback - acquiring data on customer satisfaction and responding to customer comments
Customer • Meeting expectations - organisations that are successful make every attempt to ensure that their customers are
relations satisfied
• Being proactive - for example, taking the initiative to ask customers for feedback or anticipating common
customer concerns
72 Applied Commercial and Quality Principles in Engineering
AJJeff""-'vi1- considerations influence engineering organisations and are used to
lkis u11-it will be- create a competitive advantage. You will learn why organisations need
~sse-sse-d by ~ se-rie-s of
to control costs and how they make decisions by applying activity-based
costing methods. You will also examine what is meant by quality and
~ssij11-wte-11-ts se-t by your
why it means different things to different people. You will investigate
tu.tor. quality systems, including quality assurance and control. Finally,
you will explore value management as a process to create value in an
organisation.
How you will be assessed
This unit will be assessed by a series of internally assessed tasks set by your tutor.
Throughout this unit you will find assessment practice activities to help you work
towards your assessment. Completing these activities will not mean that you
have achieved a particular grade, but you will have carried out useful research or
preparation that will be relevant when it comes to your final assignment.
In order for you to complete the tasks in your assignment, it is important to check
that you have met all of the assessment criteria. You can do this as you work your way
through the assignment.
If you are hoping to gain a Merit or Distinction, you should also make sure that you
present the information in your assignment in the style that is required by the relevant
assessment criteria. For example, Merit criteria require you to analyse and to produce
a model or complete an exercise accurately, while Distinction criteria require you to
evaluate.
The assignments set by your teacher/tutor will consist of a number of tasks designed
to meet the criteria in the table. They are likely to take the form of written reports but
may also include activities such as the following:
~ Investigation of local businesses, which could include visits.
~ Research and problem-solving projects.
~ Analysing case studies, observations or examples from real-world settings.
70 Applied Commercial and Quality Principles in Engineering
, Getting to know your unit UNIT 4
:t>-
Assessment criteria "'O
~
(I)
CL
This table shows what you must do in order to achieve a Pass, Merit or Distinction grade, and where n
0
you can find activities to help you. 3
3(I)
Pass Merit Distinction .....
m
('"\
p;·
.,,,
Leaming aim Examine business functions and trade considerations that help SlJ
::I
engineering organisations thrive CL
.()
141.11 c
SlJ
.,.
;:::;:
Explain how key business activities Analyse how key busi ness activities Evaluate, using language that is -<
"'O
influence an engineering o rga nisation. and trade considerations infl uence an technically correct and of a high ::::! .
engineering organisation, w hich can standard, how key business activities ::I
Assessment practice 4.1 Q.
create a competitive advantage. and trade considerations combine to "'O
Assessment practice 4.1 influence an engineering organisation, .,..
(I)
Explain how trade considerations which can create a competitive ::I
m
influence an engineering organisation. advantage. ::I
Cl.9.
Leaming aim m
Assessment practice 4.1
Explore activity- based cost ing as a method to control costs and
to determine if an engineering product or service is profitable
Assessment practice 4.1 ::I
(I)
(I)
::::! .
::I
cro
l :!iJI
Explain why an engineering organisation Produce accurately an activity-based Produce an accurate and refined
controls costs. cost model for an engineering product activity-based costing model, during
Assessment practice 4.2 or service, explaining the reasons for cost the process, for a product or service
controls. to determine the major cost areas that
Assessment practice 4.2 could impact on profitability, explaining
the reasons for cost controls.
Assessment practice 4.2
Produce an activity-based cost model for
an engineering product or service.
m
.,.
Assessment practice 4.2
Learning aim Explore how engineering organisations use quality systems and
value management to create value
Explain the purpose of different quality Analyse the purpose of different
•••••
Evaluate the outcome of a value
management systems and value quality management systems and value management exercise for a given
management used by engineering management used by engineering engineering activity and make
organisations. organisations. recommendations which include the
Assessment practice 4.3 Assessment practice 4.3 use of quality systems to implement
efficiencies in the engineering activity.
u4w Assessment practice 4.3
Complete a value analysis exercise on a Complete accurately a value analysis
given engineering process. exercise on a given engineering process.
Assessment practice 4.3 Assessment practice 4.3
17
, Getting started
Work in groups to consider the design and manufacture of one of your mobile
phones. Which company manufactured the product? What manufacturing
processes do you think have been involved? What departments could there
be in an organisation that manufactures a mobile phone? What are the costs
of producing a mobile phone? Make notes. When you have completed this
unit, think about how your knowledge and understanding of the topic has
increased. Identify what new information you can add to your notes.
l!I Examine business functions and trade considerations
Iii that help engineering organisations thrive
In this section you will learn to identify how key Here are some functions of which you need to be aware,
business activities and trade considerations influence an and the aspects of work that they cover.
engineering organisation and can be used to create a ~ Human resources (HR) - staff issues within the
competitive advantage. organisation.
~ Finance - financial dealings and costing within the
A1 Business functions organisation.
Engineering organisations range from small, local ~ Sales - marketing and selling the end product to
businesses that manufacture a product for a specific customers, including advertising and promotion.
market to large-scale global businesses such as
~ Operations - activities involved in manufacturing the
BP. Whatever the size of the business, it will have a
product.
management team that manages a range of functions.
~ Research and development (R&D) - market research
Table 4.1 shows examples of key activities that take place
and product investigation to develop the products for
within different business functions.
manufacture; reviewing customer satisfaction.
Key term ) ~ Purchasing - tasks such as sourcing and buying raw
r
materials for manufacture.
Functions - areas of activity into which a business can
be organised.
~ Table 4.1 Key activities within different business functions
l
Functions Examples of activities
Manufacturing • Forming
of products • Fabrication
and delivery of • Removal of material
seivices • Addition of material
I •
•
Assembly processes
Quality checks and inspection/testing processes
Supply chain • Outsourcing decisions - where the organisation considers the use of an external company for a specific job
management • Supplier appraisal - where the organisation evaluates the use of current and alternative suppliers (e.g. of raw
materials)
Marketing and • Brand awareness - how the organisation wants the brand to be perceived by customers
sales • Market research - investigating the market the product is aimed at to aid development
• Sales
• Customer feedback - acquiring data on customer satisfaction and responding to customer comments
Customer • Meeting expectations - organisations that are successful make every attempt to ensure that their customers are
relations satisfied
• Being proactive - for example, taking the initiative to ask customers for feedback or anticipating common
customer concerns
72 Applied Commercial and Quality Principles in Engineering
