Lesson 1, Topic 1
In Progress

1.1. The Business Process

ryanrori December 30, 2020

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All businesses start by

  • Taking something from the environment, usually raw materials,
  • The raw materials are processed – the business does something to it
  • The product is then passed on or sold to someone,
  • The business then gets some reward for whatever it is that they do – payment.

This is called the business process. 

The business process consists of

  • Inputs: in the case of baking a cake: flour, sugar, butter, milk, etc.
  • Processing: mixing the ingredients and baking the cake in the oven.
  • Outputs: finished cake, either to be eaten by family or sold to a store.
  • Feedback: from the family about the taste of the cake or payment from the store.

Inputs

Inputs are what is needed to do the work. 

Inputs are the raw materials you use to make something else.  For example, if you want to bake a cake you will need flour, eggs, milk, as well as the effort and skill of someone willing to bake a cake.  If you want to build a house you need sand, cement, bricks, and someone willing to build the house.  If you want to start a business you need money, raw materials, tools, machinery, equipment, a place to work, transport, and employees. 

In manufacturing, inputs are raw materials that you start with to make something else.  For example, if you want to bake a cake you need flour, eggs, milk, effort and skill of a person baking the cake, and so on.  If you want to build a house you need sand, cement, bricks, and so on. 

When you are processing information, the gathering and capturing of raw data would be inputs.  If you are working on the payroll, inputs would be salary and wage levels, employee details, overtime hours worked, bonuses that have to be paid, etc

Processes

The business processes bring all the inputs together in such a way that the desired product is produced: a perfectly baked cake, a house that does not fall down or does not have a leaking roof. 

All the steps, processes, procedures and modifications to the raw materials to produce the products and services of the business are included in the processes.  Drawing the building plans, mixing the mortar, laying the bricks, painting the inside and outside of the house, installing windows and doors, putting up a roof, installing cupboards and carpets or tiles – every process that contributes towards the final product is included.

Very often businesses have unique processes that make their products special, such as Nando’s and KFC who have special ingredients but also special ways of preparing chicken.

Outputs

The result of what is done in the process/production phase is called an output. 

The finished product, the finished house and the finished cake are all outputs. Outputs can be divided into tangible and intangible outputs:

  • Tangible outputs are products that you can see and touch, like a box of matches, the finished cake, the finished house, the cooked chicken from KFC or Nando’s.
  • Intangible outputs are services such as in hospitals, training, telecommunications.

Feedback

No process is complete without feedback.  After a business has sold a product or provided a service, it must get feedback. 

Examples of feedback include whether the customers buy the product/service or not, are they prepared to buy the product at the price the business sells it, sales volume, financial figures, staff turnover.