Unit 7 Business Operations in Engineering

-Learner name Assessor name Centre number
Eusabia Daisy Chikuni 10386
Date issued Deadline date Submitted on
08/01/2016 27/01/2016
Qualification Unit number, title, and code
BTEC L3 Extended Diploma Engineering Unit 7 Business Operations in Engineering  R/600/0257

Unit 7 Assignment 2 Brief

Assignment title 2 External factors and legislation which affect the operation of an engineering company
Unit objective

2 Understand how external factors and the economic environment conditions can affect the operation of an

engineering company

3 Know how legislation, regulation, and other constraints impact on the operation of engineering


In this assignment you will need to:

a.    Identify a UK-based engineering company and investigate how profitability is affected by external factors over which it may not have control.

b.    Carry out further research to determine what effect changes in the economic environment may have on the operation of the company.

c.    Identify the statutory legislation and regulations which govern the way that the company operates and explain how it complies with them.

d.    Describe the environmental and social issues which impact upon the operation of the business.

Purpose of this Business assignment

You will appreciate that engineering businesses in the UK have to compete against the rest of the world and that sometimes their operations are affected by things over which they have no control. For example, sudden changes in energy and raw materials prices caused by economic uncertainty in other countries will have a knock-on effect if a product has been promised to a customer at an agreed price and there will need to be a strategy to take account of this eventuality. You will also appreciate that businesses have to operate according to a set of rules designed to protect their workforce, their customers, and the environment.


The main focus of this assignment is to carry out research based on an actual engineering company in order to find out how it operates in an ever-changing economic and legislative climate. You have a number of options when deciding which company to base your research on. Try to follow the current news about the economic climate on a company to get the best information to support your answer.

Criteria reference Grading criteria covered in this assignment Task no. Evidence Date
P4 explain the external factors and economic environment that affect the way in which an engineering company operates
P5 identify the legislation and regulations that impact on the way an information engineering business operates
P6 describe the environmental and social constraints that impact on the way an

engineering business operates

M2 discuss the impact of legislation on a specific operation within a typical

engineering company in terms of benefits and limitations

D2 evaluate the importance and possible effect of the external factors that directly impact on an engineering company
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Task 1 [P4]

Unit 7 Business Operations In Engineering

(a) The UK manufacturing company supplies most of its product to the USA and has negotiated regular deliveries over a 15-year span. The contract was signed ten years ago. The product was priced in sterling (UK £) with an agreed uplift each year equivalent to the average of the USA and UK inflation rates. At the time, the exchange rate was $1.66 (US) to £1 (UK). The American company has asked for a price review. Explain why the US customer might want this review and consider what effect it might have on the profitability of the UK business environment .

(b)Currently, the Chinese economy is booming. Chinese manufacturing industries are able to produce goods much more cheaply than companies in the West. The Chinese economy is unique in that it has a positive balance of payments and is able to build up large reserves. To take advantage of the lower cost base, many UK companies have relocated their manufacturing facilities to China while maintaining design and support services in the UK and EU.

(i)Explain how the Chinese are able to produce manufactured parts more cheaply than in the West while still maintaining quality.

(ii)What external and economic factors might derail the Chinese success in manufacturing?

(c)On the BBC News website, there is an article about current events between Saud Arabia and Iran. Imagine your company is based in either of the two countries. What effect will this have on your business? Use 3 examples of external factors that will affect your company. 

Task 2 [P5& P6]

On the BBC News website on 29 May 2007, there was a short report about Nanjing Automobile Corporation (NAC) reopening the MG sports car factory at Longbridge, Birmingham. The article presented the reasons for this initiative and included a number of statements from the chief executive at NAC. You can find this report at http://news.bbc.co.uk/1/hi/business/6700219.stm

To set this report in context, it might be worthwhile to look at earlier reports by the BBC and other organisations when the MG Rover Company ceased trading in 2005.

As a newly employed Health and safety manager for MG Rover, it has come to your attention that a technician operating a newly installed CNC machine has had an accident and both his hands have to be severed. The technician did not have the chance to even complete setting up the machine as it started without warning. A worker working next to him was able to switch the power off and he is the one who notified the floor supervisor.

  1. Using examples, describe the environmental and social constraints that could affect the setting up of the new MG rover in Longbridge.
  2. What legislation and regulations will affect the company based on the accident that has happened to their worker? 


You work for a company which carries out a range of electroplating processes on its products. These products are made mainly from mild steel components which are stamped, formed and welded together. The factory has two injection moulding machines for producing small items such as covers, handles, and trim pieces. The plating department employs 50 operators and there are baths for plating gold, silver and chromium.The factory is long established on what was once a Greenfield site. It is now ringed by housing estates with a single access road to the factory. To remain competitive the management would like to move from a two 8-hour shift system to a three 8-hour shift seven-day-a-week operation. The total number of people on site at any one time would be about 160. Car parking is restricted and lorries movements number about four per day with two of these being large articulated vehicles. Fuel oil is delivered by tanker and there are specialist chemical deliveries once a month by a secure lorry.

People living nearby have specific concerns about two operations carried out at the factory:Stamping, which is a noisy process and Plating, which uses cyanide and is therefore perceived as a deadly process by some residents.The company has decided to make a presentation to the local residents association explaining how it complies with legislation and demonstrating its good ‘green credentials’, particularly in respect of discharging waste water from the onsite treatment plant into a nearby culvert which runs down to a river. Your manager has asked you to put together the presentation which will explain the legislation appertaining to the two operations and the benefits to the company of complying with the law.

For this task, you must prepare a presentation in a PowerPoint form that you and your manager will use at the next resident meeting.  

TASK 4 [D2]

Below are examples of external factors that can have an impact on a business. Using current examples of named companies, explain how the factors have impacted on your named

  1. Exchange rates
  2. Conflict between countries increases or is resolved
  3. Climate change and carbon footprint issues increase
  4. Raw material prices change
  5. the impact of outsourcing
  6. demographic and social trends

It is important that you write your references for all the tasks.

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