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1. influences in operations Flashcards

1
Q

what are influences?

A

Influences on business operations are the internal and external factors that affect how a business produces and delivers its goods or services.

  • influences can aid or impede a business being able to achieve goals/objectives
  • business must respond to maintain competitive advantage and market share
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2
Q

list all the influences on operations

A
  1. Globalisation.
  2. Technology.
  3. Quality expectations.
  4. Cost-based competition.
  5. Government.
  6. Legal regulations.
  7. Environmental sustainability.
  8. CSR.
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3
Q

define globalisation and its characteristics

A

Globalisation - refers to the removal of barriers of trade between nations
Characterised by:
1. increasing integration between national economies
2. High degree of transfer of capital, labour, intellectual capital and ideas, financial resources and technology

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4
Q

what does globalisation do for businesses and consumers?

A
  • provides consumers with access to wider variety of products
  • provides source of market opportunities for businesses
  • potential threat to businesses as businesses that apply cost leadership pricniples can undercut the market and dominate
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5
Q

how does globalisation affect operations?

A
  • meet needs of global consusmers
  • global production facilities
  • more cost effective due to increased competition and need to cut costs
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6
Q

what are features of global businesses that seek to target global markets?

A
  • Product design - meet the needs of global consumers
  • Choice of location for manufacturing facilities
  • Management of quality
  • Logistics
  • Inventory management processes
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7
Q

how does globalisation affect goods based businesses in operations function?

A
  • Using manufacturing plants for the production of goods enables business to achieve economies of scale advantages
  • standardising products and processes to achieve consistency in quality
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8
Q

how does globalisation affect service based businesses in operations function?

A
  • Different parts of world have differen skils/qualifications or chepaer access
    Call centres
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9
Q

apple example of globalisation influence on operations

A
  • electronic goods designed in the United States of America, but manufactured in China and then sold globally.
  • Enables them to access experts in the field at affordable prices
  • enabling them to decrease expenses and maximise profits whilst still maintaining quality
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10
Q

mcdonalds example of globalisation influence on operations

A
  • Senior management prioritised “One McDonalds Way” - a system to standardise common processes across the world.
  • With better communication capability as result of globalisation management are looking to implement a standardised financial system across the globe. (“One McDonalds Way)
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11
Q

What is technology?

A

Technology is the design, construction and/or application of innovative devices, methods and machinery upon operations processes.

Enable people to communicate more easily and facilitate improved business processes

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12
Q

what are challenges with technology?

A

Outdated
Costly
Can malfunction and cause major expenses

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13
Q

what features of operational performance can technology improve

A

Quality
Speed
Dependability
Flexibility
Customisation
Cost

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14
Q

influence of technology on operations processes.

A

Enables them to achieve cost leadership and differentiate their products.

Technology applied and integrated with range of processes that characterise the operations function in business.

Administrative level: assist with organisation, planning, decision making and control of operations processes.

Processing level: technology is used in manufacturing, logistics and distribution, quality management, inventory management, supply chain management and sourcing

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15
Q

tesla example of technology influence on operations

A
  • Humans work with robots to manufacturs their cars
  • Giant japanese robots move vehicles around with ease and precision
  • Provides higher quality goods and decrease costs by limiting potential for human error = profit maximisation (cost leadership and profit maximisation)
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16
Q

what is quality and quality expectations?

A
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17
Q

breifly, how do quality expectations influence the operations process/management

A

expectations determine how products designed, created and delivered.

operations processes must follow standards.

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18
Q

what is the price quality interaction?

A
  • Consumers expect a higher priced product to be higher quality.
  • price should reflect the quality

allocate an appropriate price depending on the product.

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19
Q

how do quality expectations impact the input portion of operations process?

A

Higher quality materials, processes and resources put into the transformation processes to result in a high quality product.

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20
Q

how do quality expectations impact the output portion of operations process?

A

Post sale service with the product (warranty - demonstrates confidence in quality)

buying experience +customer service (luxury items)

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21
Q

what are quality expectations with goods?

A
  1. quality of deisgn (concept, innovative, materials)
  2. fitness for purpose (functional, easy)
  3. durability (reliable, maintainence)
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22
Q

what are quality expectations with services?

A
  1. professionalism of service provided (clean, courtesy, professional)
  2. reliability of service provided (efficiency, competency, qualification)
  3. level of customisation (unique needs)
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23
Q

how is tiffany and co an example of quality expectations influence on operations?

A
  • known for high quality products and service
  • source high quality diamonds (partnerships)
  • replace, repair, refund at no cost (if quality not to standard)
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24
Q

what is cost based competition?

A

derived from determining break-even point and then applying strategic advanatges over competitors.

Recognises opportunity to increase price is limites hence must reduce costs to maximise profits.

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25
what are strategies to reduce costs in the operations function?
1. Achieve economies of scale 2. Bulk buy inputs 3. Eliminate waste 4. Product standardised products for larger markets 5. Product high volume output 6. Use automated production systems
26
why is cost efficiency important in operations process due to cost based competition and how can businesses achieve it?
- Acquring cost efficient inputs - Maximise outputs and minimising costs of inputs. the more cost efficient a business is the better competitive advantage they will have improving productivity enables cost efficiency: - stable production processes - limited interruption - resources are used to optimum advantage - looking for opportunities to streamline production - updating facilities - more efficient technology - providing training and development to improve the skills of employees.
27
what is the relationship between cost based competition influence and cost leadership?
cost leadership addresses the influence of cost based competition by strategically achieving ways of being the more price compeititive in market.
28
how are targt/kmart/big w examples of businesses influencing cost based competition?
* can provide low prices due to inventory from low cost overseas countries * High turnover in each business allows for economies of scale, reducing supply chain costs.
29
what are government policies?
Government policies are regulations and laws set by the government that impact how businesses operate Policies are decisions made by the government. - create business opportunities or restrictions.
30
examples of government policies?
Taxation rates trade and industry employment relations.
31
how do government policies influence operations management?
create rules and regulations that businesses have to follow which may lead to business opportunities or costs.
32
what are legal regulations
**legal aspects that businesses need to comply with. ** laws that influence how practices and processes are conducted
33
what is compliance and compliance cost
Compliance - the range of laws a business must comply with. compliance cost - cost associated with meeting legal requirements.
34
how do legal regulations influence the operations function
Shape the practices and procedures the operations function must follow.
35
what is an example of legal regulations in the operations process?
management of labour: - WHS - safe use and interaction (machienery, PPE, pollution) - Training and development - (skills to work effectively) - fair work and anti-discriminatory laws - (dignity, respect) Anti-discrimination act (1977)
36
What is environmental sustainability?
Shape business operations around practices that consume resources without compromising future access to resources.
37
What are the three main aspects to environmental sustainability?
1. Sustainable use of renewable resources 2. Reduction in use of non-renewable resources 3. Application of precuationary principle.
38
What is the precautionary principle?
Requires when environmental impacts are uncertain business must undertake actions with the least environmental impact.
39
How does environmental sustainablity impact operations management?
- Need to integrate a long term sustaible view of resource management into business planning and practice - Reduce and minimise waste, recycling and reducing carbon foot print.
40
How is Yakult environmentally sustainable?
- removed plastic straws from packaging - use recyclable packaging for bottles and wrapping
41
What is corporate social responsibility?
Open and accountable business actions based on respect for people, society and environment. Involves businesses doing more than complying with laws and regulations.
42
What does coporate social responsibility place value on?
* Financial returns * Social responsibility * Environemtnal sustainability
43
What is triple bottom line?
Refers to financial profibaility, social impact and environmental impact of a business.
44
How does corporate social responsibility impact operations management?
- Manage effects of activities on society/environment - Minimise negative impacts - Understand how and where inputs are sourced - minimises environmental damage and waste - Shape processes to integrate CSR principles in recruitment practice - diverse employees.
45
how does yakult demonstrate corporate social responsibility?
- **Retraining staf**f whose jobs have been replaced due to advancements in technology instead of mamking them redudant - **Removed plastic straws** three years before government policy - **Clean wastewate**r to ensure no live bacteria or acidity so it is safe for environment - Only **open 5 days** a week - consider employee wellbeing - Source their products from **local businesses** - instead of cheap overseas options.
46
What is the difference between legal compliance and ethical responsibility?
1. Legal requirements require businesses to follow the letter of the law - prescribed standards of behaviour 2. Ethical responsibility - meeting all legal obligations and furthering their intetion and spirit of the law.
47
What does ethical responsibility indicate in business?
- Management values more than maximum profits - Demonstrating committment to act beyond expectations for benefit of society.
48
What areas does compliance include?
1. Labour law compliance 2. Environental and public health compliance 3. Business licensing rules 4. Taxation 5. Trade practices and fair market dealings 6. Intellectual property 7. Human rights
49
How does legal compliance and ethical responsibility influence operations?
- Must abide by relevant and applicable laws despite costs - Businesses may opt for lowest level of permissble compliance - business is incuring lowest compliance costs - profits biggest goal
50
What is outsourcing?
use of third party specialist businesses to take advantage of specialist skills provided by them to achieve reduced labour costs.
51
What is offshore outsourcing and its benefits?
Offshore - activities to a provider in another country. - Take advantage of regulatory differences between nations. - Different compliance requirements. - Low taxation rates - Lower standards of labour - Weaker environmental and intellectual property regulations
52
What is onshore outsourcing?
Onshore - Involves the use of domestic businesses as the outsourcing provider.
53
What is ethical responsibility
Involves businesses going beyond the law and considering broader social, community and environmental concerns.
54
What challenge may a business encounter when trying to fulfil ethical responsibility and how can they resolve it ?
- Laws and regulations differ between nations - Hard to know how to be ethical in different situations - Consily special interest or international bodies in decision making
55
What factors do manufacturing businesses have to consider as part of their ethical responsibility?
- Standards of labour - Wages - Health - Safety - Training - International Labour Standards
56
What is the International Labour Organisation?
- Provides international labour standards. - Holds International Labour Conference - Raise matters about workplaces and rights of employees (Maternity protection, Safe working conditions provisions)
57
How are new standards recognised and implemented in the International Labour Organisation?
- Workplace issues put into report - If majority agree to recomendations it becomes International Labour Standard
58
What is an example of a service based business failing to fulfil their ethical responsibility?
- Commonwealth Bank criticised for management of customer relationships - ABC Four Courners reported cases where payout claims made by terminally ill clients were rejected.
59
What is the relationship between economic development and environmental sustainability?
- Economic growth - achieved sustably - Methods that conserve resources - Should not occur at expense of polluting and degrading natural world. - Balance between economic and environmental concerns
60
What do consumers increasingly expect businesses to do in response to climate change?
- Adopt greenhouse reduction measures - Encourage development of long term sustainable strategies
61
What are two simultaneous goals of a socially responsible business?
1. Expand business 2. Provide for greater good of society
62
What is the benefit of being socially responsible for businesses?
- Customers reward by buying more or react by stoping buying - Despite short temr costs - long term benefits - Provides markeitng opportunities - promote business virtues.

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