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HSC Business studies summary notes > 10.1 Operations - Role of operations management > Flashcards

10.1 Operations - Role of operations management Flashcards

1
Q

Definition of operations management

A

Is the transformation of inputs to outputs to meet requirements of customers while making efficient use of resources

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2
Q

1.1 Role of operations management

What operation management includes

A

It involves the certain of goods and the provision of services by:

  • Planning activities
  • Purchasing inputs
  • Managing inventory
  • Selecting and implementing manufacturing processes
  • Developing strategies to gain a sustainable competitive advantage
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3
Q

1.1 Role of operations management

Advantages of effective operation management

A

Adds value to the business by:

  • Increasing productivity
  • Reducing costs
  • Improving quality
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4
Q

1.1 Role of operations management

Impacts of effective operation management

A

Aims to achieve a competitive advantage through lower cost and/or different goods.

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5
Q

1.1 Role of operations management

Long term planning - strategic goals

A
  • Improving productivity
  • Efficiency
  • The quality of outputs
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6
Q

1.1 Role of operations management

Advantages of using technology

A

It is an advantage by producing a more constant quality item at a cheaper price.

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7
Q

1.1 Role of operations management

Strategic operation decisions include

A
  • Operations of inputs and equipment
  • What combination of human and technological resources to use
  • Where to locate
  • Level of quality
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8
Q

1.1 Role of operations management

All strategic decisions focus on achieving a competitive advantage…

A
  • Cost leadership: focuses on high volume of output as cheap as possible and suits mass production.
  • Differentiation: Focuses on costly operations due to designs, innovations, and features that make the goof ot service difficult.
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9
Q

1.1 Strategic role of operation management.

The role

A

focuses on being the most priced- competitive in thr market

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10
Q

1.1 Strategic role of operation management.

managers focus on product differentiation…

A
  • Varying product features
  • Varying product quality
  • Varying augmented features (add ons)
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11
Q

1.1 Strategic role of operation management - Cost leadership.

What is it?

A

establishing a competitive advantage by having the lowest cost of operations in the industry by:

  • fewer features
  • lower quality
  • Using low cos packaging
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12
Q

1.1 Strategic role of operation management - Cost leadership.

How is low cost is achieved through strategies?

A
  • Building efficient production facilities
  • Time and money efficiency to keep cost of sales low
  • Tight control over overhead costs
  • Economies of sale
  • Accessing cheap raw materials from suppliers
  • Outsourcing non core business functions
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13
Q

1.1 Strategic role of operation management - Cost leadership.

Maccas example of cost leadership

A
  • Basic food at low cost

- Keep production cost low by division of labour

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14
Q

1.1 Strategic role of operation management - Cost leadership.

IKEA example of cost leadership

A
  • Producing cheap but stylish furniture
  • Source their products in low wage countries
  • Offer very basic customer service
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15
Q

What are economic scales?

A
  • Cost advantage that’s created because of an increase in scale of business operations.
  • The cost of savings come from being able to purchase lower cost per unit of input and efficiencies created from the improved use of technology.
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16
Q

Economic scales cont.

A
  • Efficient production
  • Spread risks
  • Reduction in promotion cost
  • Cheaper capital
  • Reduction in logistic costs
  • Buy in bulk
17
Q

1.1 Strategic role of operation management - good/service differentiation

Product differentiation strategy

A
  • Product unique characteristic strategy, enables a company to charge premium and achieve above average returns thereby achieving competitive advantage.
  • A products achieves a greater market share with the quality, service and technology differences from its competitors.
18
Q

1.1 Strategic role of operation management - good/service differentiation

Product differentiation: GOODS

A
  • Varying actual product features
  • Varying the product quality
  • Varying any argumented features
19
Q

1.1 Strategic role of operation management - good/service differentiation

Product differentiation: SERVICES

A
  • Varying the time spent
  • Varying the expertise brought to a service
  • Varying the level of qualifications and experience on the service provider
  • Varying the qualities of materials/ technology used in the service delivery
20
Q

1.1 Goods and/or services in different industries

Description

A

Operations need to consider what industry they’re in and what they are producing in order to effectively manage the operations process.

21
Q

1.1 Goods and/or services in different industries

Perishable and non perishable goods

A

How long a good last will determine how quickly the distribution will be.

Non perishable goods are usually more durable and are found in many industries

22
Q

1.1 Goods and/or services in different industries

Intermediate goods

A

One that may go through more than one operational process or further processing.

23
Q

1.1 Goods and/or services in different industries

Intermediate goods examples

A

Zara - they buy or manufacture their own fabric to make the final customer a shirt (good).

Coca cola - Use sugar to produce their final product.

24
Q

1.1 Goods and/or services in different industries

Standardised goods

A
  • Mass produced
  • Standardization is achieved by accepted guidelines in regards to how a product or service is created.
  • The GOAL of standardisation is consistency or uniformity in quality.
  • Enables lower cost.
25
Q

1.1 Goods and/or services in different industries

Standardised goods example

A

Zara do not customize their clothing (to achieve economic of scale during production)

26
Q

1.1 Goods and/or services in different industries

Customised goods

A
  • Varied according to customers needs
  • Products modified to satisfy customers needs.
  • May be referred as “build to order”
27
Q

1.1 Interdependence with other key business functions

Finance

A
  • Will collect data and analyse the functional performances of operations.
  • Supply funding for capital equipment and plant in order for production.
  • Distribute funds in order to pay for raw material.
28
Q

1.1 Interdependence with other key business functions

Marketing

A
  • Marketing must understand the capabilities and limitations of operating when specifying product features and designs.
  • To research, promote and sell the product
29
Q

1.1 Interdependence with other key business functions

Research and development

A

Will develop new product based on the capabilities of operations.

30
Q

1.1 Interdependence with other key business functions

Technology

A

Information technology will manage communication of information.

31
Q

1.1 Interdependence with other key business functions

HR

A
  • HR will provide suitable staff based on the requirements of operations.
  • Train staff and work schedules
  • Ensure correct workplace legislation is adhered to.
32
Q

1.1 Interdependence with other key business functions

Engineering

A

Assess new technology and develop solutions to problems

33
Q

1.1 Interdependence with other key business functions

Other operations are dependent on operations….

A

HR: Ensuring operations inform HR with staff allocations required for productions.

Finance: relies on operations to keep their expenses down and produce efficiently and effectively at the lowest cost.

HSC Business studies summary notes (2 decks)

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