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Business - operations > Business - operations > Flashcards

Business - operations Flashcards

1
Q

lean production

A

every resource paid for is getting maximum usage - no under use of labour/machinery

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2
Q

strategic role of operations

A

gaining a long-term competitive advantage over competitors via cost leadership or product differentiation

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3
Q

cost leadership

A

make the product with the lowest cost and highest profit, a lower cost will increase demand for a product

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4
Q

methods of determining price (selling price)

A

cost, market, competition

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5
Q

costs of a business

A

input, transformation, output (getting products to customers - eg. delivery)

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6
Q

ways to decrease costs

A
  • cheaper inputs = lower quality
  • technology
  • economies of scale (increasing size of operations and to reduce LRAC)
  • minimising waste
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7
Q

relationship between cost and quality

A

direct relationship

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8
Q

ways to classify products (product differentiation)

A
  • tangibility and perishability
  • customisation
  • ownership
  • time between production and consumption
  • determination of value
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9
Q

product differentiation define

A

distinguishing products from competitiors

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10
Q

how can goods be differentiated

A
  • features
  • quality
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11
Q

how can services be differentiated

A
  • time spent
  • level of expertise
  • level of qualifications
  • quality/materials/technology used
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12
Q

cross branding

A

another name for strategic alliance - it adds value to products by offering consumers added benefits eg. coles and shell

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13
Q

goods in different industries (4)

A
  • customised - varied
  • standardised - mass produced
  • perishable
  • non-perishable
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14
Q

services in different industires (2)

A

standardised, customised

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15
Q

4 key business functions

A

operations, marketing, HR and finance

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16
Q

influences on operations (7) TELGGQC

A

technology, environmental sustainability, legal regulation, globalisation, government policies, quality expectations, cost-based competition, cooperate social responsibility

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17
Q

globalisation define

A

the removal or trade barriers to allow for free trade and economic integration

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18
Q

globalisation +

A
  • cheaper labour/resources (different regulations)
  • can achieve cost leadership - competitive advantage
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19
Q

globalisation -

A
  • complexity in production process
  • increase in competition, may need to lower price, this decreases profit margin
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20
Q

features that global businesses seek to target global markets

A
  • Product design must meet the needs of global consumers
  • The choice of location for manufacturing facilities
  • The quality management, logistics and inventory management processes, are all orientated towards a global market
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21
Q

supply chain define

A

the range of suppliers a businesses has and the nature of its relationship with those suppliers

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22
Q

Sourcing define

A

operations strategy that requires finding the suppliers
needed so that production processes can flow smoothly.

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23
Q

global web define

A

refers to the network of
suppliers a business has, chosen on the basis of lowest overall cost,
lowest risk and maximum certainty in quality and timing of supplies.The

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24
Q
A
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25
Q
A
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26
Q
A
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27
Q

2 alternative approaches to the supply chain

A

reverse engeneering and innovation

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28
Q

reverse engeneering define

A

this is a process that involves a business taking the
product of a competitor that has already been released into the market. The product is taken apart and is then imitated using different materials and for a lower cost.

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29
Q

innovation define

A

this occurs when a business creates new. products and in doing
so leads the market. Innovation can lead to the development of new products or a new technology.

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30
Q

technology define

A

the design, construction and /or application of innovative devices, methods and machinery to operation processes.

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31
Q

examples of administrative technology

A

Gantt charts, CPA, laptops, phones

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32
Q

examples of operational technology

A

machinery, equipment, CAD, CAM, CIM

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33
Q

technology +

A
  • efficiency
  • decrease in lead times - comp.adv.
  • decrease in LRAC - less labour needed
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34
Q

technology -

A
  • retraining of staff
  • redundancy costs
  • expensive in the shortrun
  • not as ethical as labour
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35
Q

quality expectations define

A

how well designed, made and functional goods are. it is also the overall degree of competence with which services are organised and delivered

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36
Q

quality expectations of goods (3)

A
  1. quality of design - matrials used etc.
  2. durability - how reliable it is
  3. fitness for purpose - does it do what it is intended to do
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37
Q

quality expectations of services (3)

A
  1. professionalism
  2. reliability
  3. customisation
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38
Q

cost based competition define

A

determines break even point then applies strategies to create cost advantages over competitors

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39
Q

2 types of costs

A
  1. fixed costs
  2. variable costs
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40
Q

government policies define

A

source of change for businesses, they can become legal and regulations

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41
Q

types of government policies

A

company tax, interest rates, GST

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42
Q

legal regulation

A

a business must comply with the laws , called ‘compliance cost’

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43
Q

environmental sustainability

A

business operations should be shaped around practices that consume resources today without compromising access to those resources for future generations

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44
Q

2 aspects of enviornmental sustainability

A
  1. sustainable use of renewable resources
  2. reduction in the use of non-renewable resources
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45
Q

CSR define

A

refers to open and accountable
business actions based on respect for people, community\society and the
environment. It involves businesses doing more than just complying with
laws and regulations. CSR places value on financial returns (profits) as well
as social responsibility and environmental sustainability i.e. businesses
can achieve the “Triple Bottom Line”.

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46
Q

difference between legal compliance and ethical responsibility

A

ethical responsibility means a business takes its practices further than just legal compliance, businesses dont have to do this by law but it can increase profit in the longrun , eg. using env. friendly practices,

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47
Q

CSR +

A
  • recycling and reusing can save costs
  • positive brand image
  • generate sales
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48
Q

CSR -

A
  • expensive to source env. friendly materials
  • some customers may not care (waste of money)
  • time consuming
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49
Q

what laws do businesses need to comply with

A
  • labour laws
  • env. and public health laws
  • trade practices laws
  • licensing, taxation, accounting
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50
Q

onshore outsourcing

A

use of domestic businesses as the outsourcing provider

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51
Q

offshore outsourcing

A

activities in another country, takes advantage of regulatory differences

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52
Q

ethical responsibility define

A

beyond the law, and broadening social, community and environmental concerns

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53
Q

environmental sustainability

A

sustainability): involves
businesses using resources to meet the needs of the current generation
without compromising (reducing) the ability of future generations to
meet their needs

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54
Q

difference between env. sustainability and social responsibility

A

env - evaluates the full impacts on the environment of their operations
social - expand the business and provide greater good for society

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55
Q

inputs define

A

resources used in the production process: transformed, transforming

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56
Q

transformed inputs (3)

A

Customers
Information
Materials

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57
Q

input - materials

A

basic elements: raw materials, intermediate goods

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58
Q

input - information

A

knowledge gained from research, influences decision making

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59
Q

2 types of information - input (CIM)

A

external - market reports, stats, ABS
internal - financial reports, KPIS, quality reports

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60
Q

input - customers

A

become transformed resources when their choices shape inputs. Their desires customer acts as an input, then their desired act as a transformed resource

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61
Q

Customer Relationship Management program (CRM)

A

systems that businesses use to maintain customer contact

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62
Q

transforming resources (2)

A

HR and facilities

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63
Q

Human resources - input

A

staff/employees carry out the operations

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64
Q

Facilities - input

A

plant and machinery used in the operations processes (non-current assets)

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65
Q

the 4xV’s in the transformation process

A

Volume, Variation in demand, Variety, Visibility

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66
Q

The influence of Volume (VVVV)

A

volume - the quanitity
volume flexibility - how quickly the transformation process can adjust to increases or decreases in demand (lead times)

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67
Q

high volume +

A
  • mass produce = economies of scale - cost leadership, comp adv
  • reduced lead times - any excess stock can be used to meet increasing demand
  • simplification of the production process
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68
Q

high volume -

A
  • resource wastage, cost leadership is compromised
  • mass produced = standardised, may not appeal
  • mass production can compromise quality
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69
Q

the influence of variety (VVVV)

A

range of products, also known as ‘mix flexibility’, the greater variety made, the more operations process need to allow for variation

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70
Q

variety +

A
  • recruit a wider range of customers, increasing sales
  • spreads out risk, if one product declines, there is more to generate sales
  • positive brand image
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71
Q

variety -

A
  • complex production process, not mass, therefore no economies of scale, therefore no cost leadership
  • if one product is defective, this may damage brand image
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72
Q

variation in demand (VVVV)

A

a business being versatile to changes in consumer/market demand due to fashion, trends, economic cycles, innovations etc.

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73
Q

able to respond to variations in demand +

A
  • increasing sales/profits in times of sudden surges
  • business can increase prices in increased demand periods
  • less wastage of stock
  • positive brand image - able to keep up with consumer needs (satisfaction)
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74
Q

able to respond to variations in demand -

A
  • it may be difficult to acquire certain inputs quickly
  • if the product is too widely available it may cheapen the brand image, if it is an exclusive brand (predictions of demand need to be accurate)
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75
Q

Visibility (VVVV)

A

level customer contact or feedback such as reviews, emails, complaints, reports

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76
Q

achieving visibility +

A
  • business can tailor their products to meet preferences - positive brand image, increase in sales , customer satisfaction
  • stronger connection with customers, stronger brand loyalty
  • makes a business more responsive to changes in demand - enhances brand image
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77
Q

achieving visibility -

A

business will need to invest more resources into their business , this may compromise cost leadership
- negative reviews may be leaked to the public - negative brand image

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78
Q

sequencing define

A

the order in which activities in the operations process occur

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79
Q

scheduling

A

the length of time activities take within the operations process

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80
Q

2 main scheduling tools

A
  1. Gantt charts
  2. Critial Path Analysis
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81
Q

Gantt Charts

A
  • 1917 Henry Gantt
  • order and time length
  • used for processes with many steps
82
Q

Gantt charts +

A
  • force a manager to plan steps and specify time required
  • make it easy to monitor process to planned process
  • can determine quickest way to complete tasks
  • visual representation - easier to communicate to employees
83
Q

Critical Path Analysis

A

scheduling method that shows what tasks need to be done, how long they take and what order is necessary

84
Q

technology

A

application of science or knowledge that enables people to perform tasks in new ways

85
Q

technology +

A
  • Make processes more efficient
  • allowed for small/medium businesses to trade globallu
86
Q

costs associated with technology

A
  • retraining costs
  • repair costs
  • establishment costs
87
Q

technology -

A
  • repair costs
  • retraining costs
  • may not be user friendly
  • establishment costs may be high with no return
88
Q

office technology examples

A
  • computer
  • keyboard
  • mobile phones
89
Q

office technology +

A

enables people to do more work in less time and to work from distance from the office/home

90
Q

telecommunicating +

A
  • productive in silence
  • mental health
91
Q

telecommunicating -

A
  • unsupervised -lack of productivity
  • isolation -poor business culture
  • negative brand image
92
Q

Key manufacturing technologies

A

robotics, computer-aided design, computer-aided manufacturing

93
Q

Computer-Aided Design

A

tool that helps businesses create product possibilities. The design, time, material usage can be calculated. This enables the cost of the project to be quantified

94
Q

Computer-Aided Manufacturing

A

allows the manufacturing process to become computer controlled, can calculate how much of each input resources would be required

95
Q

Robotics

A

robotics are used in engineering and assembly lines where a machine can complete multiple tasks.

96
Q

Robotics +

A
  • consistent high quality output
  • no wage demands
  • no complaints for dangerous work
97
Q

Task Design

A

classifying job activities in a way that makes it easy for employees to complete the task

98
Q

skills audit

A

process to show the current level of skilling and any skill shortfalls that need to be made up through recruitment or training

99
Q

plant layout

A

the design of machinery, staff and equipment within the factory, have an impact on efficiency

100
Q

3 types of plant layouts

A

process, product, fixed position

101
Q

process layout

A

arrangement of machines that are grouped together by the functions they perform

102
Q

process layout for intermittent production

A

deals with high-variety and low volume production. In this process, each product has a different order of production (intermittent), moving from one department to the other. (Eg. creation of work cells)

103
Q

product layout

A

mass production, high volume of constant quality goods. An assembly line is the most common layout

104
Q

assembly line balancing - product layout

A

combination of personnel and machine use, arrangements relate to an order of tasks in manufacturing the product eg. motor vehicles, tv production

105
Q

fixed position layout

A

where a product remains in one location due to its weight (large scale bulky activities) (eg. construction of bridges,ships, aircraft)

106
Q

office layout

A

enable the work to be performed efficiently, discrete, seperate workstations, allows smooth work flow, and space

107
Q

monitoring

A

measuring actual performance against planned performance

108
Q

what is checked - monitoring

A

quality, speed, dependability, flexibility, customisation and costs

109
Q

define KPI

A

Key Performance Indicators
are predetermined variables that are measured - gives a chance for the operations manager to measure what the business is doing

110
Q

KPI examples:

A

lead times, inventory turnover, defect rates, volume rates, maintenance cost

111
Q

control define

A

when KPIs are assessed against targets, then corrective action is taken

112
Q

corrective action examples

A

redesign layout, and adjusting technology levels

113
Q

improvement

A

systematic reduction of inefficiencies and wastage, and the elimination of bottlenecks - involves analysing operations processes and improving them

114
Q

bottlenecks

A

disruption in the production process where production cannot continue because an input hasnt arrived

115
Q

what areas is improvement aimed at

A

time, quality, cost, process flow, efficiency through waste reduction

116
Q

continuous improvement

A

ongoing commitment to achieving perfection

117
Q

outputs in the transformation process

A

customer service and warranties

118
Q

customer service

A

inputs, transformation process, and outputs are all meeting or exceeding customer expectations

119
Q

customer service (+)

A

customer satisfaction, business can charge 10% more for the same g/s, grow twice as fast as competitors, increase market share and profits, LT relationship

120
Q

warranties

A

warranty claims are made against goods that have defects

121
Q

warranties (+)

A

trust in product, customer loyalty, CSR, satisfaction, point. of differentiation

122
Q

Operations strategies (9) SNOOT QRIG

A

supply chain management, new product or service design and development, outsourcing, objectives, technology, quality management, resistance to change, inventory management, global factors

123
Q

performance objectives (targets, KPI)

A

quality, speed, dependability, flexibility, customisation, cost

124
Q

quality - KPI

A

consumer expectations, help a business apply standards.
Quality of design, quality of conformance, quality of service

125
Q

speed - KPI

A

time it takes for product in prod. process to get to consumer - lead times

126
Q

dependability - KPI

A

reliability of products - measured with amount of warranty claims (for goods), and complaints (for services)

127
Q

flexibility - KPI

A

how quickly operations processes can adjust to changes in the market.

128
Q

how to achieve flexibility - KPI

A

for goods - can be achieved by increasing capacity of production (better use of plant)
for services - increasing skill level, technology improvements

129
Q

customisation - KPI

A

creation of individualised products to meet the needs of customers
“mass customisation”

130
Q

cost - KPI

A

minimise expenses by technology, less quality inputs, minimising waste, managing inventory

131
Q

product design and development (2 approaches)

A
  1. consumer approach - preferences and desires
  2. greater use of technology - for new appealing products to be made
132
Q

prototype

A

test/sample product

133
Q

service design and development

A

can be customised, standardised, or differentiated

134
Q

explicit service

A

tangible aspect of the service eg. time, expertise, skill, effort

135
Q

implicit service

A

based on a feeling (intangible)

136
Q

supply chain management

A

managing the flow of supplies through the inputs, transformation processes and outputs to meet consumer needs

137
Q

sourcing

A

purchasing of inputs

138
Q

supplier rationalisation

A

assessing the number of suppliers in order to reduce some

139
Q

supplier rationalisation (+)

A

good relationship with supplier
discounts
economies of scale

140
Q

supplier rationalisation (-)

A

makes the business vulnerable
high risk

141
Q

3 aspects of supply chain management

A
  1. logistics
  2. E-commerce
  3. global sourcing
142
Q

global sourcing

A

businesses purchasing supplies globally

143
Q

global sourcing (+)

A

cost and expertise may be superior overseas
access to new technology and resources

144
Q

global sourcing (-)

A

increased use of logistics and storage
relocation of some aspects of production

145
Q

E-commerce

A

buying/selling of g/s via the internet

146
Q

E-commerce (+)

A

convenient, can access global customers, enables business to sell a range of products

147
Q

E-commerce (-)

A

competitive, business needs to be able to manage inventory, SCM is more complex, internet site may not be user-friendly

148
Q

E-procurement

A

online supply management, allows suppliers direct access to the businesses level of supplies.
- B2B
- B2C

149
Q

B2B

A

business to business, direct access from one business to the other

150
Q

B2C

A

Business to consumer - businesses may sell directly to consumers

151
Q

Logistics

A

distribution, transport, use of storage, warehousing and materials handling and packaging

152
Q

distribution - logistics

A

ways of getting the g/s to consumer

153
Q

ideal distribution and why?

A

producer-consumer
decrease lead times, quality control, increase profit margin

154
Q

EDI

A

Electronic Data Interchange - ordering supplies/stock via a businesses computer system

155
Q

outsourcing (Business Process Outsourcing)

A

use of external providers (third-party) to perform a function

156
Q

outsourcing (+)

A

focus on core business function, access to cheaper labour/materials (regulatory differences), improved service levels

157
Q

outsourcing (strategic +)

A

getting around trade barriers, trading in different time zones, strong global relationships

158
Q

outsourcing (-)

A

may lose control over quality, labour exploitation, operational downsizing - loss of employment, bad CSR, language barriers

159
Q

technology

A

innovative advancements within the transformation process

160
Q

2 types of technology

A
  1. leading-edge technology
  2. established technology
161
Q

leading-edge tech.

A

most advanced/innovative at any point in time, it is made via innovative processes

162
Q

bleeding edge tech.

A

tech. that is new and has a greater degree of risk of unreliability

163
Q

leading-edge tech. (+)

A

increase speed, decrease costs, decrease resource wastage, others may not have used it yet (comp. adv)

164
Q

leading-edge (-)

A

expensive, unreliable, training of staff, not user-friendly

165
Q

established technology

A

tech. that has been developed and widely used eg. robotics, CAD, CAM, CIM

166
Q

established technology (+)

A

reliable, easy and cheap for repair, userfriendly

167
Q

established technology (-)

A

widespread (no comp. adv.), perception that it lacks innovation, less efficient than leading-edge

168
Q

inventory management

A

stock/work-in-progress/finished goods

169
Q

holding stock (+)

A

demand can be met, reduces lead times, stock is an asset (good for balance sheet to attract investors)

170
Q

holding stock (-)

A

costs (storage, theft), obsolescence (need for discount or cant sell), decrease in profit (business may need to lower the price to sell the stock)

171
Q

LIFO

A

Last In First Out - most recent stock gets sold first (want to sell new stock first)

172
Q

examples where LIFO will be found

A

shoe shops, car retailer, clothing business, Apple

173
Q

LIFO (+)

A

higher margin, decreases tax liability (lower gross profit)

174
Q

FIFO

A

First In First Out - stock is used in order that it was put in the stockroom

175
Q

examples of where FIFO will be found

A

dairy shops, fruit shops, florists

176
Q

FIFO (-)

A

increases tax liability (higher gross profit)

177
Q

JIT

A

Just In Time, it is not an inventory valuation method, only management method and can be combined with LIFO/FIFO - only ordering amount of products needed for demand

178
Q

JIT (+)

A

less storage, less wastage, positive brand image (commitment to satisfaction)

179
Q

JIT (-)

A

business must respond quickly to variations, suppliers MUST be reliable (risk), hard to access more supplies if need be

180
Q

Quality management and 3 aspects

A

processes that ensures, consistency, fitness for purpose, reliabiloty, safety of a product
1. QC
2. QA
3. QI

181
Q

quality control

A

reduces defects by various checkpoints in the production process.
Reactive approach.
employee retraining

182
Q

Quality assurance

A

proactive approach
use of a system. to ensure pre-standards are achieved, this is done by taking a series of measurements and assessing them against pre-standards
“fitness for purpose” and “right forst time”

183
Q

ISO 9000

A

International Organisation for Standardisation - enhances domestic/international competitiveness

184
Q

Quality improvement

A

involves feedback from internal and external customers to determine if changes are needed
- continuous improvement
- TQM

185
Q

where does resistance to change arise from

A
  1. financial
    2.psychological
186
Q

resistance to change (6)

A
  1. financial costs
  2. purchasing new equipment
  3. redundancy payouts
  4. retraining
  5. reorganising plant layout
  6. inertia
187
Q

purchasing new equipment (resistance to change)

A

(it is a capital cost), benefits: shorter lead times, more consistency, higher quality, reduced waste (less equipment failure)

188
Q

redundancy payouts (resistance to change)

A

redundancy - loss of work arising from job skills that are no longer needed
payouts - quite high, depends on the length of employment, level of pay, amount of unused leave

189
Q

retraining (resistance to change)

A

cost from reorganisation of the businesses internal hierarchy from technology

190
Q

reorganising plant layout (resistance to change)

A

high costs, transport, training, replacement of old equipment, losses of productivity (new work processes and arrangements)

191
Q

inertia (resistance to change)

A

psychological resistance, feeling of uncertainty, fear unemployment, or find new technology intimidating

192
Q

managing change effectively

A

need to anticipate change, proactive people initiate change rather than react to it, reactive people wait for change to occur (not good)

193
Q

change management strategies

A
  1. identify the change
  2. lower the resistance to the change - communicate with employees
  3. change agents (internal/external professionals)
  4. apply change models (Lewin’s unfreeze, change, refreeze)
194
Q

global sourcing (+)

A

cost advantages - cheaper labour/resources, access. to new technologies, expertise advantages
higher quality - higher quality inputs, and lower costs, increasing competitiveness and profits

195
Q

global sourcing (-)

A

relocation of some operations - increased logistics costs, storage, distribution
communication problems - language barriers
risks - exchange rate fluctuations

196
Q

aspects of global factors (SLERDS)

A

global Sourcing, Eco. of scale, Scanning and Learning, Research and Development

197
Q

ecoeconomies of scale

A

as a business increases a unit of output, LRAC will fall

198
Q

economies of scale (-)

A
  1. inputs may not be available in large quantities
  2. may not be enough demand to reach technical optimum (a business may overproduce - resource wastage, this limits their ability to achieve cost leadership)
199
Q

economies of scale (+)

A
  1. LRAC - can achieve cost leadership
  2. increased efficiency - all resources are being employed
  3. money saved in prod. costs, can be used for R and D
  4. lower costs - profit maximisation
200
Q

Scanning and Learning

A

checking global environment for most efficient practices, can also get info from staff/managers who worked elsewhere

201
Q

research and development

A

spend money/research to find ways to improve/introduce products/create leading-edge technologies. Central objective is to meet customer needs

Business - operations (1 decks)

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