Business - operations Flashcards
1
Q
lean production
A
every resource paid for is getting maximum usage - no under use of labour/machinery
2
Q
strategic role of operations
A
gaining a long-term competitive advantage over competitors via cost leadership or product differentiation
3
Q
cost leadership
A
make the product with the lowest cost and highest profit, a lower cost will increase demand for a product
4
Q
methods of determining price (selling price)
A
cost, market, competition
5
Q
costs of a business
A
input, transformation, output (getting products to customers - eg. delivery)
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
7
Q
relationship between cost and quality
A
direct relationship
8
Q
ways to classify products (product differentiation)
A
- tangibility and perishability
- customisation
- ownership
- time between production and consumption
- determination of value
9
Q
product differentiation define
A
distinguishing products from competitiors
10
Q
how can goods be differentiated
A
- features
- quality
11
Q
how can services be differentiated
A
- time spent
- level of expertise
- level of qualifications
- quality/materials/technology used
12
Q
cross branding
A
another name for strategic alliance - it adds value to products by offering consumers added benefits eg. coles and shell
13
Q
goods in different industries (4)
A
- customised - varied
- standardised - mass produced
- perishable
- non-perishable
14
Q
services in different industires (2)
A
standardised, customised
15
Q
4 key business functions
A
operations, marketing, HR and finance
16
Q
influences on operations (7) TELGGQC
A
technology, environmental sustainability, legal regulation, globalisation, government policies, quality expectations, cost-based competition, cooperate social responsibility
17
Q
globalisation define
A
the removal or trade barriers to allow for free trade and economic integration
18
Q
globalisation +
A
- cheaper labour/resources (different regulations)
- can achieve cost leadership - competitive advantage
19
Q
globalisation -
A
- complexity in production process
- increase in competition, may need to lower price, this decreases profit margin
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
21
Q
supply chain define
A
the range of suppliers a businesses has and the nature of its relationship with those suppliers
22
Q
Sourcing define
A
operations strategy that requires finding the suppliers
needed so that production processes can flow smoothly.
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
24
Q
A
25
26
27
2 alternative approaches to the supply chain
reverse engeneering and innovation
28
reverse engeneering define
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.
29
innovation define
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.
30
technology define
the design, construction and /or application of innovative devices, methods and machinery to operation processes.
31
examples of administrative technology
Gantt charts, CPA, laptops, phones
32
examples of operational technology
machinery, equipment, CAD, CAM, CIM
33
technology +
- efficiency
- decrease in lead times - comp.adv.
- decrease in LRAC - less labour needed
34
technology -
- retraining of staff
- redundancy costs
- expensive in the shortrun
- not as ethical as labour
35
quality expectations define
how well designed, made and functional goods are. it is also the overall degree of competence with which services are organised and delivered
36
quality expectations of goods (3)
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
37
quality expectations of services (3)
1. professionalism
2. reliability
3. customisation
38
cost based competition define
determines break even point then applies strategies to create cost advantages over competitors
39
2 types of costs
1. fixed costs
2. variable costs
40
government policies define
source of change for businesses, they can become legal and regulations
41
types of government policies
company tax, interest rates, GST
42
legal regulation
a business must comply with the laws , called 'compliance cost'
43
environmental sustainability
business operations should be shaped around practices that consume resources today without compromising access to those resources for future generations
44
2 aspects of enviornmental sustainability
1. sustainable use of renewable resources
2. reduction in the use of non-renewable resources
45
CSR define
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”.
46
difference between legal compliance and ethical responsibility
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,
47
CSR +
- recycling and reusing can save costs
- positive brand image
- generate sales
48
CSR -
- expensive to source env. friendly materials
- some customers may not care (waste of money)
- time consuming
49
what laws do businesses need to comply with
- labour laws
- env. and public health laws
- trade practices laws
- licensing, taxation, accounting
50
onshore outsourcing
use of domestic businesses as the outsourcing provider
51
offshore outsourcing
activities in another country, takes advantage of regulatory differences
52
ethical responsibility define
beyond the law, and broadening social, community and environmental concerns
53
environmental sustainability
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
54
difference between env. sustainability and social responsibility
env - evaluates the full impacts on the environment of their operations
social - expand the business and provide greater good for society
55
inputs define
resources used in the production process: transformed, transforming
56
transformed inputs (3)
Customers
Information
Materials
57
input - materials
basic elements: raw materials, intermediate goods
58
input - information
knowledge gained from research, influences decision making
59
2 types of information - input (CIM)
external - market reports, stats, ABS
internal - financial reports, KPIS, quality reports
60
input - customers
become transformed resources when their choices shape inputs. Their desires customer acts as an input, then their desired act as a transformed resource
61
Customer Relationship Management program (CRM)
systems that businesses use to maintain customer contact
62
transforming resources (2)
HR and facilities
63
Human resources - input
staff/employees carry out the operations
64
Facilities - input
plant and machinery used in the operations processes (non-current assets)
65
the 4xV's in the transformation process
Volume, Variation in demand, Variety, Visibility
66
The influence of Volume (VVVV)
volume - the quanitity
volume flexibility - how quickly the transformation process can adjust to increases or decreases in demand (lead times)
67
high volume +
- 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
68
high volume -
- resource wastage, cost leadership is compromised
- mass produced = standardised, may not appeal
- mass production can compromise quality
69
the influence of variety (VVVV)
range of products, also known as 'mix flexibility', the greater variety made, the more operations process need to allow for variation
70
variety +
- recruit a wider range of customers, increasing sales
- spreads out risk, if one product declines, there is more to generate sales
- positive brand image
71
variety -
- complex production process, not mass, therefore no economies of scale, therefore no cost leadership
- if one product is defective, this may damage brand image
72
variation in demand (VVVV)
a business being versatile to changes in consumer/market demand due to fashion, trends, economic cycles, innovations etc.
73
able to respond to variations in demand +
- 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)
74
able to respond to variations in demand -
- 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)
75
Visibility (VVVV)
level customer contact or feedback such as reviews, emails, complaints, reports
76
achieving visibility +
- 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
77
achieving visibility -
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
78
sequencing define
the order in which activities in the operations process occur
79
scheduling
the length of time activities take within the operations process
80
2 main scheduling tools
1. Gantt charts
2. Critial Path Analysis
81
Gantt Charts
- 1917 Henry Gantt
- order and time length
- used for processes with many steps
82
Gantt charts +
- 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
Critical Path Analysis
scheduling method that shows what tasks need to be done, how long they take and what order is necessary
84
technology
application of science or knowledge that enables people to perform tasks in new ways
85
technology +
- Make processes more efficient
- allowed for small/medium businesses to trade globallu
86
costs associated with technology
- retraining costs
- repair costs
- establishment costs
87
technology -
- repair costs
- retraining costs
- may not be user friendly
- establishment costs may be high with no return
88
office technology examples
- computer
- keyboard
- mobile phones
89
office technology +
enables people to do more work in less time and to work from distance from the office/home
90
telecommunicating +
- productive in silence
- mental health
91
telecommunicating -
- unsupervised -lack of productivity
- isolation -poor business culture
- negative brand image
92
Key manufacturing technologies
robotics, computer-aided design, computer-aided manufacturing
93
Computer-Aided Design
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
Computer-Aided Manufacturing
allows the manufacturing process to become computer controlled, can calculate how much of each input resources would be required
95
Robotics
robotics are used in engineering and assembly lines where a machine can complete multiple tasks.
96
Robotics +
- consistent high quality output
- no wage demands
- no complaints for dangerous work
97
Task Design
classifying job activities in a way that makes it easy for employees to complete the task
98
skills audit
process to show the current level of skilling and any skill shortfalls that need to be made up through recruitment or training
99
plant layout
the design of machinery, staff and equipment within the factory, have an impact on efficiency
100
3 types of plant layouts
process, product, fixed position
101
process layout
arrangement of machines that are grouped together by the functions they perform
102
process layout for intermittent production
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
product layout
mass production, high volume of constant quality goods. An assembly line is the most common layout
104
assembly line balancing - product layout
combination of personnel and machine use, arrangements relate to an order of tasks in manufacturing the product eg. motor vehicles, tv production
105
fixed position layout
where a product remains in one location due to its weight (large scale bulky activities) (eg. construction of bridges,ships, aircraft)
106
office layout
enable the work to be performed efficiently, discrete, seperate workstations, allows smooth work flow, and space
107
monitoring
measuring actual performance against planned performance
108
what is checked - monitoring
quality, speed, dependability, flexibility, customisation and costs
109
define KPI
Key Performance Indicators
are predetermined variables that are measured - gives a chance for the operations manager to measure what the business is doing
110
KPI examples:
lead times, inventory turnover, defect rates, volume rates, maintenance cost
111
control define
when KPIs are assessed against targets, then corrective action is taken
112
corrective action examples
redesign layout, and adjusting technology levels
113
improvement
systematic reduction of inefficiencies and wastage, and the elimination of bottlenecks - involves analysing operations processes and improving them
114
bottlenecks
disruption in the production process where production cannot continue because an input hasnt arrived
115
what areas is improvement aimed at
time, quality, cost, process flow, efficiency through waste reduction
116
continuous improvement
ongoing commitment to achieving perfection
117
outputs in the transformation process
customer service and warranties
118
customer service
inputs, transformation process, and outputs are all meeting or exceeding customer expectations
119
customer service (+)
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
warranties
warranty claims are made against goods that have defects
121
warranties (+)
trust in product, customer loyalty, CSR, satisfaction, point. of differentiation
122
Operations strategies (9) SNOOT QRIG
supply chain management, new product or service design and development, outsourcing, objectives, technology, quality management, resistance to change, inventory management, global factors
123
performance objectives (targets, KPI)
quality, speed, dependability, flexibility, customisation, cost
124
quality - KPI
consumer expectations, help a business apply standards.
Quality of design, quality of conformance, quality of service
125
speed - KPI
time it takes for product in prod. process to get to consumer - lead times
126
dependability - KPI
reliability of products - measured with amount of warranty claims (for goods), and complaints (for services)
127
flexibility - KPI
how quickly operations processes can adjust to changes in the market.
128
how to achieve flexibility - KPI
for goods - can be achieved by increasing capacity of production (better use of plant)
for services - increasing skill level, technology improvements
129
customisation - KPI
creation of individualised products to meet the needs of customers
"mass customisation"
130
cost - KPI
minimise expenses by technology, less quality inputs, minimising waste, managing inventory
131
product design and development (2 approaches)
1. consumer approach - preferences and desires
2. greater use of technology - for new appealing products to be made
132
prototype
test/sample product
133
service design and development
can be customised, standardised, or differentiated
134
explicit service
tangible aspect of the service eg. time, expertise, skill, effort
135
implicit service
based on a feeling (intangible)
136
supply chain management
managing the flow of supplies through the inputs, transformation processes and outputs to meet consumer needs
137
sourcing
purchasing of inputs
138
supplier rationalisation
assessing the number of suppliers in order to reduce some
139
supplier rationalisation (+)
good relationship with supplier
discounts
economies of scale
140
supplier rationalisation (-)
makes the business vulnerable
high risk
141
3 aspects of supply chain management
1. logistics
2. E-commerce
3. global sourcing
142
global sourcing
businesses purchasing supplies globally
143
global sourcing (+)
cost and expertise may be superior overseas
access to new technology and resources
144
global sourcing (-)
increased use of logistics and storage
relocation of some aspects of production
145
E-commerce
buying/selling of g/s via the internet
146
E-commerce (+)
convenient, can access global customers, enables business to sell a range of products
147
E-commerce (-)
competitive, business needs to be able to manage inventory, SCM is more complex, internet site may not be user-friendly
148
E-procurement
online supply management, allows suppliers direct access to the businesses level of supplies.
- B2B
- B2C
149
B2B
business to business, direct access from one business to the other
150
B2C
Business to consumer - businesses may sell directly to consumers
151
Logistics
distribution, transport, use of storage, warehousing and materials handling and packaging
152
distribution - logistics
ways of getting the g/s to consumer
153
ideal distribution and why?
producer-consumer
decrease lead times, quality control, increase profit margin
154
EDI
Electronic Data Interchange - ordering supplies/stock via a businesses computer system
155
outsourcing (Business Process Outsourcing)
use of external providers (third-party) to perform a function
156
outsourcing (+)
focus on core business function, access to cheaper labour/materials (regulatory differences), improved service levels
157
outsourcing (strategic +)
getting around trade barriers, trading in different time zones, strong global relationships
158
outsourcing (-)
may lose control over quality, labour exploitation, operational downsizing - loss of employment, bad CSR, language barriers
159
technology
innovative advancements within the transformation process
160
2 types of technology
1. leading-edge technology
2. established technology
161
leading-edge tech.
most advanced/innovative at any point in time, it is made via innovative processes
162
bleeding edge tech.
tech. that is new and has a greater degree of risk of unreliability
163
leading-edge tech. (+)
increase speed, decrease costs, decrease resource wastage, others may not have used it yet (comp. adv)
164
leading-edge (-)
expensive, unreliable, training of staff, not user-friendly
165
established technology
tech. that has been developed and widely used eg. robotics, CAD, CAM, CIM
166
established technology (+)
reliable, easy and cheap for repair, userfriendly
167
established technology (-)
widespread (no comp. adv.), perception that it lacks innovation, less efficient than leading-edge
168
inventory management
stock/work-in-progress/finished goods
169
holding stock (+)
demand can be met, reduces lead times, stock is an asset (good for balance sheet to attract investors)
170
holding stock (-)
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
LIFO
Last In First Out - most recent stock gets sold first (want to sell new stock first)
172
examples where LIFO will be found
shoe shops, car retailer, clothing business, Apple
173
LIFO (+)
higher margin, decreases tax liability (lower gross profit)
174
FIFO
First In First Out - stock is used in order that it was put in the stockroom
175
examples of where FIFO will be found
dairy shops, fruit shops, florists
176
FIFO (-)
increases tax liability (higher gross profit)
177
JIT
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
JIT (+)
less storage, less wastage, positive brand image (commitment to satisfaction)
179
JIT (-)
business must respond quickly to variations, suppliers MUST be reliable (risk), hard to access more supplies if need be
180
Quality management and 3 aspects
processes that ensures, consistency, fitness for purpose, reliabiloty, safety of a product
1. QC
2. QA
3. QI
181
quality control
reduces defects by various checkpoints in the production process.
Reactive approach.
employee retraining
182
Quality assurance
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
ISO 9000
International Organisation for Standardisation - enhances domestic/international competitiveness
184
Quality improvement
involves feedback from internal and external customers to determine if changes are needed
- continuous improvement
- TQM
185
where does resistance to change arise from
1. financial
2.psychological
186
resistance to change (6)
1. financial costs
2. purchasing new equipment
3. redundancy payouts
4. retraining
5. reorganising plant layout
6. inertia
187
purchasing new equipment (resistance to change)
(it is a capital cost), benefits: shorter lead times, more consistency, higher quality, reduced waste (less equipment failure)
188
redundancy payouts (resistance to change)
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
retraining (resistance to change)
cost from reorganisation of the businesses internal hierarchy from technology
190
reorganising plant layout (resistance to change)
high costs, transport, training, replacement of old equipment, losses of productivity (new work processes and arrangements)
191
inertia (resistance to change)
psychological resistance, feeling of uncertainty, fear unemployment, or find new technology intimidating
192
managing change effectively
need to anticipate change, proactive people initiate change rather than react to it, reactive people wait for change to occur (not good)
193
change management strategies
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
global sourcing (+)
cost advantages - cheaper labour/resources, access. to new technologies, expertise advantages
higher quality - higher quality inputs, and lower costs, increasing competitiveness and profits
195
global sourcing (-)
relocation of some operations - increased logistics costs, storage, distribution
communication problems - language barriers
risks - exchange rate fluctuations
196
aspects of global factors (SLERDS)
global Sourcing, Eco. of scale, Scanning and Learning, Research and Development
197
ecoeconomies of scale
as a business increases a unit of output, LRAC will fall
198
economies of scale (-)
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
economies of scale (+)
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
Scanning and Learning
checking global environment for most efficient practices, can also get info from staff/managers who worked elsewhere
201
research and development
spend money/research to find ways to improve/introduce products/create leading-edge technologies. Central objective is to meet customer needs
