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Business Operations - operations strategies Flashcards

1
Q

what are performance objectives

A
  • quality
  • speed
  • dependability
  • flexibility
  • customisation
  • cost
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2
Q

what is quality (performance objectives)

A

relates to the physical good or service and also the process used to produce the product
- good quality process would get operations right the first time –> minimal defects + wastes

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3
Q

what are quality expectations (performance objectives)

A
  • conforming to specifications
  • high performance
  • high durability
  • reliability
  • aesthetics
  • serviceability
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4
Q

case study on quality operations (performance objectives)

A

McDonalds : sources quality raw meat + fresh and hygienic materials

QANTAS : clean aircraft + courteous staff + on time planes

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5
Q

what is speed (performance objectives)

A

refers to the time taken for production and operations processes to respond to change in the market demand

speed of productivity can become more efifcient with technology
–> CAD + CAM + robotics

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6
Q

what is the disadvantages of high speed (performance objectives)

A
  • other production processes may not keep up

- increase chances of equipment failure + human labour fatigue –> leads to mistakes

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7
Q

case studies on speed (performance objectives)

A

McDonalds : simplification of menu leads to focus on speed, with recommended times for tasks

QANTAS : has implemented online booking + check in kiosks at terminal

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8
Q

what is dependability (performance objectives)

A

is the reliability of products or services

  • how well the product is designed and how long the products work + standard expected from customers
  • how well business can fill orders + distribute them to the market on time
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9
Q

what is flexibility (performance objectives)

A

how easily and quickly operations can switch to new model or variation of a good to meet changes in the market

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10
Q

what is customisation (performance objectives)

A

is concerned with how quickly a product can be redesigned to produce a unique good or service that matches the customers desire

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11
Q

customisation case study (performance objectives)

A

McDonalds : create your own taste / gourmet creation menu
–> was removed due to problematics and risked speed of production

QANTAS : offers JetStar as alternative which offers different classes seating (economy + business + first-class)

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12
Q

what are costs (performance objectives)

A

efficiency is a key objective in operations and cost objectives are concerned with keeping costs low
- key measure of costs is using efficiency ratio + average costs

it can be categorised into 5 areas;

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13
Q

categories of costs (performance objectives)

A

fixed : do not change as outputs change E.g. cost of factory building or lease for office

semi fixed : E.g. power bills may be split into standard chargers and excess power chargers

variable : changes as out put change E.g. raw materials

direct : related to production or supply service E.g. cost of goods sold

indirect : relates to outputs E.g. salaries

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14
Q

what are the case studies of costs (performance objectives)

A

McDonalds : salaries/wages vs self-serve/mobile apps

QANTAS : controls costs by replacing QANTAS with JetStar on some international routes

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15
Q

what are product design and development

A
  • consumer approach : focuses on the preference and desires of consumers
  • changes and innovations inn technology : enables new appealing products to be made because of leading-edge tech
  • -> gives products greater functionality
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16
Q

what are service design and development

A

service design : being customisable has always taken position of the customer or client starting point in design. important aspects;

  • explicit service : tangible aspect of service
  • implicit services : psychological well being
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17
Q

what are case studies of service design and development

A

McDonalds : internet data revealed takeaway coffee makes up 86% of total coffee sales
–> therefore coffee is now made available in drive-thru

Apple : constantly strives to create new technology that will differentiate from its competitions

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18
Q

what are the supply chain management

A 
involves integrating and managing the flow of supplies throughout the inputs, transformation process and outputs in order to meet customer needs
the three key aspects;
- sourcing - including global sourcing
- e-commerce
- logistics
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19
Q

what is top down (supply chain management)

A

supply for a product can be determined by looking at the final product and tracking backwards through all the process that add value

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20
Q

what is sourcing (supply chain management)

A

refers to the purchasing of inputs for the transformation processes
they are drawn from;
- trends
- global sourcing

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21
Q

what are factors influencing choice of suppliers (sourcing)

A
  • customer demands
  • quality of inputs
  • flexibility and speed supply
  • cost
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22
Q

what are trends (sourcing)

A

suppliers rationalisation : involves assisting the number of suppliers in order to reduce total number of suppliers –> finding most effective

backwards vertical integration : purchasing through mergers or acquisition of suppliers

cost minimisation : using offshore suppliers to reduce costs

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23
Q

what is global sourcing (sourcing)

A

refers to businesses purchasing supplies or services without being constrained by location
–> links with globalisation

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24
Q

what are the benefits of global sourcing (sourcing)

A
  • cost and expertise advantage

- access to new technologies and resources

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25
Q

what are the challengers of global sourcing (sourcing)

A
  • possible relocation of operations
  • increased costs of logistics + storage + distribution
  • managing different regulatory conditions of different countries
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26
Q

what is outsourcing

A

where the business takes on contractors to do what that can be performed by the business
- technology has increased effectiveness of outsourcing

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27
Q

what is onshore outsourcing

A

finding a contractor in the same nation

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28
Q

what is offshore outsourcing

A

contractors in third nation that can be outside within the immediate region

29
Q

what is near shore outsourcing

A

contractors in close nation within region

30
Q

what are the advantages of outsourcing

A
  • cost effective
  • specialised support
  • simplification of business processes
  • capacity to focus on core competencies
  • improvement in quality
31
Q

what are the disadvantages of outsourcing

A
  • perception of business image can become compromised
  • domestic employment decreases
  • issues with communication
  • loss of corporate memory and costs associated with IT, organisational changes
  • increased accountability
  • loss of control standards + information security
32
Q

what is technology

A

equipment and knowledge that are available to help businesses perform certain functions or make products
- can result in making operations more efficient –> cost effective

33
Q

what does the business need to take into account regarding technology

A
  • speed of change taking place
  • technology competitors are using
  • finance available for a change in technology
  • how long it will take to introduce the new technology
  • if staff will need to be retained or be made redundant
34
Q

what are the risks of leading edge technology

A
  • expensive
  • technological support may not be available because of how new it is –> serious costs and time wasted with inevitable damage to customer satisfaction + competitive advantage
35
Q

case study of technology

A

McDonalds : implementation of self-serve kiosks allows customers to customise their order

  • -> reducing waiting time
  • -> performance objective : customisation
36
Q

what are established technology

A

type of technology that have been tried and tested and proven, which is therefore very reliable and dependable
- may not provide competitive advantage, but the absence of it will result in a competitive disadvantage

37
Q

What is inventory management

A

inventory management and stock are often used interchangeably but both refer to business’s transformed resources
this involves;
- the advantages and disadvantages of holding stock
- LIFO
- FIFO
- JIT

38
Q

why is controlling the level of inventory important (inventory management)

A

because the business must hold enough to meet demands but not too much to oversupply

  • -> too much can lead to increase storage cost
  • -> not enough can result in loss of sales and potential damage to business reputation as a reliable supplier
39
Q

why do businesses monitor and control inventory (inventory management)

A
  • so they do not accumulate dead stock
  • identify and sell slow-moving stock
  • maintain some holding stock
  • are aware of stock losses through theft or damage
40
Q

what is holding stock (inventory management)

A

also known as buffer stock, it is where the business holds certain levels of stock to cover interruptions to supply or an unexpected increase in demand
- if there is not enough stock, business might experience “stock-out” where inventory levels fall and there is no supply of stock available

41
Q

what are the advantages of holding stock (inventory management)

A
  • stock is ready to use
  • no need to rely on suppliers for prompt delivery
  • opportunity for discounts when ordering large amount of stock
42
Q

what are the disadvantages of holding stock

A
  • it is conservative inventory management and keeps valuable liquidity tied up in stock
  • warehouse expenses for storage + security –> there is a chance that inventory becomes obsolete
  • business will have to sell huge discounts to recover cash if they experience a cash-flow crisis
  • risk that stock may go missing or destroyed
43
Q

what is LIFO (inventory management)

A

“last in first out”
used for goods with no use-by date such as machinery or canned food

advantages :

  • tax advantage because method assumes the most recent inventory is sold
  • inflation continues, LIFO produces higher costs of goods sold and lower balance of leftover inventory
  • -> higher cogs results in smaller tax liability because of lower net income

disadvantage :
- can result in older inventory not being sold or shipped

44
Q

what is FIFO

A

“first in first out”
appropriate for perishable goods such as foods or drinks

advantages :
- solves warehouse with fluctuating costs and inventory problems

45
Q

what is JIT

A

“just in time”
aim to hold minimal stock as possible and bring stock from suppliers as required

advantages :

  • flexibility to respond to changing market and other external influences
  • reduces costs of storage + avoids disadvantages of holding stock
  • increases liquidity
  • reduces chances of obsolete products

disadvantages :
- if suppliers do not deliver on time, entire production schedule is disrupted

46
Q

what is quality management

A

involves all activities to ensure that the outputs of a business are consistent, durable, reliable and meet pre-defined standards
this means that;
- they last for a long time
- is free of any defects
- does everything the advertisement claims
- is consistent in its quality
this will create a competitive advantage

47
Q

poor quality products (quality management)

A 
can result in lost of cost
this can include;
- customer returns
- poor services
- product recalls + repairs
48
Q

what are the external influences on quality of management

A
  • government may try to ensure the quality of all goods by establishing laws
    E.g. competition and consumer act 2010 (Cth) + fair trading act 1987 (NSW)
49
Q

what is quality control (quality management)

A

whereby quality of outputs are checked using methods such as sampling. this involves inspecting goods at the end of the production run to try prevent defective products sold to customers

50
Q

what are the three stages of quality control (quality management)

A
  • feed-forward control
  • concurrent controls
  • feedback controls
51
Q

what are feed-forward controls (quality management)

A

involves using careful planning, before production begins on order to prevent a problem from occurring
E.g. McDonalds : checking the size of the bun upon arrival before placing on the production line

52
Q

what are concurrent controls (quality management)

A

used during manufacturing process
E.g. coca-cola : Australia using laser beam technology to determine whether soft drink bottles have been filled to the correct level

53
Q

what is feedback controls (quality management)

A

involves checking the final product - after or delivery of the service is complete
E.g. Toyota : sends out a letter to clients after car has been serviced to gauge customer satisfaction

54
Q

what is quality assurance (quality management)

A

establishing and using a set of procedures/processes that will prevent product defects from occurring in delivery services
- quality is checked at every stage of the production

55
Q

what is the advantages of quality assurance (quality management)

A
  • fewer resources are wasted on producing defective goods

- fewer goods returned after warranty –> improves business image

56
Q

what are the disadvantages of quality assurance (quality management)

A
  • requires the business culture to focus on improving quality and motivate the workforce
  • workers may need extra training
57
Q

what is total quality management (quality management)

A

emphasis on continually improving quality outcomes at every stage of the production process with the aim of eliminating defects
- benchmarking

58
Q

what is quality improvement (quality management)

A

controls are put in place to ensure poor-quality goods are not passed on to the consumer
- generally associated with making small, continuous improvements, whereas quality is associated with periodic effort to increase outcomes

59
Q

what is overcoming resistance to change

A

when a business find changes to an extent difficult. this can involve;

  • financial costs
  • purchasing new equipments
  • redundancy payments
  • retraining
  • reorganising plant layout
  • inertai
60
Q

what is financial costs (overcoming resistance to change)

A

major reason for resistance to change is the financial costs that carries out
this could be associated with;
- purchasing new equipments
- redundancy payment for employees
- retraining costs to operate new technology
- reorganising costs associated with changing the layout of operations

overtime, these changes should make the business more profitable however, some struggle to afford those costs upfront

61
Q

what is purchasing new equipments (overcoming resistance to change)

A

offers great opportunity but enlarges upfront costs and workers may need to be retained

  • leading tech may be risky
  • long-term impact on financial position because equipment is funded from debt
62
Q

what is redundancy payment (overcoming resistance to change)

A

employees are made redundant when their skills are no longer required –> replaced by technology or equipment
- there is a financial compensation in form of redundancy payment

63
Q

what are the risks of redundancy payments (overcoming resistance to change)

A
  • significant upfront costs
  • reduces morale
  • damages social image of business
64
Q

what is retaining the workforce (overcoming resistance to change)

A

new technology means employees need to be trained

  • this can be expensive + cause disruptions due to workers being absent to train
  • may take a long time before employees become productive
65
Q

what is reorganising plant layout (overcoming resistance to change)

A

physical arrangement of people and machinery within the business
- this could offer higher efficiency + quality
however financial + personal issues could cause resistance because production has to be paused and physically moved

66
Q

what is inertia (overcoming resistance to change)

A

refers to an unenthusiastic response from internal stakeholders to the proposed changes

67
Q

why might shareholders display inertia (overcoming resistance to change)

A
  • lack of skills to implement change effectively
  • lack of confidence to lead the organisation in another direction
  • employees may resist change from fear of deskilling, job loss, higher workloads or loss of familiar work environment
68
Q

what should managers consider when overcoming resistance to change

A

for changing to be successful, managers need to consider;

  • the pace of change
  • overall impact of change
  • encouraging workplace culture of employees to participate
69
Q

what are strategies to overcome resistance to change

A
  • identify + communicate needs for change
  • setting achievable goals
  • communication to create culture of change

Business (12 decks)

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