Chapter 2: influences on ops management Flashcards
globalisation, tech, quality expectations, cost based comp, gov & legal, enviro, CSR
define globalisation and what globalisation has driven in order to enhance global integration
- globalisation is the process of increasing interactions b/w nations
- driven advancements in transportation and comms techs which have removed barrier b/w nations created by distance
list a few different types of restrictive policies that have acted as barriers to the free movement of products and finance across national borders
- tariffs: taxed placed on imported goods, encouraging consumers to buy goods produced locally
- quotas: limits placed on the amount of a particular product
- subsidies: gov grants given to buses to encourgae them to operate in the country and/or compete overseas
- embargos and licensing: embargos ban the imports of goods from a particular country (ie producers exporting req a license)
what opportunities does globalisation present to a bus
- new customers in overseas markets
- access to new tech
- access to overseas finance
- the ability to source cheaper inputs overseas
what is the main disadv of globalisation and give an example relating to the car industry
main disadv is the exposure to competition from overseas buses
eg aus car manufacturing had to shut down ops as they could no longer compete due to high costs associated with producing in aus
how has qantas taken adv of globalisation
- allowed qnatas to outsource aircraft maintenance and IT operations, lowering costs substantially
- allowed access to new markets overseas
- establishing subsidiaries in asia to take adv of grwoth in the region
how has qantas been disadv by globalisation
- exposed to greater competition - major gov subsidised airlines
- made qantas more susceptible to changes in the global eco (GFC and covid)
what must a bus change in their ops to adjust to the preferences of each country
- product design
- location of manufacturing facilities
- quality management
- logistics (the way inputs sources, stored and moved to where they are req’d)
- inventory management
define the supply chain
refers to the range of suppliers a bus has and the nature of its relo with those suppliers
define sourcing
how a bus acquires its inputs
what are the adv and disadv of sourcing inputs form overseas via globalisation
- adv: massive cost savings compared to domestically sourced
- disadv: quality and reliability and ethicality may be compromised
deinf ethe global web
the global web refers to the network of locations around the world that the bus has chosen for diff parts of the production process and supplier form whcih inputs are sourced
on what basis is the global web network chosen (what does a bus need to consider when choosing its location for diff parts of the production process and where it sources its inputs). where will buses be more attracted to
- cost, risk, quality and reliability
buses attracted to places: - located in close prox to suppliers, raw mats or target makrets
- where labour costs low
- where gov incentive such as subsidies or low tax rates exist
- where req’d tech and skills exist
whats the difference between a bus thats an imitator or an innovator
- imitator: bus that produce product similar to alr existing but at lower cost (usually by reverse engineering: take apart, see how its made and create a lower cost model)
- innovator: creates novel products leading the market (generally involve improvements to existing products, creating new opps or new ways of doing things)(seek to create supply chains that do not provide similar inputs to their competitors to differentiate)
how has the pandemic made buses steer away from the global web strategy
- ## looking to reduce dependence on particular export markets - due to short supply from lockdowns, hoarding supply, and transportations issues
explain the reasons behind slowbalisation
- political disputes (china tariffing aus)
- election of anti-globalisation leaders
- manufacturing shifting back closer to consumer markets (reshoring)
- an increasing prefernce for domestic suppliers of key inputs for greater dependability
-shifting a rnage of bus activities and relos to countries with closer and more stable political ties (friendshoring)
define tech
the design, construction and/or application of innovative deviecs, methods and machinery upon ops processes
how can tech imporve ops processes
reducing production costs, increasing the quality and consistency of output, increasing speed of productino, and enabling greater customisation of output
which technologies are used in the administration of ops (organisation, planning and decision making)
- planning technologies
- office technologies
- software
what tech is used in the ops processes itself (manufacturing, logistics and distribution, quality management, inventory management and supply chain management)
- large machine in manufacturing plants (assembly line production)
- use of robotics in production processes reqing great precision
- use of computer aided design, manufacture (CAD & CAM) and computer-integrated manufacturing (CIM) techs
- rapid manufacturing (RM) and tooling tech
how is tech important to qantas
- adopting and continually upgrading new tech is vital to maintaining cost leadership and competitive adv
- efficiency (online bookings, self-service kiosks, online and mobile check-in saving time and hassle for customers and reducing staff at the airport
- newer planes using less furl and carry more passengers
which new forms of tech are req’d for retaining existing customers and securing new ones
- inflight entertainement
-internet access and comfort features of the latest aircrafts (humidity and cabin pressure to reduce jetlag) - qnatas has also taken adv of new aircrafts flying longer distances offering direct ultra-long haul sevrices
define quality
quality is how well designed, made and functional goods are, and the degree of competence with which services are organised and delivered
how are quality and expectations interconnected and giev an example relevant to qantas
people have predetermined ideas about what the quality standards should be for products and their lvl of satisfaction with a product will indicate whetehr the quality has met with expectations or not
- eg jetstar passengers will not req the same standard of product as qantas in order to be satisfied
what are crucial factors in promoting customer loyalty
customer staisfaction and quality of service
what are the quality expectations with goods
- quality of design
- fitness for purpose
- durability
what are the quality expectations with services
- professionalism of the service provider (cleanliness of physical)
- reliability of the service-provider
- level of customisation
what has been qnatas’ reputation recently
qantas’ reputation has been battered yb recent failures to meet quality expectations of customers –> impacting long term success
what si cost based competition
it occurs where buses apply strategies to create cost advantages over competitors, allowing them to offer consumers lower prices without hurting profit margins
how do buses achieve cost leadership or to match the lower prices offered by cost leaders
operations managers have to look for ways to reduce both fixed and variable costs
- fixed: costs that do not change regardless of lebel of ouput
- variable: costs that vary as the level of output changes
why do buses in competitive markets comepte in cost based competition rather than continually increasing prices thru product differentiation
- reducing costs is a way to maximise profits when revenues are fixed (due to difficulty increasing sales volume or price in compeitive markets)
what predicament do operations management have to consider when engaging in cost-based competitiion
- tensions b/w operating at lowest possible costa nd importance of offering high quality
- high quality will reuslt in fewer mistakes or defects and reducing costs results in greater customer satisfaction and loyalty
define mass customisation
a marketing and manufacturing technique which combines the flexibility and personalisation of customised products whilst still having low unit costs thru flexible computer-aided manufacturing systems
how can a bus becoming a cost leader affect operations
when bus becomes cost leader, it attracts competition into the market - other buses try to offer similar product at low prices
eg when vrigin launched with budget carrier, qantas launched jetstar
why has qnatas faced significant compeititor growth in the international makret
federal government encourage greater compeittion in the industry forcing qantas to adopt an increasgin focus on cost innimisation
what significant cost advantages does qnatas’ compeititors have
lower wages, lower taxation and greater
government assistance (due to different laws in their home nations & being gov owned)
how can qnaats achieve the lowest compeititve cost
qantas has to focus on adopting new tech, strategic alliances, outsourcing, reforming HR practices and restructuring (but must have balance b/w cost minimisation and quality)
list a few ways local gov can influence ops management
- thru their planning powers (eg soning of land, enviro planning policies and dev application)
- regulation and provision of infrastructure (footpaths, parking and loading zones)
- health regulations (food buses)
- waste disposal sevrices
list a few ways state and territory gov can influence a buses ops
- develop transport infrastructure (roads, railways, ports)
- provision of public trnasport (trains, buses)
- regulation of public utilities (water, electricty and gas)
- wide variety of laws (payroll tax, work health &safety…)
list a few ways federal gov can influence a buses ops
- consumer protection
- enviro protection
- trade
- taxation
- bankruptcy and insolvency
- industrial relations
what are the pos and neg of the implementation of gov policies and give an example
- positive: grants to encourage research or pursue certain activities
- negative: restricting certain activities, imposing higher costs or increasing lvl of competition
- eg carbon tax or emissions tarding scheme which charges buses a levy based on the amount of carbon they produce
how has qantas ops been influenced by federal and state gov policies
- national border closures
- given fed gov subsidies for operating unprofitable domestic, regional and international flights
- access to previously protected qantas international routes had been gradually opened up
- fed gov blocked request major rival, Qatar airways, to double its flights in and out fo AUS but supportive to Qatar’s recent bid to buy 25% of virgin (threat to qnatas’ domestic and international makret share)
- ACCC calling for compensation schemes for travellers for issues such as flights delays and cancellations forcing qantas and virgin to improve their ops performance or face higher costs
- the fair work act 2009 has big impact of qnatas’ ops (eg albanese’s ‘secure jobs, better pay’ will increase labour costs shich could affect qnatas’ used of subsidiaries to carry out certain taskes and the outsourcing of other tasks
- qnaats could be offered subsidies to help cut its co2 emissions
what are compliance costs
the expenses associated with meeting the reqments of legal regulations eg buses pay amt per tonne of carbon emitted while the carbon pricing mechanism was in place
what are some laws that influence a buses ops
- WHS (also HR concern)
- enviromental protection laws
- local gov regulations (eg zoning and licensing)
- product safety laws eg toys, food
what are some legal regulations that apply to qantas
- the req to hold operating licenses issued by civil aviation safety authority (CASA)
- random drug and alcohol testing
- laws promoting competition enforced by ACCC (fined qantas $20mil in 2010 for colluding with other airlines to raise freight charges & delicned bilateral alliances that substantially reduce comepition)
- the curfew which prevents flights from landing or taking off from 11pm - 6am
define enviro sustainability
aka ecological sustanability means that bus ops should use natural resources in a way that does not compromise access for future geenrations
what are the three main asepcts to ecological sustainability
- using renewable resources in a sustainable way - eg forests
- a reduction in the use of non-renewable resources (cannot replenish and will eventually run out)
- miinimising the enviro impact of bus ops - air and water pollution
list some sustainable actions buses are adopting in their ops
- efforts to reduce and minimise waste
- recycling of water, glass, paper and metals
- efforts to reduce carbon footprint (refers to amt of carbon produced)
- application of the precautionary principle which req’s a bus to undertake actions with leas impact enviro impact
what is a key element to improving the enviro sustainability of qnatas’ operations
increasnig fuel efficiency
list some of qantas’ environmental initiatives
- optimised flight planning using satellite tech to avoid headwinds and reduce flight times
- using lightweight equipment (eg slimline seats and carbon fibre service trolleys
- committing over $300 mil in partnership w/ airbus to invest in biofuel projects ie AUS’ SAF indusrty (SAF is produced from plant materials with a 60% lower carbon footprint than traditional fuel)
- the fly carbon neutral scheme
repurposes materials form its retired aircraft into components for new planes to contribute to supply chain decarbonisation
list some examples of how qantas had minimised is contribution to environmental degredation
- reducing electricity use, water consumption and waste going to landfill (LED lights, recycled water and eliminating 100 million single-use plastics from waste)
define corporate social responsibility
open and honest business actions based on respect for people, the community and the broader environment
what is the triple bottom line
buses doing more than just complying with laws and regulations with considerations for people, profit and plant
despite the importance of CSR to a bus’s reputation and long temr success, managers may act unethically cos:
- executives often oh short term contracts with bonuses linked to short term business improvement inducing them to push ethical boundaries to improve short term bus
- poor bus behaviour may go unpunished if consumers unaware of unethical actions
- behaving ethically can be a competitive adv if other buses can get away with it
- buses may offer staff financial rewards for achieving certain performance tasks without adequate safeguards to prevent unethical conduct (ie bus pays employees to perform unethically)
what are some laws buses must comply with
- labour laws
- environmental laws
- licensing laws
- taxation
- intellectual property
- human rights
what is one way that buses have sought to reduce compliance costs or avoid the strict laws of AUS
oustourcing - using outside specialists to undertake one or more key bus functions to take adv of regulatory differences b/w nations
(tax, wages and working conditions much more beenficial in dev countries)
what is the impact of buses outsourving overseas
buses criticsed for using outsourcing providers as a screen to hide behind when laws are breached
how do buses that outsource ensure they are making ethical decisions and making sure their outsourcing partner also followes ethical standrads
- buses can consult with independent groups such as the international labour org to guide their deicison making and sure that their operations functions meet ethical standards
- buses can use service level agreements (SLAs) which ensure that outsourcing providers adhere to a high standard
define CSR
refers to a bus’s management of the social, envrionmental, political and human consequences of its actions
what two main goals does a socially responsible bus try to achieve simultaneously
expanding the bus and providing for the greater good of society
what are the general benefits of being socially responsible
- cost money in the short run but is in the buses best interest in the long run
- more consumers attracted to bus whilst punishing those not resopnsible
how does qnatas exercise CSR
- the health surveillance program: monitors workplace conditions and promotes flexible work practices
- Qantas’ reconciliation action plan focusing on employing indigenous aussies
- investing millions to reduce its carbon emissions (Fly carbon neutral scheme)
- various measures reducing electricity use, water consumption and waste
- supporting same-sex marriage
- adopting the supply chain assurance program
what are some egs of qantas’ actions that were anything but socially responsible
- making over 90 000 employees redundant during pandemic
- imposing wage freezes and offering below-inflation pay
- relating to pandemic: WHS issues, refusal to pay sick leave and pocketing pay of jobkeeper scheme
- treatment of customers: booking cancelled flights, damage to baggage and decline in service standards
- ‘greenwashing’: false claims about enviro sustainability
