Chapter 4: Operations Strategies Flashcards
\_\_\_\_\_\_\_ \_\_\_\_\_\_\_ include: • Performance objectives • New product or service design and development • Supply chain management • Outsourcing • Technology • Inventory management • Quality management • Global factors • Overcoming resistance to change What's missing?
Operations strategies
________ _______ are goals that relate to particular aspects of the transformation process
What’s missing?
Performance objectives
The 6 main \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_ that can be allocated to particular key performance indicators are: • Quality • Speed • Dependability • Flexibility • Customisation • Cost What's missing?
Performance objectives
\_\_\_\_\_\_ performance objectives include: • Quality of design • Quality of conformance • Quality of service What's missing?
Quality
______ ___ _______ is the focus on how well the product meets the standard of a prescribed design with certain specifications
What’s missing?
Quality of conformance
A high-______ _____ for a good will be clear from the high-grade materials used in manufacturing, the care and presentation of the good, how aesthetically pleasing and functional the good is, and how robust and long-lasting it is
What’s missing?
Quality design
______ ___ _____ refers to:
• how reliable the service is
• how well the service meets the specific needs of the client
• how timely or responsive the service delivery is
What’s missing?
Quality of service
_____ refers to the time it takes for the production and the operations process to respond to changes in market demand
What’s missing?
Speed
\_\_\_\_\_ aims to satisfy customer demands, goals include: • reduced wait times • shorter lead times • faster processing times What's missing?
Speed
________ refers to how consistent and reliable a business’s products are, usually measured by warranty claims
What’s missing?
Dependability
_______ refers to how quickly operations processes can adjust to changes in the market and best achieved by increasing the capacity of production
What’s missing?
Flexibility
_________ refers to the creation of individualised products to meet the specific needs of the customers
What’s missing?
Customisation
____ _________ is a process that allows a standard, mass-produced item to be personally modified to specific customer requirements
What’s missing?
Mass customisation
____ refers to the minimisation of expenses so that operations processes are conducted as cheaply as possible
What’s missing?
Cost
Operations strategies are based around the need to achieve _________ ________
What’s missing?
Performance objectives
_________ ________ are goals that relate to particular aspects of the transformation function and can be allocated to particular key performance indicators (KPIs) in the areas of:
• Quality
- Design; how well a good is made or a service is delivered
- Conformance; how well the good or service meets a prescribed design with a certain specification
- Service; how reliable, suitable and timely the service delivery is
• Speed - the time it takes for the production and the operations processes to respond to changes in market demand
• Dependability - how consistent and reliable a business’s goods or services are
• Flexibility - how quickly operations processes can adjust to changes in the market
• Customisation - the creation of individualised goods or services to meet the specific needs of the customers
• Cost - the minimisation of expenses so that operations processes are conducted as cheaply as possible
What’s missing?
Performance objectives
The design, development, launch and sale of new products enables a business to grown and to attain a ________ _______
What’s missing?
Competitive advantage
There are different approaches to product ______ and ________ which include:
• Consumer approach - the preferences and desires of consumers
• Changes and innovations in technology - advanced technologies enable new, appealing products to be made, which give products greater functionality
What’s missing?
Design and development
Important considerations arising in product ______ and ________ include:
• Market research, product concept and specification development
• Product design and prototype development with quality parameters decided
• Prototype testing and assessment (includes market testing)
• Product refinement and production processes refined
• Production product launch, distribution and product line extension
What’s missing?
Design and development
Important considerations when \_\_\_\_\_\_\_\_ and \_\_\_\_\_\_\_\_\_ a product are: • Quality • Supply chain management • Capacity management • Cost What's missing?
Designing and developing
______ _____ _________ is an important consideration because a new product will draw from suppliers and may extend the range of supplies sought, the timing or the volume of supplies
What’s missing?
Supply chain management
______ is a factor that must be considered because in this market-oriented production, the customers will demand particular quality, and certain attributes and features
What’s missing?
Quality
Any new product will have an impact on ______ and may increase the use or range of present resources, or require an investment in new technology and machinery
What’s missing?
Capacity
_____ arises from the addition of value through processing and can be determined from the amount of inputs, time and energy used in processing
What’s missing?
Cost
______ ______ is defined as the usefulness and value that a product has from the consumers’ point of view
What’s missing?
Product utility
______ ______ is also called the tangible aspect of the service being provided, such as the application of time, expertise, skill and effort
What’s missing?
Explicit service
______ ______ is based on a feeling and is therefore intangible, the implicit aspects of a service are the psychological wellbeing - the feeling of being looked after - that comes with the provision of the service
What’s missing?
Implicit service
______ _____ differs from the design and development of products as services are intangible and ‘consumed’ as they are produced
What’s missing?
Service design
_______ refers to the purchasing of inputs for the transformation process
What’s missing?
Sourcing
Factors influencing choice of \_\_\_\_\_\_/\_\_\_\_\_\_ include: • Consumer demand • Quality of inputs required • Flexibility and timelines of supply • Cost of supplier What's missing?
Sources/suppliers
_____ _____ _______ includes all inputs, transformation processes and outputs
What’s missing?
Supply chain management (SCM)
_____ _____ _______ involves integrating and managing the flow of supplies throughout the inputs, transformation processes (throughput and value adding) and outputs in order to best meet the needs of customers
What’s missing?
Supply chain management
\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_ inputs include: • Sourcing (domestic, global) • E-commerce • Raw materials • Other inputs like energy What's missing?
Supply chain management
_____ _____ _______ transformation processes include:
• Throughput
• Value adding
What’s missing?
Supply chain management
\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_ outputs include: • Finished or semi-finished goods or services • Logistics • Distribution What's missing?
Supply chain management
The 3 key aspects to \_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_\_ include: • Sourcing • E-commerce • Logistics What's missing?
Supply chain management
4 particular trends in ______ ______ ________ include:
• Supplier rationalisation
• Vertical integration (backwards)
• Cost minimisation
• Flexible/responsive supply chain processes
What’s missing?
Supply chain management
_______ __________ involves assessing the number of suppliers in order to reduce the number of suppliers to the least amount
What’s missing?
Supplier rationalisation
_______ ________ is purchasing through mergers or acquisitions of suppliers
What’s missing?
Vertical integration
____ ________ is the reduction of expenses so that operations processes are conducted as cheaply as possible
What’s missing?
Cost minimisation
_______ ______ ______ ________ is requiring suppliers to respond quickly and effectively on demand
What’s missing?
Flexible supply chain processes
_____ _______ is a broad term that refers to businesses purchasing supplies or services without being constrained by location (in the supply chain management activity, global sourcing means buying or sourcing from wherever the supplies are that best meet the sourcing requirements)
What’s missing?
Global sourcing
Benefits of _____ _______ include:
• Cost and expertise advantages
• Access to new technologies and resources
What’s missing?
Global sourcing
Some challenges that arise with _____ ______ include:
• Possible relocation of aspects of operations
• Increased costs of logistics
• Storage and distribution
• Managing different regulatory conditions between nations, increasing complexity of overall operations when sourcing from diverse locations
What’s missing?
Global sourcing
_-______ involves the buying and selling of goods and services via the internet
E-commerce
_-________, or the use of on-line systems to manage supply, allows suppliers direct access to the business’s level of supplies
E-procurement
_____ __ _____ (B2B) refers to direct access from one business (the supplier) to another (the buyer), allowing the supplier to assess the needs of the buyer and meet them in a timely manner
Business to business
______ __ ______ (B2C) is the selling of goods and services to consumers over the internet, with payment usually by credit card
Business to consumers
______ is a term broadly referring to distribution but includes:
• Transportation (including transportation modes)
• The use of storage
• Warehousing and distribution centres
• Materials handling and packaging
Logistics
_______ refers to the ways of getting goods or services to the customer
Distribution
There are different forms of physical _______ that a business may use, these include:
• Producer –> Agent –> Retailer –> Consumer
• Producer –> Retailer –> Consumer
• Producer –> Consumer
• Producer –> Global agent –> Domestic offshore agent –> Retailer –> Consumer
Distribution
These factors that will determine the \_\_\_\_ \_\_ \_\_\_\_\_ include: • Speed • Distance • Cost • Capacity
Mode of transport
_____ involves finding a secure place to hold stock until it is required
Storage
______ is defined as the use of warehouses for the storage, protection and, later, distribution of stock
Warehousing
Particular costs associated with ______ include:
• The premises
• Insurance and security
• Stacking and moving
• Carrying excess stock or redundant stock
• Shrinkage costs and losses from theft
• Stock subject to damage
Warehousing
_______ _____ (DCs) are not intended for long term storage as they are strategically located to minimise the time it takes to supply stock to retail outlets
Distribution centres
______ _____ _____ (BPO) is a term that captures a range of outsourced business processes including:
• Operations - manufacturing, value-adding manufactures, design, merchandising, sourcing, distribution, logistics
• Human Resources - employee remuneration, employee counselling, pensions, data management, training and development, travel, expenses management
• Administrative Work - data entry, ‘back office’ work
• Information Technology (IT) - data work, desktop/networking outsourcing (remotely hosted software applications)
Business process outsourcing
Some types of ______ include:
• Finance and accounting - reports, analytics, taxation compliance
• Knowledge process - marketing strategy paralegal support, legal support, legal services
Outsourcing
There are 4 ______ options:
• Creation of shared services centres (SSC)
• Use of ‘fee-for-service’ arrangement
• Joint ventures
• Use of a ‘build-operate-transfer’ approach
Outsourcing
Advantages of ______ include:
• Simplification - reducing the number of activities performed
• Efficiency - cheaper labour, regulatory differences and skilled labour in offshore locations
• Increased process capability - improved technologies, products are produced and delivered to the market with improved levels of service
• Increased accountability - the use of service level agreements (SLAs) contractually bind the vendor to pre-determined targets on KPIs
• Access to skills/resources - sourcing cheap labour prevents the need to spend money on training
• Capacity - allows the business to focus on its core, vision, purpose and sustainable advantages
Outsourcing
Another advantage of ______ is strategic benefits which include 4 important aspects:
• Get around trade barriers
• The use of a vendor can bring expertise
• Different time zones allow operations to be conducted day and night
• Strong partnerships between the business and the outsourcing vendor can lead to the vendor suggesting innovative solutions
Outsourcing
The disadvantages of _____ include:
• Payback periods - the time it takes to repay the cost of organising outsourcing
• Communication - involves keeping a strong relationship, cultural differences can lead to misinterpretations
• Loss of control - the businesses standards and information security are at risk when outsourcing
• Hierarchies - managing complex outsourcing agreements can create it own hierarchies thereby maintaining business inefficiency
• Organisational change - could include downsizing, causing the loss of domestic employment
• Loss of corporate memory and vulnerability - reliance on the vendor
• Information technology - cost and time associated with the use of adaptation to IT
Outsourcing
______ _____ technology is the technology that is the most advanced or innovative at any point in time
Leading edge
_______ technology is the technology that has been developed and widely used and is simply accepted without question
Established
_______ technologies include:
• Barcoding and point-of-sale (POS) data for inventory management
• Robotics for complex and detailed manufacturing
• Computer-aided design (CAD), computer-aided-manufacturing (CAM), computer-integrated-manufacturing (CIM) for integrating transformation processes
• Information processing technologies and information technologies (IT) for administration, logistics, input modelling, demand analysis, distribution
• Flexible manufacturing systems (FMS) for transformation processes
Established
_____ _____ technology can help businesses to:
• Create more products quickly and to higher standards
• Reduce waste
• Operate more effectively
Leading edge
_______ technology helps business to establish basic standards for productivity and speed
Established
Both _____ ____ and _______ technologies give businesses efficiencies, productivity gains and a capacity to improve operations processes
Leading edge and established
______ or stock refers to the amount of raw materials, work-in-progress and finished goods that a business has on hand at any particular point in time
Inventory
_______ of holding stock include:
• Consumer demand can be met
• Other alternatives can be offered if a particular product is out
• Reduces lead time
• Generates immediate revenue
• Stocks can be distributed to distribution centres and then transported to the places indicated by demand
• Allows the business to promote use of products in new markets
• Older stock can be sold at reduced prices to attract sales of other products
• Stocks are an asset and are of value reflecting well on the balance sheet
• Making products in bulk may reduce costs as there are economies of scale in purchasing inputs
Advantages
_________ of holding stock include:
• Costs such as, storage charges, spoilage, insurance, theft and handling expenses
• Invested capital, labour and energy cannot be used elsewhere
• Cost of obsolescence if stocks remains unsold
Disadvantages
The main inventory valuation techniques include:
• LIFO (___-__-____-___)
• FIFO (____-__-____-___)
• WAC (_____-_____-____)
- Last-in-first-out
- First-in-first-out
- Weighted-average-cost
The LIFO (___-__-____-___) method of pricing inventory assumes that the last goods purchased are also the first goods sold and therefore the cost of each unit sold is the last cost recorded
Last-in-first-out
The FIFO (____-__-____-___) method of pricing inventory assumes that the first goods purchased are also the first goods sold and therefore the cost of each unit sold is the first cost recorded
First-in-first-out
JIT (___-__-____) is an inventory management approach which ensures that the exact amount of material inputs will arrive only as they are needed in the operation process
Just-in-time
The method of ______ affects the calculation of the value of the goods sold, the value of the unsold stock and the gross profit
Valuation
Businesses are seeking to become ‘____’ meaning they emphasise low cost
Lean
____ businesses apply a JIT (Just-in-time) approach to inventory management, which means to make to order
Lean
____ ______ refers to those processes that a business undertakes to ensure consistency, reliability, safety and fitness of purpose of product
Quality management
‘____’ is a term used to describe the degree of excellence of a product or service, and its fitness for a stated purpose
Quality
There are numerous approaches to ____ ______ which include:
• Quality Control - inspection, measurement and intervention
• Quality Assurance - application of international quality standards
• Quality Improvement - total quality management and continuous improvement
Quality management
Quality _____ involves the use of inspections at various points in the production process to check for problems and defects
Control
Quality _____ management may require that labour is appropriately trained to apply quality standards throughout working processes
Control
Quality ______ involves the use of a system to ensure that set standards are achieved in production
Assurance (QA)
What does ISO stand for?
International Organisation for Standardisation
Quality ______ focuses on 2 aspects:
• Continous improvement
• Total quality management
Improvement
______ improvement is an ongoing commitment to improving a business’s goods or services
Continous
___ _____ is a quality management approach that seeks to identify and remove the causes of problems in the operations processes, achieving virtually defect-free production
Six sigma
The ____ _____ management (TQM) concept focuses on managing the total business to deliver quality to consumers
Total quality
To achieve \_\_\_\_ \_\_\_\_ management (TQM) objectives, it requires 4 elements: • Benchmarking • Employee empowerment • Focus on the customer • Continuous improvement
Total quality
Examples of \_\_\_\_\_ from the external environment include: • Legislative and regulatory • Changes in economic conditions • Social changes • Technological breakthroughs
Change
______ to change arises from 2 principal sources within a business:
• Financial
• Psychological/emotional
Resistance
The main financial costs associated with _____ include:
• Cost of purchasing new equipment
• Cost of redundancies
• Costs of retraining employees
• Costs associated with structural reorganisation - changes to plant and equipment layout
Change
Advantages of purchasing new equipment in the period of _____ include:
• Improved processing flexibility
• Improved processing speeds and shorter lead times
• More consistency in production
• Higher overall quality of processing
• Reduced wastage and losses from equipment failure
Change
______ is defined as a loss of work arising from job skills that are no longer required or relevant to the workplace
Redundancy
______ payouts are quite high because the value of the payment depends on:
• A certain number of weeks of pay must be paid
• The level of pay the employee is on
• The amount of unused leave that the employee has accrued
• Any outstanding wages
Redundancy
____ is a term that describes a psychological resistance to change
Inertia
For a business to manage _____, they must:
• Handle one problem at a time
• Thoroughly evaluate the change to assess the overall impact
• Have a supportive workplace culture
Change
_____ management should apply the following steps:
• Identify the source of change - accomodate change through adjustments to business processes
• Lower the resistance to change - communicate with employees
• Use of change agents
Change
A _____ _____ is somebody who initiates change or facilitates the change process
Change agent
There are several \_\_\_\_\_ factors that present opportunities which include: • Global sourcing • Economies of scale • Scanning and learning • Research and Development (R&D)
Global
Benefits of \_\_\_\_\_ \_\_\_\_\_\_ include: • Cost advantage • Access to new technologies • Advantages of expertise and labour specialisation • Access to other resources
Global sourcing
Challenges arising with _____ _____ include:
• Relocation of aspects of operations
• Increased cost of logistics
• Storage and distribution
• Managing different conditions between nations
Global sourcing
______ __ ____ refers to cost advantages that can be gained by producing on a larger scale
Economies of scale
Kaizen is Japanese for ‘_______’
Improvement
All businesses can benefit from \_\_\_\_\_\_ and \_\_\_\_\_\_ and these elements help business people to learn from one another: • Management journals • Industry and business associations • Conferences • Other forums
Scanning and learning
______ of experience helps businesses learn how to handle any issue with flexibility and insight
Diversity
Government encourages ______ and ________ (R&D) and may offer taxation incentives and grants
Research and Development
_______ and _______ can be a very valuable operations management tool as it can help managers adapt best practice to the business operations
Scanning and learning
_______ and ________ (R&D) can make a very big difference to the level innovation, quality and competitive advantage of a business
Research and Development
