Finance Interacting With The Organisation Flashcards
What is operation management?
Refers to the activities involved in designing, producing and delivery products and services that satisfy customers’ requirements
What are operations?
Refer to activities concerned with the acquisition of raw materials, their conversion into finished products and the supply of that finished product to the customer.
• Contemporary thinking has broadened to include service operations in addition to manufacturing operations
What is Porter’s value chain?
This model considers the organization’s activities that create value and drive costs.
• primary activities - directly concerned with the creation or delivery of a product or service
• Secondary or Support activities - help improve the efficiency and effectiveness of primary activities
What is process design?
is a method by which individual specialist seek to understand business processes and to ensure these processes are to be as efficient and effective.
• A useful tool - a process map
What is a supply chain?
Supply Chain consists of a network of organisations and they provide the necessary raw materials input to the firm’s value chain
What is supply chain management?
refers to the activities that manages the flow of information, money and materials across the extended firm, from supplier through the functions of the firm to customer. It is believed that by co-ordinating the activities in the supply chain can save costs and add values.
How should supply chain management support corporate and supply strategies?
Planning [supported by the use of Enterprise Resource Planning (ERP) system]
• Quality management (by lowering the quality related costs)
• Operational improvements (more details in following slides)
What is total quality management?
TQM is the continuous improvement in quality, productivity and effectiveness obtained by establishing management responsibility for process and outputs.
• Every process has an identified process owner and every person contribute to improvement.
• It also focuses on error prevention.
What is Kaizen operational improvement?
Kaizen (改善)
• originated in Japan, it is a Japanese term for the philosophy of continuous improvement via small, incremental steps.
• This could be considered as under the TQM.
What is six sigma operational improvements?
is a quality management programme pioneered in the
1980s by Motorola.
• aims to achieve a that goes beyond the statistical process control.
• 6 Sigma refers to the probability of 3.4 defects in every million. Tolerance level (Target) is to control defects less than 6 Sigma (4 defects in a million).
• Reduces quality related costs
What is lean thinking operational improvements?
systematically eliminate waste through identification and elimination of all non-value adding activities. Toyota is the pioneer of this method.
• Wastes to be eliminated involves inventory, waiting time, defective units, effort or motion of staff, transportation distance and time, over-processing and over-production.
What is just in time operational improvements?
It is a system to produce or procure products or components as they are required by customers or for use, rather than for inventory.
• Aims to keep all inventory to a minimum.
• A kind of demand pull system, usually, production and procurement are driven by customer order and required highly reliable suppliers and speed.
• Toyota again pioneered the JIT system.
What are the interactions between operations and finance?
Operation management is an important part for income generation.
• The operation function and the finance function should work in partnership to ensure its efficiency and effectiveness is optimized.
• Important areas where these 2 functions interacts: • Purchasing
• Production
• Service provision
What are KPI’S?
Critical success factors (CSFs) are the vital areas where things must go right for the firm in order for them to achieve their strategic objectives.
• Key Performance Indicators (KPIs) are the measures to check whether the CSFs are being achieved.
What should good KPI’s have?
Good KPIs should have the following characteristics
• span across strategic, tactical and operational level
• cover a complete and well balanced view of • Internal & external performance
• Short&longtermperformance
• Financial & non-financial performance
• SMART (specific, measurable, achievable, relevant and time-bound)
What are some examples of KPI’s?
Warehouse costing Supply chain cost per unit sold Percentage of customers fulfilled Asset utilisation rate Wait times Transport costs
What is marketing?
Defined by Chartered Institute of Marketing (CIM), marketing is the management process that identifies, anticipates and supplies customer needs efficiently and profitably.
What are the main roles of marketing?
Main roles • Marketing planning • Understand the marketing environment • Understand the marketing mix • Apply main techniques of marketing • Market research • Market segmentation • Targeting • Market positioning
What is the marketing planning process?
This is to ensure the effectiveness of Sales & Marketing function. There are 6 steps:
- Situation analysis
- Review mission and objectives
- Set marketing objectives
- Devise an appropriate marketing strategy 5. Implementation
- Review
What is the marketing mix?
is the set of controllable variables that a firm blends to produce desired results from its chosen target market. A framework for marketing mix is called the 4Ps.
What are the 4 P’s?
Product
Place
Promotion
Price
