Influences

Question 1

Globalisation

Answer 1

• removal of barriers to trade b/w nations
• involves increased economic integration,
• can increase production + create cost saving measures
  Impacts operations:
• (B) producing for a global market: therefore global branding + standardised products
• Some products customised for dif countries
• (b)’s attempt to standardise for EOS → design must meet needs of global consumers = reduce costs (e.g. Apple: standard product (customise apps/ languages) (McDonald’s - standard menu (dif lang)
• have access to leading-edge tech = linked to opp for product differentiation (more materials)
• Location of production: need to be near supplier (a lot cheaper: transport costs) → linked to logistics/ inventory management
• allows (b)’s to benefit from lower production + labour costs found overseas which
  may lead to the outsourcing of jobs overseas e.g. Bonds moved manufacturing ops offshore (China - but design clothes in Aus) to take adv of cheaper labour costs leading to Aus staff retrenchment = allows for suppliers overseas
• QM: needs to be higher due to global market
• SCM + global web: refers to the range of suppliers a (b) has + nature of its r/s w/ those suppliers, –> need to be highly responsive to changes in demand
  Global web = network of suppliers a (b) has chosen on basis of lowest overall cost, lowest risk + max certainty in quality + timing of supplies → cost leaders
• NEG = qual could suffer = using cheaper inputs, increased comp, can be harder to control qual (don’t have hold of QM)

Question 2

Technology

Answer 2

• important role in application of ops function
• defined by the design, construction and/or application of innovative devices, methods + machinery upon processes
• can assist w/ organisation, planning + decision making
• Processing level: tech used in a wide range of tasks inclu manufacturing, logistics, QM etc
• Tech used in admin of ops: Gantt Chart + Critical Path - analysis, computers etc
• Op processes: large machines, robotics etc
• Comp adv → quick lead times, efficiency
• Changes in tech = can influence a (b)’s ability to create + sell its g/s
• a change in tech usually allows for an increase in speed + production = generally means a reduction in time spent making product eg Samsung
  uses CAD + robotics to manufacture products = caused their assembly
  based labour force to be retrenched

Question 3

Quality expectations

Answer 3

• Quality + expectations cannot be separated as consumers expectations being met determines qual
• CE set the standards that (b) will attempt to meet
• QE of goods include: design, purpose, durability
• QE of services include: professionalism, reliability, level of customisation
• EXAMPLE: Tiffany & Co:
  company’s rep = based on its very high qual standards
  = known for the high qual of diamonds it sources + for its blend of conservative/ contemporary designs

Question 4

Cost-based Competition

Answer 4

• derived from determining break-even point → then applying strategies to create cost advs over competitors
• recognises prices cannot keep increasing → reduce costs instead to max profits when revenues are fixed
• Mass customisation → enables cost-based comp
  CB comp + op management
• focus on reducing costs while maintaining profit margins
• Fixed costs = do not change - Variable costs = vary
• A (b) can apply cost leadership to reduce both fixed + variable costs
  Strategies for CBC: SCM –> logistics, perf obj of cost = could improve efficiency + better compete w/ foreign (b)’s, global sourcing = enables lower input costs as
  (b) takes adv of low-cost producers

Question 5

Government Policies

Answer 5

• all (b)’s operate in a political-legal env
• affect (b) rules/ regulations → directly affect management of KBF’s
• Govt. policies change according to social exps (e.g. carbon pricing)
• Policies such as taxation rates, WHS, public health policies → impact (b) ops
• Since policies can inform law-making, ops managers need to be fully aware of the contemporary govt. policies + what they compromise

Question 6

Legal Regulations

Answer 6

• Compliance: range of laws w/ which a (b) must comply
• Compliance costs: expenses associated w/ meeting requirements of legal regulations
• Ops management: has particular laws that influence how practices + processes are conducted
• the relevant laws will relate to labour + labour management, env + public health: WHS, T&D, Fair Work + anti-discrimination laws, environmental protection

Question 7

Environmental Sustainability

Answer 7

• involves shaping processes in such a ways as to minimise harmful effects on env in future
  Main aspects:
• Renewable resources
• Reduction in use of non-renewable resources
• Ops management affected by rise in climate change awareness + need to integrate a long-term sustainable view of resource management into (b) planning + practice = need to implement processes that are eco-friendly = increase customer satisfaction + rep
• (b) increasingly trying to reduce carbon footprint
• e.g. Lush handmake products w/ env friendly sustainable inputs = increasing customer satisfaction + minimising effects on env

Question 8

Corporate Social Responsibility (why may be resistant) - this is to change but w/ more links to CSR (so use strategies resistance to change + these for CSR)

Answer 8

• increased costs e.g. costs of redundancy, purchasing new equip, retrenchment, also of renewable resources = sourcing ethically + implementing sustainable practices = costly
• (purchasing env friendly products + packaging e.g. biodegradable straws + cups) –> lessens ability to be a cost leader
• cost a (b) money, especially in short-run
• time-consuming = to find an ethical responsible supplier = (b) will need to find a new supplier for env friendly inputs = new packaging may lead to increase in price of g/s = possibly resulting in a decrease in sales = can lead to decrease sales if take too long = potential loss of customers
• (b) may decide not to pay these expenses in hope of achieving a higher profit

Question 9

CSR - difference between legal compliance and ethical responsibility

Answer 9

• legal comp = complying with the law e.g. in op = following WHS standards
• ethical responsibility = op decisions which are not only legally compliant but go beyond by taking extra measures deemed morally responsible
• helps (b) achieve positive rep = increase sales
• involves env sustainable practices
• Areas of compliance: labour laws, human rights - anti-discrimination, env + public health - regulations stopping dumping, pollution
• Can decrease compliance by outsourcing dif areas of operations e.g - manufacturing offshore (decrease labour law worries)
• e.g. Nike → unethical (sweatshops) → bad rep., decrease sales, profit
• e.g. Cadbury ER = association w/ Fair trade Association = ensure funds and some profits = allocated fairly to those in developing countries, where cocoa is sourced
• e.g. using env friendly practices e.g. reusable cups in cafe’s

Question 10

CSR - Environmental sustainability and Social Responsibility

Answer 10

• Eco growth should not occur w/ pollution, loss of forest, degrading air, water/ forest
• Balance b/w eco concerns + env concerns
• (B)’s need to be responsible for protection of env (e.g - decreased carbon output)
• principle of ecological sustainability requires (b)’s to evaluate full env effects of their ops
• a socially responsible (b) tries to achieve two goals simultaneously:
• expanding (b) + providing for greater good of society → need to have careful consideration
• Env sustainability + social responsibility = features of an ethical approach to ops management

Question 11

CSR - why key concern for op management

Answer 11

• goes beyond legal compliance for what is ethically + morally correct for community
• key concern = determine processes used –> ethically sourced, env friendly inputs - also key concern as: can increase costs = expensive
• requires (b) to shape processes as such to minimise env damage + waste
• e.g. if use outsourcing = not exploiting workers
• if do not adopt these practices = won’t have/ lose support of consumers = decrease sales
• (b) should avoid pollution, degrading air, water + farmland in its ops management
• (b) by supplying goods in an ecologically sustainable manner = fulfilling customer
  exps about them being a responsible (b)
  how (b) may benefit:
• Bad publicity from lack of respect for human rights or from low env standards = can result in loss of sales + profits
• acting in an ethical + socially responsible manner = avoid this risk
• A (b) that conducts its ops in an ethically responsible manner may also have a more motivated + productive workforce = will contribute to higher profits, as employee
  trust + commitment to (b) is higher