influences on operations management

Question 1

define globalisation

Answer 1

Globalisation:

• refers to the removal of barriers of trade between nations
• is characterised by an increasing integration between national economies and a high degree of transfer of capital (facilities and/or machinery), labour, intellectual capital and ideas, financial resources and technology

Question 2

GLOBALISATION

3 impacts on inputs?

Answer 2

— Using low cost nation’s manufacturing plants for production
□ dis: Less control over outputs; managers must ensure supply is reliable and of acceptable quality
□ Advantage: lower cost in operations through massive economies of scale advantages
□ Eg. Apple, has product designed in the United States, but manufactured in China for a global market.

— Cheaper labour overseas -> influences operations decisions on outsourcing-> either move factories overseas or outsource certain aspects of the process

— Operations management also has access to a larger market for resources -> influences decisions about production inputs

Question 3

GLOBALISATION

2 impacts on outputs?

Answer 3

— Outputs may need to be varied to suit different countries and their culture, language, safety regulations, government policies

– Operations may have to adapt to producing a greater variety of products or more customisation

Question 4

SUPPLY CHANGE MANAGEMENT (SCM) AND THE GLOBAL WEB

Answer 4

Supply chain: the range of suppliers a business has and the nature of its relationship with those suppliers
□ Must be predictable and reliable and highly responsive to changes in demand as experienced by the business

Global web: the network of suppliers a business has
□ chosen based on lowest overall cost, lowest risk and maximum certainty in quality and timing of supplies

Question 5

when is global web strategy used in supply chain management??

Answer 5

In SCM, the global web strategy is used when the business aims to minimise costs across the range of its suppliers
□ a business will opt for a location with appropriate proximity to its suppliers

• If a portion of suppliers are in one particular region, this may decide the location of the main operations processes -> less time wasted-> more efficient

Question 6

TECHNOLOGY

define

Answer 6

○ Technology: the design, construction and/or application of innovative devices, methods and machinery upon operations processes.

Question 7

list advantages of technology

Answer 7

○ enable people to communicate easily

○ New tech -> development of new production methods or equipment

Question 8

list advantages of technology

Answer 8

○ enable people to communicate easily (tech such as mobile phones, email, internet are the drivers of globalisation)
○ New tech -> development of new production methods or equipment

Question 9

what are factors to consider when choosing appropriate tech

Answer 9

• Speed of change taking place in that area of tech
  
  • What tech competitors are using
  • Finance available for change in tech (+if it has high initial costs will it be worth it?)
  • How long it takes to introduce the tech
  • Will staff need to be retrained/ made redundant
    ○ This can be costly
    ○ Staff can be resistant

Question 10

main adv of communications tech

Answer 10

• the ease in transferring information around in terms of the savings in both time and money –> information can be transferred across the world, via the internet, instantly.

Question 11

TECHNOLOGY

2 impacts on inputs?

Answer 11

• manufacturing technology eg. machinery-> integration of this into operations -> improves efficiency
• Technology can replace inputs such as humans to reduce costs (increased automation/ AI -> reduce costs (despite high initial costs), save time and reduce wastes-> more efficient and more profitable business

Question 12

TECHNOLOGY

impacts on outputs?

Answer 12

• Advanced tech-> increase efficiency-> make more products in shorter time than before

Question 13

QUALITY EXPECTATIONS

define

Answer 13

• refers to business and consumer expectations regarding the product’s performance in a range of attributes

Quality: a specific reference to how well designed, made and functional goods are, and the overall degree of competence with which services are organised and delivered

Question 14

how does quality expectations determine the business operations

Answer 14

expectations that customers have of businesses determine the way that products are designed, created and delivered to customers -> operations processes must follow particular standards or prescribed minimum levels of excellence

Some businesses and customers have low expectations in quality, hence, relying on low prices to make profits (cost leadership approach)

Some firms have high quality expectations, as they rely on their reputation for high quality to be competitive (good/service differentiation

Question 15

3 quality expectations with goods?

Answer 15

durability, (is it reliable and long lasting, can it be easily repaired, are after sales services efficient)
fitness for purpose (does it do the job, easy to use?)
quality of design (any innovation, what materials )

Question 16

3 quality expectations with services?

Answer 16

level of customisation
reliability of the service provider (overall levels of competence)
professionalism of the service provider (cleanliness and layout of physical facilites, staff dialogue and interactions)

Question 17

COST BASED COMPETITION