Influences (ops) Flashcards
Globalisation DEF
Refers to the removal of barriers of trade between nations. Characterised by increasing integration between national economies and a high degree of transfer of capital, labour, intellectual capital, financial resources and technology.
Globalisation COMP ADV/IMPLICATIONS
Access to global markets (procure to global markets)
Product design must meet the needs of global consumers
The choice of a location for manufacturing facilities, the quality management, logistics and inventory management processors are all orientated towards a global market.
The use of manufacturing plant for the production of goods means that business can achieve significant economies of scale (cost/unit)
Access to raw materials irrespective of the locations
ADV: 1.Access to cheaper and larger quantities and tech 2.access to low cost labour 3. Global manufacturing minimises time waiting for global consumers
DIS: 1. Possible increase in costs 2. Access to new tech may force companies to retrain staff 3. Standardize products
Globalisation IMPACTS
Affects organizational design and supply chain management (outsourcing)
Integration of the range of supplies creates a network called the global web
Outsourcing - can manufacture outside home country
Affects Tech - containers for the physical movement of the goods (speed and cost effective)
Technology (everything)
DEF: The design, construction, and or application of innovative devices and machinery upon operations processes
USES: Manufacturing process, creating services and accessing markets, manage inventory, manage quality
ADV: 1. Cost effectiveness (faster, less rely on labour, available 24/7) 2.Reduced waste 3. Increase precision
DIS: 1. Cost intensive to purchase robots 2. Staff redundancies 3. Redesign of operations structure/process
Quality expectations
DEF: features and characteristics of products and services that bears its ability to satisfy stated or implied needs.
Distinguishes between the quality of the goods and the services
Goods = design, functionality, materials, innovation, fit for purpose, durability
Services = professionalism, reliability, and level of customisation
ADV: 1. Improved quality due to comp 2. Dependability on the production process 3. Increase in customer satisfaction
DIS: 1. Increased costs in ensuring the quality 2. Speed may be reduced 3. Quantity produced may be reduced to focus
Quality expectations (goods and services)
QUALITY OF DESIGN: Quality of raw materials - inputs, innovative design, meet customer needs?
FITNESS FOR PURPOSE: Does what it’s designed to do, Easy to use
DURABILITY: Reliable/long lasting, easy to maintain/repair, after sales service?
Services:
PROFESSIONALISM OF THE SERVICE: Cleanliness/layout of the facility, courtesy of staff and attention to detail
RELIABILITY OF THE SERVICE PROVIDER: Efficiency of the service provided, level of competence
LEVEL OF CUSTOMISATION: How well the particular needs of the customer are met through the expertise and experience of the service provider.
Cost Based Comp
DEF: Derived from determining the breakeven point (where costs and revenue are =) and then applying strategies to gain an advantage over competitors.
HOW: RELIES ON - Efficiencies, waste minimisation, use of tech, automation in production
STRATS: Eliminate waste, produce standardised products for larger markets, Bulk buy items, achieve economies of scale, produce high volume of outputs, automated production systems.
ADV: 1. Little waste 2. Competitive advantage
DIS: 1. Reduced sales 2. Less quantity due to time lag
Government policies
DEF: Announce intentions by government as to future laws that impact BUS OPS
WHY: Methods used by governments that encourage operations function of a business to be more competitive or innovative
Can be political influences/agenda’s
Providing incentives to manufacture in Australia
Possible opportunity for monetary benefits for stating in Australia to manufacture
WH&S: Environmental regulations, consumer protection, employee regulation
ADV: 1. Good for brand reputation 2. Can avoid negative consequences 3. Re-invest increased funds
DIS: 1. Cost objective 2. Speed objective 3. Effects brand reputation possibly negatively
Legal regulation
DEF: Laws that are in place affect operations management.
NEGATIVE: Possible prosecution or penalty also increase in business cost
POSITIVE: Encourage a positive image for the media/public making the business more attractive to consumers.
EXAMPLES: 1. Fair work act 2009 (for employee entitlements and wages/conditions)
2. Competition and Consumer act (2010 environmental standards)
Environmental sustainability
Environmental Sustainability:
DEF: Business operations should be centered around practices that consume resources today without compromising access to those resources for future generations
HOW: - Reduce waste, recycle water, glass and paper - reduce the carbon footprint
POS: 1. Improved brand image 2. Greater sales as customers prioritising the environment will buy there
3. Able to reinvest the increase of profits into the BUS
NEG: 1. Costs involved 2. Less productive 3. Less output
CSR
WHAT: Refers to open and accountable BUS actions based on respect for people, community/society and the broader environment
WHY: Expectation that businesses do more than just the legal requirements (triple bottom line)
Placing value on financial returns as well as social responsibility
Businesses need to consider strategies that take into account profit and a range of community concerns and social expectations
CSR - Difference between Legal compliance and ethical responsibility:
ADV: Reputation, increase sales, room for more investment in BUS
DIS: Costs, Speed, smaller pool of suppliers
WHY: Penalties are in place for non-compliance or breach of the laws.
Legal Areas where operations management may be impacted:
WH&S (health and safety) Fair work act (wage pay etc) competition and consumer act and the corporations act.
Legal compliance = following the laws appropriately
Ethical responsibility = Taking further progress (BUS VALUES)
CSR is not mandated in AUS in legal regulations, rather ASX corporate Government Principles and Recommendations include a list for companies to report eco, social, sustainability risks
CSR - ENVIRONMENTAL SUSTAINABILITY:
WHAT: The expectation for businesses to be green and safe products. Businesses need to evaluate the operations effect on the environment.
HOW: Produce new and better sustainable products, adopt greenhouse reduction measures, reduce waste, safe materials in products
ADV: 1. Consumers are more inclined to buy 2. Increase customer satisfaction 3. Gaining trustworthy suppliers increases dependability
DIS: 1. Difficult to achieve speed 2. Hard to produce large quantity 3. Reduced pool of suppliers
CSR - SOCIAL RESPONSIBILITY OF A BUSINESS:
WHAT: The responsibility of an organization for the impacts of it’s decisions and activities on social and the environment, through transparent and ethical behaviour.
Sustainable development in health, wealthfare of society
Expectations of stakeholders taken into account
In compliance with the law and consistent with interactions norms of behaviour
Is integrated throughout the organization and practised in it’s relationships (sourcing agreements, supplier codes of conduct, audits)
ADV: 1. Consumers are more inclined to buy 2. Increase customer satisfaction 3. Gaining trustworthy suppliers increases dependability
DIS: 1. Difficult to achieve speed 2. Hard to produce large quantity 3. Reduced pool of suppliers
CSR - Measuring effectiveness
Trends of the business (improvement?, Enviro footprint? Audits? Child labour?) Reporting results on CSR practices to different stakeholders = Eliminate toxic substances, results of audits, better designed products ISO adherence (7 principles): Accountability, transparency, respect for stakeholder interests, respect for human rights, respect for international norms of behaviour.
