Operation Strategies Flashcards
Supply Chain Management (3)
Global Sourcing – Businesses can now purchase without location constraints to attain the right product for their operations or circumvent shortages.
E-Commerce – This is buying and selling online. Most businesses also manage their supply chains online.
Logistics – Transport of physical raw materials, input distribution and storage, warehousing, and distribution centers.
What is SCM
Supply chain management refers to controlling the flow of supplies through the whole operations process. It is vital that the businesses know the LEAD TIME.
Lead Time – the time it takes between the suppliers request for goods until their delivery to the customer.
Outsourcing
Outsourcing involves contracting out a non-core business activity. Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff.
Advantages and Disadvantages of Outsourcing
Access to specialist knowledge in different areas
More efficient production
Better technologies
Reliant on other businesses (Risk of failure)
Slower response to changes in the market
Redundant employees
Technology (3)
Leading Edge is the most advanced technology available at a given point in time. The rewards for successfully integrating it into business can be very significant, however, it also attracts high risks and costs (unforeseen bugs and uncertainty).
Established Technology is technology that has been proven to be effective, and is thus reliable and widely adopted.
(Sneaky Third Category) Bleeding Edge is a term given to those technologies that are used that are extremely new and high risk.
Inventory Management
Nearly all businesses have an inventory of raw materials, work-in-progress and finished goods, as well as information resources and customers.
Inventory Management (4)
Just In Case (JIC)
Just In Time (JIT)
First In First Out (FIFO)
Last In First Out (LIFO
Just In Case (JIC)
Also known as holding stock, this is a method that looks at holding excess stock in case it is needed
Advantage: it won’t run out
Disadvantage: may be left over with wasted products
Just In Time (JIT)
Holding the minimal stock possible and only producing the exact quantities to be delivered
Advantage: you won’t have excess stock just sitting around not being used
Disadvantage: could be affected by delivery times meaning the product could run out
First In Fist Out (FIFO)
Stock purchased first is sold fist. This is used for perishables products, and the remaining stock value is higher.
Advantage: not having out of date stock
Disadvantage: human intensive
Last In First Out (LIFO)
Stock purchased most recently is sold sifts. This is used for products with no use by date, and the remaining stock value is lower
Advantage: minimize expenses
Disadvantage: only with products that don’t expire.
Quality Management
This encompasses the business processes undertaken to ensure consistency, reliability, safety, and fitness of purpose of product.
Approaches to achieving Quality are:
Quality Control
Quality Assurance
Quality Improvement
Quality Control
Programmed inspections are carried out at key stages to ensure the process is meeting specified standards.
These are:
Feed forward control – before production e.g. inputs (INPUT)
Concurrent control – during production e.g. drinks filled to correct level (TRANS)
Feedback control – check of final product e.g. customer survey (OUTPUT)
Quality Assurance
Involves processes to prevent products from having problems, faults, errors.
For example, the use of approved or industry standards.
Quality Improvement
Involves consistent improvement of operations processes
More of a holistic approach, responsibility of everyone and involves all aspects of the business.
Overcoming resistance to change
There is a range of external factors which encourage, precipitate or even force necessary changes in a business operation. This can be difficult because there are significant restraints and restrictions to implementing change.
There are two categories:
Financial Restrictions : Cost of new equipment Redundancy costs Retraining costs Plant layout costs
Human Restrictions:
Inertia
Change of skill set
Global Factors
Global sourcing: involves sourcing lower cost inputs from other global regions. This can also be access to new technology or specialized labour skills.
Economies of scale: a cost advantage gained by producing larger output volumes, thus reducing per unit costs.
Scanning and learning: finding out and implementing ideas/products/services about operations overseas
Research and Development: implementing innovative strategies to create new products and improve existing ones. This improves product life cycles, opens new markets and improves quality while reducing costs.
Performance Objectives
Quality
Speed
Cost
Flexibility
Dependability
customization
How does logistics fit into operations?
transportation of goods // Transport of physical raw materials, input distribution and storage, warehousing and distribution centers.
