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HSC Business > Operations > Flashcards

Operations Flashcards

1
Q

Role Of Operations Management

A

monitoring of business’s practices to create the highest level of efficiency possible

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2
Q

Strategic Role Of Operations

A

long-term plans and decisions that aim to achieve cost-leadership & product differentiation

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3
Q

Cost Leadership

A

when a business aims to achieve the lowest production costs in the industry.

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4
Q

Ways to achieve Cost Leadership

A
  • Economies of scale
  • New & innovative products
  • Cheaper & exclusive raw material
  • Outsourcing (focus on core functions)
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5
Q

Product Differentiation (goods & services)

A

when a business distinguishes it’s products or services from it’s competitors, to make it more attractive to a particular target market

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6
Q

Ways to achieve Product Differentiation

A
  • Increased quality (good)
  • Faster delivery (good)
  • Custom design products (good)
  • Innovative design (good)
  • New technology (good/service)
  • More features/services (good/service)
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7
Q

Discuss the balance between cost and quality in operations strategy

A

↓ costs = ↓ quality
↑ costs = ↑ quality

∴ Businesses must balance between costs & quality to maximise profits

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8
Q

Describe the features of operations management for businesses in a tertiary industry

A

➢ Tertiary industries produce services rather than tangible goods

➢ Key considerations when producing services are:

  • Quality of customer service
  • Whether to standardise or customise the service
  • The level of visibility (customer contact) with the operation processes
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9
Q

Influences On Operations

A

factors that impact the operation process of a business, causing it to undergo change

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10
Q

Globalisation

A

removal of trade barriers to integrate different economies into a single market where goods & services can be traded easily

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11
Q

Advantages & Disadvantages Of Globalisation

A

Advantages:

  • Sourcing cheaper inputs from overseas
  • Expanding to sell into foreign markets
  • Access to funds, technology, and skills

Disadvantages:

  • Foreign competition
  • Ethical & logistical issues with foreign suppliers
  • Potential expenses (eg. tariffs, shipping, etc)
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12
Q

Cost-based Competition

A

derived from determining break-even point (revenue = costs) and applying cost leadership strategies to create cost advantages over competitors

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13
Q

Technology

A

use of machinery throughout the production processes to accomplish objectives

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14
Q

Advantages & Disadvantages Of Technology

A

Advantages:

  • Continuous productivity
  • Less errors
  • Greater efficiency & precision

Disadvantages:

  • Expensive & costly maintenance
  • Employees require new skills
  • employees are made redundant
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15
Q

Quality Expectations

A

process of producing high quality products to meet customer standards (consumers will expect certain level of quality based on the brand & price)

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16
Q

Advantage & Disadvantage Of Quality Expectations

A

Advantage:

  • Establishes customer loyalty ➭ repeat sales

Disadvantage:

  • Increased costs, time, and effort in production process
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17
Q

Government Policies

A

broad goals of the government that encourage safe & competitive behaviour by businesses to guarantee economic performance & growth

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18
Q

Examples Of Government Policies

A
  • Tax Policy ➭ encourages business to conduct tax deductible practices (e.g. R & D)
  • Health Policy ➭ maintain hygiene standards (e.g. correct food storage)
  • Environmental Policy ➭ may incur higher costs for environmentally friendly inputs
  • Labour Policy ➭ conducting business activities based on respecting the ‘Human & Labour Rights’
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19
Q

Legal Regulations

A

specific laws that businesses have to follow to promote safe & fair practices by the businesses

↳ breaking the rules can result in penalties (e.g. fines)

↳ However, following the rules can result in compliance costs (expenses associated with meeting the requirements of legal regulations)

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20
Q

Examples Of Legal Regulations

A
  • Zoning ➭ affects the location of every type of business , especially critical to home businesses
  • Fair Work & Anti-Discrimination ➭ requires that employees be treated with dignity & respect
  • Work Health & Safety ➭ ensures that employees receive safety training, protective equipment, and appropriate machinery
  • Environmental Protection (e.g. dumping) ➭ minimising pollution, elimination and safety disposing of any toxic residue
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21
Q

Corporate Social Responsibility

A

refers to businesses going above the law in consideration of the community and the environment

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22
Q

Corporate Social Responsibility:

Environmental Sustainability

A

when business operations do not compromise access to those resources for future generations

  • Reducing greenhouse gas emissions
  • Reducing water wastage
  • Using sustainable & recycled inputs
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23
Q

Corporate Social Responsibility:

Ethical Responsibility

A

when a business’s operations improve the quality of life of it’s internal & external stakeholders

  • Fair treatment of employees ( includes those overseas)
  • Workplace diversity
  • Requirements on the ethics of suppliers
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24
Q

Advantages & Disadvantages Of CSR

A

Advantages:

  • Differentiates products
  • Builds customer loyalty
  • Attracts staff

Disadvantages:

  • More costly to conduct responsible operations practices
  • Time consuming
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25
Q

Legal Compliance vs. Corporate Social Responsibility

A

Legal Compliance involves making sure that the laws and regulations relating to the operations of a business are strictly observed. However, CSR are open & accountable business actions based on respect for people, the community, and the broader environment, thus going beyond what is legally required of the business.

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26
Q

Explain why CSR is a key concern in operations management

A

↑ CSR = ↑ reputation = ↑ sales

↓ CSR = ↓ reputation = ↓ sales (if not necessity)

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27
Q

Operations Process

A

involves integrating and managing the flow of supplies throughout the production process in order to best meet the needs of customers

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28
Q

Inputs:

Transformed Resources

A

inputs which change or are converted into something else

↳ Materials ➭ raw materials (unchanged) and intermediate goods (contribute to the finished product)

↳ Info ➭ when it’s used to inform how inputs are used, where they’re drawn from, etc

↳ Customers ➭ their needs drive the business’s operations

29
Q

Inputs:

Transforming Resources

A

inputs that remain in the business, being applied to the inputs to add to its value

↳ H.R. ➭ are the people with skills & knowledge required for operational function

↳ Facilities ➭ includes buildings, land, equipment, and technology

30
Q

Transformation Process:

Influences (4 Vs)

A

Volume: the quantity of goods & services provided by operations.

Variety: the number of different models or versions offered.

Variation: the change in the demand for the product over time.

Visibility: the level of customer contact or feedback during the production processes.

31
Q

Transformation Process:

Sequencing & Scheduling

A

Sequencing: refers to the order in which activities in the operations process occurs.

Scheduling: refers to the length of time activities take within the operations process.

  • Assists in time management
  • Sets out clear operations goals
  • Allows for monitoring of tasks
  • Avoids delays & increases efficiency
32
Q

Transformation Process:

Sequencing & Scheduling (Gantt Chart)

A

a bar chart that records tasks required for each project and the estimated time required for each

Advantage:

  • Monitors actual progress against planned activities

Disadvantage:

  • Doesn’t indicate which tasks are dependent on each other
33
Q

Transformation Process:

Sequencing & Scheduling (Critical Path Diagram)

A

a diagram that shows the shortest time to complete all tasks

Advantage:

  • Shows which tasks can be performed simultaneously
  • Can become crowded for complex tasks
34
Q

Transformation Process:

Teachnology

A

use of machinery throughout the production processes to accomplish objectives

↳ Computer Aided Design (CAD) ➭ the use of computers to aid in the creation, modification, analysis, or optimisation of a design

↳ Computer Aided Manufacturing (CAM) ➭ the use of computer software & automatable machinery to create products with a high degree of accuracy & precision

35
Q

Transformation Process:

Task Design

A

involves the categorization & clarification of jobs in a way which makes it easy for an employee to complete them productively

↳ Steps ➭ task design → job description → person specification → recruitment → selection

↳ Skills Audit ➭ used to determine the present level of skills and any skill shortfalls that are made up through recruitment & training

36
Q

Transformation Process:

Workplace Layout

A

refers to the different ways to organise the physical layout of the workplace

↳ Product Layout ➭ the arrangement of utilities according to their contributions throughout the operations processes

↳ Process Layout ➭ the arrangement of utilities according to their functions

↳ Fixed Position Layout ➭ an operational arrangement, in which utilities & employees come to the product (bulky products)

↳ Office Layout: systematic arrangement of office utilities to maximise the benefit of the space available

37
Q

Transformation Process:

Monitoring

A

the process of measuring actual performance against planned performance

↳ Key Performance Indicators ➭ are predetermined variables that are measured so that appropriate controls to operations processes can be made (e.g. lead times, defects)

38
Q

Transformation Process:

Control

A

occurs when KPIs are assessed against predetermined targets and corrective action is taken (e.g. redesign layout, new technology)

39
Q

Transformation Process:

Improvement

A

refers to systematic reduction of inefficiencies/wastage and the elimination of any bottlenecks, by setting higher and higher standards in the continual pursuit of improvement

↳ Bottlenecks ➭ an aspect of the transformation process that slows down the overall processing speed of the dependant production processes

40
Q

Output:

Customer Service

A

refers to how well a business meets and exceeds the expectations of customers in all aspects of its operations

↳ Explicit Service ➭ delivering a product and telling the customer about the product

↳ Implicit Service ➭ level of care and help offered to the customer as well

41
Q

Output:

Warranty

A

a promise made by a business that they will correct any defects in the goods they produce or services they deliver

42
Q

Operations Strategies

A

strategies implemented by the business to improve the production process, thus achieving the strategic role of operations

43
Q

Technology

A

Leading Edge ➭ the most advanced technology available at a given point in time (e.g. 3D printing, nanotechnology, etc)

Established ➭ technology that has been proven to be effective, and thus reliable & widely adopted (e.g. computer, phone, etc)

44
Q

Advantages of Leading Edge & Established Technology

A

Advantages of Leading Edge:

  • Increases efficiency
  • Less waste

Advantages of Established technology:

  • Safe & reliable
  • Competitive = ↓ product differentiation
45
Q

Quality Management

A

Quality Control ➭ involves conducting various inspections during the production processes to reduce problems & defects in the product.

Quality Assurance ➭ involves processes to prevent products from having any defects.

Quality Improvement ➭ involves consistent improvement of operations processes through innovation or gradually over time.

46
Q

Overcoming Resistance To Change

A
  1. Cost of Equipment
  2. Redundancy Payments
  3. Retraining
  4. Re-organisation Layout
  5. Inertia

Change Agents ➭ the business should identify an individual/group who are influential in the business to act as a catalyst to help manage the change process.

‘Unfreeze → Change → Refreeze’ ➭ is Kurt Lewin’s method of preparing employees for change, making changes , and finally integrating & normalising those changes within the organisation.

47
Q

New Product Design & Development

A 
Market research and product concept development
                                      ↓
Product design and prototype development
                                      ↓
Prototype testing and assessment
                                      ↓
Product refinement and production processes refined
                                      ↓
Production and product launch
48
Q

Advantages & Disadvantages of NPDD

A

Advantages:

  • Differentiation
  • Adapt to changing preferences

Disadvantages:

  • Expensive
  • May be Unsuccessful
49
Q

Outsourcing

A

involves contracting out another business to carry out it’s activities

50
Q

Advantages & Disadvantages of Outsourcing

A

Advantages:

  • More efficient production → cost saving
  • Access to better technologies & skills
  • Focus on core activities
  • Accountability → set standards

Disadvantages:

  • Reliant on other businesses → loss of control
  • Slower response to change → longer production process
  • Redundant employees
  • Ethical issues (e.g. treatment of staff)
51
Q

Supply Chain Management:

Global Sourcing

A

involves sourcing lower cost inputs from other global regions

52
Q

Supply Chain Management:

Global Sourcing (Adv. & Dis.)

A

Advantages (↑cost advantages):

  • Access to new technology & skills
  • More efficient production

Disadvantages (↑ cost of logistics):

  • Different regulations between nations
  • Complex organisation
53
Q

Supply Chain Management:

E-commerce

A

involves the buying/selling of goods & services through the internet

↳ E-procurement ➭ the use of online systems that automatically notifies suppliers to deliver goods, when stock falls to a predetermined point.

↳ B2B ➭ business to business

↳ B2C ➭ business to consumer

54
Q

Supply Chain Management:

Logistics

A

the overall process of managing how resources are acquired, stored, and transported to their final destination

↳ Distribution
↳ Transportation
↳ Storage
↳ Warehousing
↳ Distribution Centres
↳ Material Handling & Packaging
55
Q

Inventory Management

A

↳ Holding Stock ➭ refers to the partially/fully processed products that a business has at a particular point in time.

↳ Just In Time (JIT) ➭ holding the minimal stock possible, and only producing the exact quantities to be delivered.

↳ First In First Out (FIFO) ➭ stock purchased first is sold first (e.g. perishable goods).

↳ Last In First Out (LIFO) ➭ stock purchased most recently is sold first (non-perishable goods)

56
Q

Advantages of Holding Stock & JIT

A

Advantages of Holding Stock:

  • Able to better meet customer demand
  • Reduces lead times
  • Avoids ‘loss sale’ (offers alternative options during shortage)
  • Bulk buying/producing → economies of scale

Advantages of JIT:

  • Reduces storage costs
  • Avoids spoilage/damage
  • Ensures product is not obsolete (outdated)
  • Improves cash flow → efficient allocation of resources
57
Q

Effects of FIFO & LIFO

A

Effects of FIFO:

  • FIFO Understates COGS, Overstates Profits, and Overvalues Stock (FOCOPOS)
  • High profits are shown, attracting investors

Effects of LIFO:

  • LIFO Understates COGS, Underestimates profits, and Understates Stock (LOCUSUP)
  • Less profits are shown, allowing for lower tax
58
Q

Global Factors:

Global Sourcing

A

involves sourcing lower cost inputs from other global regions

59
Q

Global Sourcing:

Economies Of Scale

A

the increase in the scale of production to reduce the cost per unit

60
Q

Global Factors:

Scanning & Learning

A

business can benefit from scanning the global environment and learning from the best practices of businesses around the world

↳ This allows for businesses to explore the perspective of their competitors, as well as accumulate learning of the brand new business opportunities, operation models, and technologies.

61
Q

Global Factors:

Research & Development

A

involves implementing innovative strategies to create new products or improve existing ones

↳ The government encourages R&D by offering taxation incentives and grants.

↳ Investing into R&D aims to extend product life cycles, open new markets, and improve quality, while reducing costs

62
Q

Performance Objectives:

Quality

A

relates to the physical good/service provided to the customers, and how it meets their expectations

63
Q

Performance Objectives:

Speed

A

relates to the efficiency of production, and the time taken for the production & operation processes to respond to changes in the market demand

64
Q

Performance Objectives:

Dependability

A

relates to the reliability & consistency of the good/service, and how well it fulfills it’s purpose

65
Q

Performance Objectives:

Flexibility

A

relates to how easily/quickly operations can switch to a new model/design to meet market changes

66
Q

Performance Objectives

Customisation

A

refers to the creation of individualised products to meet the specific needs of the customers

67
Q

Performance Objectives:

Cost

A

refers to the minimisation of expenses so that the operation processes are conducted as cheaply as possible

68
Q

Performance Objectives:

Quality vs. Dependability

A

quality is how well a product is able to perform its functions properly, whilst dependability is how well the product is able to perform its functions consistently over time and through various conditions

HSC Business (4 decks)

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