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Operations Flashcards

1
Q

The Strategic Role of Operations

A

The holistic and overarching contribution of the transformation process to the achievement of operational objectives in the short term. This involves the achievement of cost leadership and product service differentiation in the pursuit of creating a positive competitive advantage by producing products at the lowest cost and that appeal to customers relative to their competitors to maximise profitability in the long term.

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2
Q

Operational objectives

Cost

A

minimisation of COGs and other expenses to achieve Cost Leadership

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3
Q

operational objectives

measures of cost

A
  • Profitability ratio analysis
  • variation in input costs
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4
Q

operational objectives

Quality

A

Product matching what it is designed to do/expected by customers which includes quality of design, conformance, and service

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5
Q

operational objectives

measures of quality

A
  • customer feedback satisfaction indexes
  • warranty claims/returns
  • defect rates
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6
Q

operational objectives

Speed

A

time taken to respond to produce output to meet demand

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7
Q

operational objectives

measures of speed

A
  • wait times
  • lead times
  • process times
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8
Q

operational objectives

flexibility

A

how quickly processes react to changes in market

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9
Q

operational objectives

measures of flexibility

A
  • variations in speed during peak/not peak times
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10
Q

operational objectives

dependability

A

how constistent/reliable a business’ products are

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11
Q

operational objectives

measures of dependability

A
  • warranty claims/returns
  • waste
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12
Q

operational objectives

Customisation

A

Ability of a business to produce individualised products to meet specific needs

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13
Q

operational objectives

measures of customisation

A
  • Product breadth/depth
  • volume of products produced
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14
Q

Goods and services in different industries

Product

A

good or service

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15
Q

Goods and services in different industries

Good

A

tangible aspect of good

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16
Q

Goods and services in different industries

Service

A

intangible aspect of service

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17
Q

Goods and services in different industries

Goods-based business

A

Business that predominantly sells goods

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18
Q

Goods and services in different industries

Service-based business

A

Business that predominantly provides a service

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19
Q

Interdependence with other KBFs

Interdependence

A

Interdependence refers to the mutal dependance/effect that the KBFs have on one another. Each KBF depends on the others to perform at capacity. This is a two way relationship:
1. contribution ops makes to other KBFs to achieve goals
2. reliance of ops on other KBFs to achieve goals

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20
Q

Interdependence with other KBFs

How operations supports finance

A

Operations contributes to the achievement of profit maximisation, wealth creation and financial stability by:
1. Producing high value added, differentiated and cost-effective products for sale to customers.
2. Meeting the needs and wants of customers, sales generate sales.
3. Sales revenue (equity) is required by finances to carry out their role

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21
Q

Interdependence with other KBFs

How operations supports marketing

A

Operations is responsible for producing a product that meets a design brief and that is desired by the consumer and seen to have ‘value’.
* In short, operations produces the best product they can at the lowest cost, marketing entices consumers to purchase that product at the highest possible price.
* The higher the quality, the more successful a marketing campaign
* ops is primarily responsible for managing the costs of production which is crucial to determining the final sale prices of products and profitability

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22
Q

Interdependence with other KBFs

How operations supports HR

A

Operations is responsible for producing a product that is marketable in meeting customers expectations AND is done so at the lowest costs.
* operations process needs to add the most value to inputs throughout the transformation process in the most cost-effective manner possible.

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23
Q

Interdependence with other KBFs

How finance supports operations

A

Finance supports the transformation process by allocating financial capital to:
* The purchase of stock, making payments,
* sourcing debt and equity funding for machinery purchase, improve productivity
* Finances R&D into new product/service design

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24
Q

Interdependence with other KBFs

How marketing contributes to operations

A
  • Market research discovers what products are demanded by consumers. The results are fed back into the operations process as an input (information and consumers)
  • effectively shapes the design and production of the products.
  • tangible and intangible elements of the product are determined by marketing, but contribute to the overall finished product.
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25
Q

Interdependence with other KBFs

How HR contributes to operations

A

???

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26
Q

Inputs

Transformed resources

A

resources that are treated, transformed, or converted in the operations process, includes:
* materials
* info: internal and external
* customers

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27
Q

Inputs

Materials

A

Basic elements used in the production process which includes:
* raw materials: unprocessed
* intermediate goods: manufactured and used further

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28
Q

Inputs

Information

A

Knowledge gained from research, investigation, and instruction to increase understanding of the market:
* external info: from trade organisations, competition
* internal info: financial statements

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29
Q

Inputs

Customers

A

Can be transformed resources when their choices shape inputs and the transformation.
Goal of ops is that product meets consumer demand.

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30
Q

Inputs: case study

MCDs transformed resources

A

Materials: beef, chicken, lettuce, onions
Info: sales data (in), shift in consumer taste (ext)
Customers: consumer preferences spurred MFY, app

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31
Q

inputs

Transforming resources

A

Inputs that carry out the transformation processes, includes:
* HR
* facilities

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32
Q

Inputs

human resources

A

the human capital inputs into a business eg. workers
The greatest asset to business as they appreciate and have valuable capacities

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33
Q

Inputs

Facilities

A

the plant (factory/office) and machinery used in the operations processes. They assist people to convert inputs.

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34
Q

Inputs: case study

MCDs transforming resources

A

HR: crew members, store managers, cooking and assembly
Facilities: resturants, drink machine, rostering software

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35
Q

The transformation process: 4Vs

Volume

A

how much of a prodcut is made. Businesses aim to ahcieve volume flexibility which refers to how quickly a business can adjust to varying demand, helps to reduce lead times.
Indicators are speed and flexibility.

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36
Q

The transformation process: 4Vs

Variety

A

mix of products/services. Mix flexibility is AKA producy rang e and variety.
Marketing is responsible for determining the mix, but ops is responsible for their production. The greater the variety, the greater the ops process will need to allow for the variaition.

37
Q

The transformation process: 4Vs

Variation in demand

A

how the transformation processes react/respond during periods of variation in demand.
Management must forecast, plan, and react.

38
Q

The transformation process: 4Vs

visibility

A

the contact businesss has with its customers in the ops process, shapes what the business makes and how they make it, ensures that customer perception of product are met. It can be:
* direct: surveys, interviews, warranty claims, letters
* indirect: review of sales & market share data, observations

39
Q

The transformation process: 4Vs

4Vs at MCDs

A

Volume: MCDs is a high volume seller
Variety: In 2001 had 20 items, since 2007 they have had 70% increase in variety of products
Variation in demand: challenges inc. ability of supply chain to produce massive volume, daily variations, being able to product dependable/quality products in time frame
Visibility: MCDs values direct contact through app, kiosk, online surveys, unscripted POS dialogue, in 2004 they shifted from production oriented to consumer oriented

40
Q

Transformation process: sequencing and scheduling

Sequencing

A

order in which activities in the operations process occur. This allows for the efficient ordering of activities in the operations process.

41
Q

Transformation process: sequencing and scheduling

Scheduling

A

the length of time activities take within the operations process. This allows for sufficient time to complete all activities.

42
Q

Transformation process: sequencing and scheduling

How sequencing and scheduling can be improved

A
  • monitoring actual vs planned production times
  • streamline processes and procedures to maximise efficiency and productivity
  • improve technology in the production process

This would lead to an improvement of all ops objectives.

43
Q

Transformation process: sequencing and scheduling

Gantt Chart as a tool

A

It records the number of tasks involved in each particular project and the estimated time needs for each task, but will not show the relationship between tasks.
* shown as bar chart
* forces planning of steps and time allocation
* actual vs planned
* graphical illustration of schedule

44
Q

Transformation process: sequencing and scheduling

Critical Path Analysis as tool

A

widely-used project management tool that uses network analysis to help project managers to handle complex and time-sensitive operations. The critical path is the shortest time taken to complete all tasks
* shows what tasks need to be done, how long they take, order
* flow diagram that shows interrelationship of tasks

45
Q

Transformation process: sequencing and scheduling

Critical Path Analysis pros and cons

A

Advantages:
* decision-making tool
* provides managers with overvieew
* can support other aspects of business planning

Disadvantages:
* relies on assumption
* doesn’t guarantee success of a project

46
Q

transformation process: tech, task design, product and process layout

Why businesses update tech

A
  • maintain competitive
  • increase productivity
  • reduce cost of production (CL)
  • creates point of differentiation (PSD)
  • gains competitive advantage (profitability)
47
Q

transformation process: tech, task design, product and process layout

types of tech used in production

A
  • Robotics
  • Computer Aided Design (CAD)
  • Computer Aided Manufacturing (CAM(
48
Q

transformation process: tech, task design, product and process layout

tech: robotics

A

Highly specialised, programmable machinery that is capable of completing several different tasks without human input.
eg. 3D printer, reduces human error (dependability)

49
Q

transformation process: tech, task design, product and process layout

tech: CAD

A

computerised design tool that allows business to create product possibilities from a series of input perameters, quality assurance as it reduces human error.

50
Q

transformation process: tech, task design, product and process layout

CAM

A

software that controls manufacturing
eg. AI, MyMaccas App

51
Q

transformation process: tech, task design, product and process layout

How tech impacts the operations process

A
  • volume orders
  • speed
  • customisation
  • revenue
  • efficiency
  • flexibility
52
Q

transformation process: tech, task design, product and process layout

Tech used by MCDs

A
  • kiosk (robotics)
  • MyMaccas App (CAM)
  • menu
  • pay by tapping phone
  • grillers
  • food warmers
53
Q

transformation process: tech, task design, product and process layout

Technology and task design at MCDs

A

The MFY system is reliant on technology:
* 11 sec toasters
* 22 sec double-sided grillers
* food warmers
* software that delivers orders to either side of kitchen to minimise wait times
Consistency in the supply chain is very important to MCDs processes within the resturant (OSI Foods)

54
Q

transformation process: tech, task design, product and process layout

Financing tech

A

The capital cost of tech is high due to initial outlay, maintenance, and updates. It can either be purchased outright using financial capital or leased.

55
Q

transformation process: tech, task design, product and process layout

Financing tech at MCDs

A

MCDs organises the leases of required equipment from its leasing partner CookQuip. They source all equipment requirements for MCDs stores worldwide. Their licensees are required to pay these lease payments directely to MCDs.

56
Q

transformation process: tech, task design, product and process layout

Task design

A

breaking down the operations process into individual tasks to be completed. It involves:
* job description
* job specification
* job analysis

57
Q

transformation process: tech, task design, product and process layout

Task design: job description

A
  • job title
  • working hours
  • duties and responsibilities
  • working conditions
  • salary incentives
  • machinery to be handled
58
Q

transformation process: tech, task design, product and process layout

Task design: job specification

A
  • qualifications
  • qualities
  • training and development
  • interpersonal skills
59
Q

transformation process: tech, task design, product and process layout

Task design: job analysis

A

process of determining and identifying the content of a job in terms of duties, number of tasks and responsibilities, skills/knowledge required

60
Q

transformation process: tech, task design, product and process layout

Product (plant) layout

A

the arrangement and set out of equipment that supports the sequence of tasks performed in manufacturing the product.

61
Q

transformation process: tech, task design, product and process layout

Process layout

A

arrangement of machines and equipment that are grouped together by the process they perform.

62
Q

transformation process: tech, task design, product and process layout

Resturant layout at MCDs

A

They have redesigned their resturants to improve workflow:
* no manager office
* increased seating area and density
* decreased customer service area
* one main production line in kitchen
* added McCafe and kiosks
* Drive-thu beverage window added
* increased storage room
* walls reduce customer visibility

63
Q

transformation process: tech, task design, product and process layout

process and product layout at MCDs

A

Process: the grouping of the griller and frier together as they both cook

Product: Having the condiments at the end of the kitchen as they are the last part of the assembled meal

64
Q

Transformation process: outputs, customer service, warranties

Outputs of a business

A

Intangible service warranty and tangible goods

65
Q

Transformation process: outputs, customer service, warranties

Outputs: Components of intangible service warranty

A

Service: intangible product/component of a product typically provided by employees of an organisation

Warranty: guarentee that a manufacturer/similar party makes regarding the conditions of its products, includes the terms when repairs will be made (CCA 2010)

66
Q

Transformation process: outputs, customer service, warranties

Outputs: components of tangible goods

A

semi-finished/intermediate goods: any partially finished goods that are used in the production of finished goods

Finished goods: goods that have been completed during the manufacturing process for the purpose of being sold to consumers/businesses

67
Q

Transformation process: outputs, customer service, warranties

Customer service

A

intangible output that requires extensive contact with customers
* often source of CA
* provided before, during, after purchase
* tech changes how services are delivered

68
Q

Transformation process: outputs, customer service, warranties

Customer service process

A
  1. customer info informs production process
  2. Customer Relationship Managment (CRM)
  3. gathering, interpreting, analysing data
  4. Produce product to consumer wants and needs
  5. customer service
69
Q

Transformation process: outputs, customer service, warranties

Customer service at MCDs

A
  • reminders on MyMaccas App
  • delivery
  • table service
  • 24/7 (accessibility)
70
Q

Transformation process: outputs, customer service, warranties

warranty

A

an assurance that a business stands by the quality claims of the product they provide to the market, which becomes a right under ACL.

71
Q

Transformation process: outputs, customer service, warranties

warranty claims

A

defects caused by the transformation process that help to identify issues in the transformation process or with inputs.

72
Q

Transformation process: outputs, customer service, warranties

Warranties: businesses must make sure that they products they sell…

A
  • high level of quality comparable to price and description
  • suitable for purpose/job
  • match description in advertising/promoting
  • free from defects/faults
    These make up statute/implied warranty that gives consumers legal production under ACL and the CCA 2010.
73
Q

Transformation process: outputs, customer service, warranties

Common warranties

A

when a business makes extra promises/representations generally about the standard of a good. They may refer to:
* quality, state, condition, performance, characteristics of good
* what the good can do and for how long
* availability of servicing, supply of parts/identical goods

74
Q

Transformation process: outputs, customer service, warranties

Warranty against defects AKA manufacturers warranty

A

if defective, business will repair/replace goods (part of them), resupply/fix a problem with the services, provide compensation.
They are usually limited by time, doesn’t need to be a formal document, and doesn’t replace consumer guarantees.

75
Q

Transformation process: outputs, customer service, warranties

Customer service at MCDs

A

reallocation of HR from counter service to out back due to demanded increase in customer service.

76
Q

MCDs move from Made in Advance to MFY

A

Made in Advance had structural limitations and was in need of change:
* grillers were single-sided, now double-sided and automated (22 secs)
* toasters were 60 secs, now 11 secs
* had no production softwar, added software based on AI

77
Q

operations influence

Government policy

A

Methods used by government that encourage/incentivise businesses to behave in ways to achieve desired outcomes.
* allows for business to get ahead of government policy which contributes to meeting consumer needs and CSR
* find new efficient ways to run business
Process: can influence how business conducts its ops process (inputs)
objectives: cost and dependability

78
Q

operations influence

Government policy in MCDs

A

Changes to the Fair Work Act 2010 to include the Workers Security Package
* had to introduce rostering software that is more efficient to avoid giving part time contracts
* makes process dependable and keeps cost low

79
Q

operations influence

Globalisation

A

process by which the world is becoming increasingly interconnected as a result of increased trade and cultural exchange. It is a source of market opportunities for a business, but may also introduced increased competition. It allows access to low cost suppliers, higher quality inputs and more of them.
Process: inputs
Obj: cost and quality

80
Q

operations influence

Globalisation at MCDs

A

MCDs is supplied by OSI Foods Global for raw materials inc beef, luttuce, chicken, onions ect. They use hedging to lock down the cost of their inputs so they don’t fluctuate with global economy.

81
Q

operations influence

Cost-based competition

A

derived from determining the breakeven point and then applying strategies to create cost advantages over competitors. It encourages improvement, cost minimisation, and productivity in business.
Process: inputs (transforming)
obj: cost and quality

82
Q

operations influence

cost-based competition at MCDs

A

Main competitor is Yum Brands however as MCDs has expanded their menu, they found themselves competing with a greater variety of competitors. To deal with this, they have improved the facilities (resutrants, cookers, drink machines).

83
Q

operations influence

quality expectations

A

Quality is the ability of a product/service to meet a customer’s expecations for that product/service. This expecation can fluctuate over time.
Process: inputs (transformed)
obj: quality and dependability

84
Q

operations influence

quality expectations at MCDs

A

In 2011, MCDs was reported by The Australian as admitting that its coffee didn’t meet the standard of Aussie customers. They re-launched the coffee blend, introduced new coffee machines, and improved barista training.

85
Q

operations influence

technology

A

the application of inovations in design, construction and equipment for practice purposes. This can result in a cost reduction (EOS), and producitivity improvements (leader, CA).
process: variation in demand
obj: cost and speed

86
Q

operations influence

technology at MCDs

A

The MCDs AI calculator of how much supplier each store needs and what is to be produced before it is ordered:
* reduces cost associate with wastage
* recieve an average of 2.5 deliveries per store
* no need to do stock take
* orders met faster

87
Q

operations influence

Legal regulation

A

all businesses must comply with laws and regulations. These often stem from govt policies which set down a broad direction for the behaviours they wish to be legislated. The costs associated with meeting these requirements is known as ‘compliance costs’. Benefits:
* avoid additional cost/expense
* minimise disruption to processes
* autonomy over business decisions
* improved quality of output
* positive brand image
Process: warranty
Obj: cost and dependability

88
Q

operations influence

Legal regulation at MCDs

A

MCDs has to be compliant with local, state, and federal laws in Aus. For them to be compliant with the Workplaces Health and Safety Act 2011 (NSW) and the NSW Food Authority, a meat patty will go through 52 checks before it arrives at a MCDs resturant. By going beyond what is legally required, MCDs is highly flexible to changing laws, prevents the use of returns policy.

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