Operations Flashcards
What is value adding
creation of extra or added value as inputs are transformed into outputs
What is the transformation process
conversion of INPUTS into OUTPUTS
what is operations interdependence with other key business functions?
Operations employs human resources in the making of the product used by marketing which is funded by finance
What are inputs?
inputs include raw materials, land, labour, resources, machinery, technology, ideas, information which all lead to outputs
Outline the strategic role of operations management
Involves contributing to the strategic direction of the business. Main business goal is to maximise profits. Operations can contribute to this by providing products/services in the most COST EFFICIENT manner. By reducing costs and maximising sales… profits INCREASE
what costs are involved in operations?
- Input costs
- Labour costs
- Processing costs (machinery, electricity, water etc)
- Inventory costs
- Quality management costs
Describe COST LEADERSHIP
Involves striving to have LOWEST costs so that you can have the most COMPETITIVE PRICES in the market.
This is achieved through economies of scale
What is the basis of goods & services differentiation
Strategy where businesses seek to be competitive on the basis of its goods and services being DIFFERENT or BETTER than competitors
What are goods/services differentiated by?
- tangibility and perishability
- customisation
- ownership
- time between production and consumption
- determination of value
How can a business differentiate its PRODUCT?
- product features
- quality
- augmented features (added on benefits)
how can a business differentiate its SERVICES?
- Time spent performing service
- level of expertise/experience by service provider
- quality of materials used
What are standardised goods?
Mass produced, same level of quality
Example: COCA-COLA
What are customised goods?
adjusted to suit needs of customers, definitely applies to service
Example: subway offering a variety of topics
What are the influences of operations management?
Acronym: 2GLTEQC
- Government policies - Environmental sustainability
- Globalisation - Quality expectations
- Technology - Cost-based competition
- Legal regulation
What is meant by corporate social responsibility?
CSR refers to open and accountable business actions based on respect for people, community/society and environment.
Involves business doing MORE than just laws and regulations..
What does CSR value?
Corporate social responsibility values the triple bottom line:
1. Financial returns
2. Social responsibility
3. The environment
Explain:
‘Legal compliance’ vs ‘Ethical responsibility’
Legal compliance requires business to follow letters of the law whereas ethical responsibility sees a business goes above and beyond the laws requirements.
-> As complying with the law is expensive, ethical responsibility (taking law further) shows that a business is not concerned with just profits
What are the two types of outsourcing?
Onshore: Using domestic businesses as outsourcing provider. Usually contractors
Offshore: Taking activities to a provider overseas. Takes advantages of regulatory differences
What is the role of the ILO
The International Labour Organisation is an international body which provides a set of guidelines/rules for labour internationally.
Businesses can refer to the ILO for assistance with ethical decision making in offshore outsourcing and international labour restrictions
What is meant by Environmental sustainability in operations management?
Eco growth should not occur at the expense of the environment. Environmental sustainability is about having a balance between economic concerns and environmental concerns
There is a current expectations that products are ‘clean, green and safe’
What is meant by Social responsibility in operations management?
Socially responsible businesses aim to:
1. Expand business
2. Provide for greater good of society
Social responsibility is good for building reputation and therefore sales
