OPERATIONS Flashcards
{role} Strategic Role
Cost Leadership-
Aiming to have the lowest costs in the market. Greater value at lower prices.
Achieved by: Economies of scale Access to cheaper raw materials Access to large source Efficiency in operations Technology
Goods/Service Differentiation-
- Quality
- Faster Delivery
- Customisation
- more features
- Location
- Improved service
[Role] Goods and/or services in different industries
Goods can be:
- Standardised
- Customised
- Reused
- Perishable or non-perishable
- CAD and CAM
Services can be:
- Standardised
- Customised
- Intangible
- Customisable
[Role] Interdependence with other KBF
All key functions are interdependent and rely in each other for success.
Operations- must supply a product that has the features and quality consumers want as well as being reliable in distributing the product to the market.
Marketing- connects operations directly with the customer. Identifies the nature of consumers’ desires and implements marketing strategies to encourage purchase of goods made in operations.
Finance- required so production and distribution can take place. The finance manager creates budgets and makes funds available to purchase inputs, equipment and repairs.
Human Resources- required for the hiring of employees to work in production. Ensures that there are enough employees with the appropriate skills.
[Influences] Globalisation
- Location of different parts of the production process in different areas will reduce labour costs
- More raw materials, technology skills and low transport costs
- Reach more markets and provide franchises
- Global market
[Influences] Technology
-Enables service based businesses to penetrate global markets through internet
[Influences] Quality expectations
- Customer satisfaction
- Durability
- Reliability
- Fit for purpose
[Influences] Cost-based competition
- Gain advantage by using lower operational costs
- Cheaper labour
- Outsourcing
- Lowering quality
- Cheaper inputs
[Influences] Government
Method used to encourage innovative and competitive
- Monetary benefits
- Free trades, taxation, interest rates, government spending and environmental incentives.
[Influences] Legal regulations
Local, state and federal level
Legal responsibility of the operations manager to be aware of all the requirements
- WH&S, Anti-discrimination, equal employment opportunity, local zoning, GST collection
[Influences] Environmental Sustainability
Methods that allow production to use resources without limiting the ability of future generations to satisfy their needs and wants
[Influences] CSR
Difference between legal compliance and ethical responsibility
[Processes] Inputs
Transformed- materials, information, customers
Transforming- HR, facilities
[Processes] Transformation processes
- the influence of volume, variety, variation in demand and visibility (customer contact)
- sequencing and scheduling – Gantt charts, critical path analysis
- technology, task design and process layout
- monitoring, control and improvement
[Processes] Outputs
Customer Service
Warranties
[Strategies] Performance objectives
quality, speed, dependability, flexibility, customisation, cost
[Strategies] New Product/Service Design and Development
New product: design, development, launch and sales of new products allows a business to grow and maintain a competitive advantage, different approaches (customer approach/changes or innovation in technology).
Service design and development: more complex, adding to the service offered to the customer, can be adding to variety/increase of choice, develop within cast structure.
[Strategies] Supply chain management
Logistics: the transport of physical raw materials, inputs and the distribution of finished goods to markets. It involves the integration of information, transportation, inventory, warehousing, materials handling and packaging. Computerisation can make the task faster/more efficient. The role of logistics is to ensure that operations have the right items at the right quantity and the right time at the right place.
E-commerce: the use of internet to buy and sell goods and services. Alter operation process, e-procurement, managing supplies in an organised way, makes trading easier, cheaper access to global markets, privacy and security issues, and increased risk of purchasing unsatisfactory or faulty materials.
Global sourcing: business acquires the inputs it needs for production across the borders of a number of countries. A business seeks to find the most cost effective location for manufacturing a product, even if the location is overseas, may be cheaper to purchase inputs from overseas than create them, keep control over complex supply chains, lower costs, loss of control over quality, reliability and costs, slower lead times.
[Strategies] Outsourcing
Advantages- specialised, lower cost, greater effectiveness, employees of other business, speed, flexibility, less input from management, can focus on core of the business
Disadvantages- More expensive potentially, not in control, dependant on other businesses, loss of jobs, security and confidentiality issues
[Strategies] Technology
Leading edge
Established
[Strategies] Inventory management
LIFO
FIFO
JIT
[Strategies] Quality management
Quality control- involves checking transformed and transforming resources in all stages of the production processes, failure to meet pre-determined targets=corrective action
Quality assurance- involves monitoring and evaluating the various processes of a project, service or facility to ensure that a minimum level of quality is being achieved by the production process. Assures set standards are met, pre-determined (universal) quality standards
Quality improvement- involves continuous improvement in all functional areas to reduce the rate at which mistakes occur. Ongoing commitment to improving goods/service and total quality management- quality is a commitment/responsibility of all staff
[Strategies] Overcoming resistance to change
FPRRRI
Financial costs- purchasing new equipment, redundancy payment, retraining, reorganisation of plant layout
Inertia- psychological resistance, fear of losing jobs/uncertainty
[Strategies] Global Factors
GLOBAL SOURCING- refers to the process of acquiring raw materials, services and various parts that are needed to manufacture goods or services. A business may use a global web strategy.
ECONOMIES OF SCALE- occur when the amount of production increases and as a result of this increased output there is a decrease in the cos of production per unit of output.
SCANNING AND LEARNING- involves monitoring a business’s internal and external environment so that it can gather, analyse and use information for tactical or strategic purposes. Scanning the global environment to identify and learn the critical global trends that may impact on the business
RESEARCH AND DEVELOPMENT- helps business to create ideas for new product or services that will give them a leading edge over other businesses
