operations case studies Flashcards
globalisation (influences)
Amazon;
From Seattle, United States to 185 distribution centres in 5 different continents
- Amazon launched many home-brand products, with a Global Sourcing Team in Shenzhen, China to globally source cheap inputs most efficiently
- Amazon built its largest campus in the world in the Indian ‘Silicon Valley’ of Hyderabad, employing 15,000 staff to conduct software R&D
cost-based competition (influences)
In response to new foreign competition from Amazon, Aldi and Costco, Coles have sought cost leadership by;
- Investing $150 million in automated distribution centres to cut costs
- Specifying how suppliers package products to make them cheaper and faster to transport and put onto shelves
- Reducing the variety of brands stocked for each product to negotiate lower supply costs.
- Created their own brand, able to produce goods for cheaper costs maximising profit
- Offshoring production of home brand products
As a result, Coles’ has stabilised its market share at 28%.
technology (influence)
In 2012, Uber was launched in Australia
- Used leading edge smartphone technology to connect customers to drivers and rate their service, it provided a cheaper product with better service and dependability than taxis
- Increased amount of drivers they had through simplicity of their applications process → outdated taxis processes
- Higher speed of customer pick up as app allowed them to assign closest driver to customer location → outcompeted taxis radio communication system
- Uber saves costs as they have eradicated the cost of buying cars as taxis do, no need for specific licence
- As a result, one third of sydneysiders used Uber in 2017, it is now the most popular form of transport in the taxi/ride share market
- Uber is now the most popular form of transport in the taxi / rideshare market
quality expectations (influence)
Coca cola uses quality management to reduce defects
Quality control:
Feedback; They take samples of sugar & glucose to make sure coke tastes the same world wide.
Feedforward; Chemical testing of ingredients and gamma ray scanners of the finished products. Gamma ray scanners also ensure the level of coke is to the brim and the same within every can/bottle.
Quality assurance: they achieved ISO and GFSI (benchmarks revolving around food practices) certifications guaranteeing its quality in response to requirements from Walmart.
Quality improvement: online platform where employees post ideas to further reduce defects, and comment or like other suggested ideas.
ike” other suggestions
Coke has achieved a Global Product Quality Index above 95% every year since 2010
government policies (influence)
- Closed international borders during covid caused Qantas to lose $20 billion in revenue
- They could only cater for restricted amount of passengers, decreased profitability
In response, Qantas opened 45 new domestic routes, and the Government subsidising 800,000 half price airfares
- Qantas’s ability to respond to government regulation has allowed them to maintain their image as Australia’s best and biggest airline generating a net profit of approx $1.74 billion in 2023
legal regulations (influence)
Qantas must follow legal regulations during covid-19, such as;
- Temperature checks of customers
- Random alcohol and drug testing for pilots and engineers
- New security regulations in response to terrorism
- State government regulations on labour such as WH&S, anti discrimination and workers compensation
- Qantas’s ability to comply with legal regulations has allowed them to maintain their image as Australia’s best and biggest airline generating a net profit of approx $1.74 billion in 2023
corporate social responsibility (influence)
Chevron has been criticised for treatment of the environment and local communities surrounding mines.
They improved their reputation with a range of social initiatives, including;
- partnering with charity organisations such as The Global Fund to reduce diseases in countries where it operates, such as HIV in Nigeria.
Chevron also strive for diversity in its workforce with;
- recruitment and outreach programs that target underrepresented groups, including the ‘Women in Engineering’ training courses
In 2019, Chevron earned a perfect score on the Disability Equality Index and was ranked in the top 100 ‘Best Places to Work’ on Glassdoor
warranties (processes)
Some iPhones froze after customers downloaded a software update, but Apple denied customers replacements if any part of their device had been previously repaired by a third party - even if the repair was unrelated (such as a screen replacement)
The ACCC fined Apple $9 million
In 2022, Apple responded to criticism by beginning to sell spare parts for third-party repairs
customer service (processes)
Uber has a more simplified process for ordering a taxi to maximise speed and convenience
Drivers with a poor rating are suspended from the app, ensuring high quality customer service
65% market share in its major markets, including Australia, the US and Europe
new product design & development (strategies)
In response to increasing health concerns, Coke launched Coke Life in Australia in 2015 with natural stevia and less sugar to adapt to an increasingly health conscious market
Trialled in the South American and British market
Coke Life was unpopular in Australia and Coke sales fell 5% in the year of its launch. After 2 years and millions of dollars spent, they terminated the product and replaced it with Coke No Sugar (this led to 5% organic revenue growth in 2018 and 6% 2019)
Due to their new product design and development Coke has been able to cement themselves as the 5th most valuable brand in the world in 2015. brand value is $AUD116 billion, in comparison to their competitors Pepsi with a brand value of $AUD 26 billion.
resistance to change (strategies)
Toyota makes continuous improvements (‘kaizen’) to operations, such as:
- refining ‘just-in-time’
- re-organising plant layout in Japan, with elevated platforms, Instead of hanging cars from the ceiling, they changed to raised platforms to reduce ceiling heights and heating/cooling costs by 50%
and shortened assembly lines, reducing lines by 35%, reducing installation costs and increasing productivity by not forcing workers to walk as far between cars
To overcome inertia, one of the 14 principles of The Toyota Way is to “make decisions slowly by consensus; but implement decisions rapidly”. This democratic approach empowers staff to overcome changes.
Toyota closed its factory in Australia due to rising production costs, it paid redundancy costs of $200 million for approximately 2500 employees - more than the legal requirement.
outsourcing (strategies)
Nanna’s Berries:
Outsourced packaging of berries to factory in China
Weaker regulations and lack of control led to contamination of berries and over 20 Australians catching hepatitis A (2015)
This led to a national recall and new legal regulations on testing imported foods
In 2017, an old batch of berries were accidentally sold, leading to three more infections
$14.6 million reduction in net profit
They paid $3.8 million in wastage costs → had to get rid of all products to avoid re contamination
inventory management; jit (strategies)
Toyota pioneered the just-in-time approach
Developed the ‘kanban’ system for tracking inputs to ensure it did not run out
Uses inventory software, automatically placing orders for stock when levels are low or if there is a spike in orders
It has some of the lowest production costs in the industry
global sourcing (global factors)
Amazon have established a Global Sourcing Team in Shenzen, China to help globally source low-cost inputs most efficiently
As a result, amazon has the highest revenue in the world and re-invests its surplus cash into expansion and product development
research and development (global factors)
Amazon has opened its largest campus in the
world in the Indian ‘Silicon Valley’ of Hyderabad, employing 15,000 staff to conduct software research and development
