Operations - Influences on operations Flashcards
What are the influences on operations?
- globalisation
- technology
- quality expectations
- cost-based competition
- government policies
- legal regulation
- environmental sustainability
- corporate social responsibility (CSR):
1. legal compliance
2. ethical responsibility
3. environmental sustainability
4. social responsibility
Describe the influence of globalisation on the operations process.
- globalisation refers to the removal of barriers of trade between nations.
- characterised by an increasing integration between national economies
- high degree of transfer of capital (facilities and/or machinery), labour, intellectual capital and ideas, financial resources and technology
What are the three key ways which globalisation influences the operations process?
- Global consumers seeking standardised goods and services (e.g Phones, travel/tourism)
- Global web and production facilities needs supply chain management (global sourcing, logistics, storage, proximity to markets)
- off-shoring or outsourcing, reduce costs, economies of scale
Describe the influence of technology on the operations process.
- technology is the design, construction and application of innovative devices, methods and machinery
- advancement of technology was further progressed by globalisation. Increased trade and interconnectivity allows for sharing and transfer for technology between countries
- enable people to communicate more easily and facilitate improved business processes
Outline quality expectations as an influence on operations
- how well designed/made and functional goods are and the overall degree of competence with which services are organised/ delivered
- the expectations customers have of a business determine the way products are designed, created and delivered
- operations processes must follow certain standards and produce to a set level of quality
What are the quality expectations with goods?
- Quality of Design
- how well the concept has accounted for consumer needs/expectations
- materials/waste minimisation
- innovation - Fitness for Purpose
- how well the product executes its purpose
- how easy it is to use - Durability
- reliable and long lasting
- easily it can be repaired/maintained
- efficiency of after-sales services (warranty claims and service calls)
What are the quality expectations with services?
- professionalism of the service provider
- cleanliness/layout of physical facilities
- courtesy and care taken in interactions - reliability of provider
- how efficiently service is performed
- competence - level of customisation
- how well particular needs are fulfilled through application of expertise and experience
Outline cost based competition as an influence on operations
- derived from determining the breakeven point and then applying strategies to create cost advantages over competitors
- opportunities for price increase are limited, thus to maximise profits businesses find ways to reduce their costs
- cost based competition will focus on a cost leadership approach in management of operations
Outline government policies as an influence on operations
- all businesses are affected by government decisions
- changes in government policies can lead to the need for a business to change its operations
- e.g. taxation rates, industry training equipment, work health and safety, materials handling practices, public health policies, environmental laws, employment relations
Outline legal regulations as an influence on operations
- the range of laws a business must comply with are termed ‘compliance’
- compliance costs are the expenses associated with meeting the requirements of legal regulations
- Work Health & Safety 2011: Safe & healthy working conditions require that employees be given appropriate safety training, use of protective equipment, & work with machines that abide by safety standards (enforced by SafeWork)
- Fair work 2009 & Anti-discrimination act: requiring that employees be treated with dignity & respect in any workplace environment
Outline corporate social responsibility (CSR) as an influence on operations
- refers to the open and accountable business actions based on respect for people, community and the broader environment
- it involves businesses doing more than just complying with laws and regulations
- the triple bottom line –> financial profitability, social impact and environmental impact
Compare legal compliance with ethical responsibility
Legal compliance:
- businesses abiding by the word of law
- businesses are required to meet a prescribed standard of behaviour
Ethical responsibility:
- the business meeting all legal obligations and taking it further by following the spirit of the law
- making decisions that are legally and morally correct
Outline environmental sustainability in corporate social responsibility
- business operations should be shaped around practices that consume resources without compromising access to resources for future generations
1. sustainable use of renewable resources
2. reduction in the use of nonrenewable assets
3. application of precautionary principle - business are aiming to reduce their carbon footprint by adopting greenhouse reduction methods and developing long term sustainable strategies
Outline social responsibility in corporate social responsibility and provide examples
- a socially responsible business tries to expand the business while providing for the greater good of society
- engaging in socially responsible behaviour will cost short term but often serve in their best interests later
- e.g. family-friendly workplaces, using local employees
