Operations Strategies Flashcards
Performance Objectives
goals that relate to particular aspects of the transformation processes.
Quality (objective)
how well a product is made, or a service is delivered. quality of design, quality of conformance and quality of service.
Speed (objective)
refers to the time it takes for the production to respond to changes in market demand
reducing waiting times, shorter lead times, faster processing
Dependability (objective)
refers to how consistent and reliable a business’s products are (can be measured by warranty claims)
Flexibility (objective)
refers to how quickly operations can adjust to changes in the market. It is important that adjustments can be made to cater for those changes.
Customisation (objective)
creation of individualised goods and services that meet the specific needs of the customers. Although most product are standardised, producers often create opportunities for customers to make individual choice that can be catered for during operations without compromising other objectives.
Cost (objective)
cost refers to the minimisation of operations expenses.
New product design and development process
- market research, product concept and specification development
- product design and prototype development
- prototype testing and assessment
- product refinement and production process refinement
- production product launch
Supply chain management
involves integrating and managing the flow of suppliers through the inputs, transformation processes and outputs in order to meet the needs of customers.
Global sourcing
also called ‘procurement’ or ‘purchasing’ sourcing refers to the purchasing for inputs for the transformation processes.
Global sourcing is a broad term that refers to business purchasing supplies or services without being constrained by location. In the supply chain management activity, global sourcing means buying or sourcing from wherever the suppliers are the best at meeting the sourcing requirements
E-commerce
involves the buying and selling of goods and services via the internet.
E-procurement
is the use of online systems to manage supply and allows suppliers to direct access to the business’s level of supplies
Logistics
term broadly referring to distribution but includes transportation, the use of storage, warehousing and distribution centres, material handling and packaging.
Advantages of outsourcing
Keep it simple (KISS) – a business that outsources the tasks that have to be done but which are not core processes can focus on things that matter most
Efficiency and cost – highly skilled labour is effective at performing tasks; outsourcers are usually competing to win business. They use the newest technology to maintain contracts.
Increased accountability – the divide between the two entities allows a formalised level of expectations that is simpler to formalise and enforce
Access to new skills – a business outsourcing to a nation such as Vietnam or India may have access to highly skilled labour at low costs
Disadvantages of outsourcing
Payback – the amount for time it takes to repay the costs of establishing an outsourcing relationship. This could take 2-3 years.
Loss of control standards and information security – trusting outsources requires performance of duty as well as privacy and security standards to be maintains
Organisational change – when outsourcing occurs, businesses are subjected to major changes in procedure, job losses and challenges to sentiment
Information technology – as outsourcing grows, so too does the need for supporting IT systems. new systems can reduce any financial advantages accruing in the short term.
