operations strategies Flashcards
quality
Good quality prevents costs caused by product recalls and repairs made under warranty and also meets consumer expectations. Quality is also about the operations process, a quality process will get the operations right the first time.
speed
It refers to the time it takes for production and the operations processes to respond to changes in market demand. Speed aims to satisfy customer demands as quickly as possible
dependability
how well the product is designed and made, and whether the product works to the standard expected by customers.
flexibility
How easily and quickly operations can switch to a new model or variation of a good to meet a change in the market or changes in customer wants.
Also flexibility relates to volume, which is how quickly operations can change from producing few products to increasing output to meet increasing demand.
customisation
how quickly a product can be redesigned to produce a unique good or service that matches the customer’s desires.
cost
keeping costs as low as possible.
new product or service design and development
If a new product or design is created, appropriate different transformed resources are purchased and transformation processes changes as appropriate
supply chain management
the management of materials, information and finances as they move in process from supplier to manufacturer to wholesaler to retailer to consumer
logistics
plans, implements and controls the efficient, effective flow and storage of goods, services and related information between point of origin and point of consumption in order to meet customer requirements.
e-commerce
buying and selling on the internet
global sourcing
obtaining supplies without being constrained to local sources.
This has advantages in lower cost because the materials might be cheaper elsewhere
outsourcing
strategies that relate to opportunities in the global external environment to improve operations contribution to the business
outsourcing advantages
Reduction and control of operating costs
Increased flexibility
Improved company focus
outsourcing disadvantages
Loss of jobs within the business
quality issues
Customer resistance
Ethical concerns
technology
opportunity to increase speed, flexibility, quality and customisation,
whilst decreasing average production cost.
leading edge technology
encourage their competitors to follow suit or to gain a competitive advantage. It can be risky and there is uncertainty
established technology
well known established technology they may not attract a competitive advantage however not using it may result in competitive disadvantage.
advantages of holding stock
Consumer demand can be met
alternatives can be offered
Older stock can be sold at reduced prices
disadvantages of holding stock
storage
spoilage
insurance
theft
handling expenses
LIFO (last in first out)
This means that the stock purchased most recently is sold first
fewer more expensive stock is sold, making a higher cost of goods sold and lower profit, this can reduce the tax a business has to pay.
FIFO (first in first out)
first stock that has been purchased is the oldest and will be sold first.
costs of goods sold will be lower and income higher.
JIT (just in time)
hold as minimal stock as possible and only bring in stock from suppliers as required.
Only the exact number is delivered at a specific time. This reduces the impact on working capital as not as much inventory is locked up, it also improves efficiency.
quality management
increasing planning, documentation and analysis of production steps
decreased average cost of production, waste and defect rate
quality control
checking resources in all stages of the production process
