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
quality assurance
documented system of all the processes for quality within an organisation - prevents defects
quality improvement
improve quality over time by reducing error and finding better ways of performing tasks leading to lower cost or higher quality at the same cost.
overcoming resistance to change
implement strategies to plan for the change to increase the chances of success and involvement by employees.
purchasing new equipment
it will take time to select the best new equipment and disruption when it is installed and any problems.
redundancy payments
where a worker ceases to be employed because s/he is no longer required by the business.
it becomes a cost for operations managers.
retraining
advertising job specifications, recruitment and selection. The present workforce may need to be retrained to operate particular equipment.
reorganising plant layout
time and effort to plan, it will be a disruption to the production processes.
inertia
people in the operations function resist the change simply because they do not like change.
global factors
This presents opportunities to improve operations, but it also creates new risks (volatile markets, different laws etc).
global sourcing
It allows the business to find suppliers who have lower processes, higher quality products and more advanced technology.
economies of scale
cost advantages that can be gained by producing on a larger scale. As the scale of production increases, the costs per unit falls. This means profitability can rise.
scanning and learning
when businesses watch what other businesses are doing and then adapt in order to compete more effectively.
research and development
new methods of conducting operations to improve quality, reputation of the business and innovation, reduce costs etc
