operations strategies Flashcards
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what are performance objectives and what r the 6 types?
Performance objectives are goals that relate to specific areas of the transformation process
* It’s what managers are targeting to achieve to enhance a business’s prosperity
Quirky Singles Dance Freestyle, cutting Confetti
q- quality
s-speed
d- dependability
f- flexibility
c-customisation
c-cost
what is the purpose and aim of quality?
Purpose :
* exceed customer expectations and boost sales revenue
Aim :
* adopt quality management processes throughout the entire transformation process
what is the purpose and how its achieved - speed
Purpose :
To fulfil customer demands as quickly as possible as businesses operate in dynamic environments so its bound to occur
How achieved:
- reduced wait, lead, production and delivery times
o this can be done by eliminating production bottlenecks and creating open communication
whats the purpose and how its achieved - Dependability
Purpose:
-To reduce warranty claims (goods)/ complaint
- It allows businesses to gain a positive feedback and good reputation – repeat sales
How achieved :
* Through quality management processes
- Using research and development techniques to access high tech quality management procedures
whats the purpose and how its achieved - Flexibility
How fast the operations process can adapt to all changes in the market
Purpose : Improve processing times – better chance of adapting successfully
How achieved :
Increased demand for :
New products = change in inputs and processes
Existing products = increase volume and variety of the product by increasing capacity
how is flexibility applied to goods and services?
Goods : increasing capacity
Services: increasing the number of service providers, the skill levels and technology.
what is the purpose and aim of customisation
Purpose – satisfy customers by using their specific desires in the transformation process
* Businesses can charge higher prices whilst increasing customer satisfaction
Aim -
* Use differentiation strategy
o Mass customisation : choosing certain features
what is the purpose of cost
Purpose : to achieve cost leadership
Through product development businesses can :
- Attain a competitive advantage and enable the business to grow
- Maintain consumer satisfaction
- Achieve a greater market share for long term growth
what are the 2 approaches to new product development
- Consumer preferences
- Undertake a lot of market research to learn what consumers desire - Changes and innovations in technology
- New and improved technology can create more functional, appealing and better-quality products
what are the key considerations when developing goods?
- Supply chain management : new products require new inputs
- Quality management : ensure new innovations meet business standards
- Capacity management : business must have facilities to produce all products (existing n new)
- Costs (cost benefit analysis)
what are the key considerations when develooing services?
explicit/implicit service, goods
Explicit service : tangible part of the service; time, skill and effort of service provider
Implicit service : the service experience, was the employee nice?
Goods : a massage business that is a service will need goods such as beds and massagers
what is a supply chain and what does involve
A sequence of processes that enables businesses to coordinate supplies throughout operations to meet consumer needs. It involves integrating and managing the flow of supplies throughout the inputs, transformation processes and outputs in order to best meet the needs of customers.
suppliers- manufacturers- distributers
what is procurement/sourcing and whats the most common type
Finding and buying the inputs that a business needs from its suppliers
what are advantages of global sourcing
-inputs cheaper
-more choices to choose from
-increased speed and quality of outputs
what are disadvantages of global sourcing
-economic costs such as tariffs and exchange rate fluctuations
-time and logistical costs
-legal and ethical issues when sourcing from places w looser laws
what do business managers need to assess when sourcing inputs
whether supplier reliable n flexible (in terms of being able to deal with last min)
-responds quick to change in demand
-delivers on time
-business msut balance consumer demand with input volume
-quality of inputs
what is logistics and what tasks are involved in it?
Involves the transport of physical raw materials, inputs and the distribution of finished goods to markets.
T A S K S -
-Inventory management
-purchasing inputs
-planning and scheduling
what are the three types of logisticians
distribution - the ways of getting the goods/services to the customer
storage, warehouse and distribution centres - involves finding a secure place to hold stock
material handling and packaging : different products require different methods
what is e commerce and why its beneficial?
Is the use of the internet to both buy and sell goods and services.
benefits
-it helps establish networks of suppliers
-makes collecting and storing data easier
-provides better access to more information/markets
what are disadvantages of e commerce
- customers cant try it
- ecommerce highly competitive
- shipping can be lengthy
- complexity in taxations and regulations
- need for technology
- harder to establish awareness
what is B2B n B2C online
B2B : E- procurement, using internet to purchase stock
B2C : selling products to consumers, using internet for ordering and logistics
what is e-tailing?
E-tailing ; businesses that use a virtual store and sell their goods and services through a website
what is electronic data interchange
use of computers, barcodes, and scanner systems to monitor individual stock items and keep accurate records of inventory levels. (security)
what is outsourcing?
Involves the use of external providers to perform business activities.
- The theory behind outsourcing is that when a service is performed by an external provider that specialises in a particular business function, it will do so at a lower cost and with a greater effectiveness.
whats the difference between outsourcing and global sourcing
global sourcing refers to buying the raw materials, components, complete products, or services from companies located outside the home country.Whereas outsourcing refers to enabling entire operation processes to be performed in different countries around the world.
businesses may buy their inputs or make them? what are the key advantages of both
making them -
-lower costs when EOS achieved
-more control over process
-ability to protext technological innovations
-ability to respond to changes and variation in demand quicker
buying -
-lower costs when selecting a cheap supplier
-no need to invest in factory
-may be cheaper if businesses only require particular inputs in small quantity
what r the 6 types of outsourcing
operations, HR, administrative, IT, Finance and accounting, knowledge process outsourcing, legal process outsourcing
what are the three main factors of outsourcing?
cost, locations, contract
Cost – is outsourcing more efficient, is the cost worth it (cost-benefit analysis)
Location – which location and which company will the business outsource too?
Contract -how will we manage the outsourcing contract
what r advantages of outsourcing?
efficiency, cheaper labour, less stringent laws,requires activites for a businesss
-PROCESS CAPABILITY**
– how well operations can meet production targets
* Provides better access to technology and labour
Accountability – very detailed contracts are made to ensure its reliable and that the outsourcing partners reach the incentives of KPI’s.
What r disadvantages of outsourcing
-pay back periods (amount of time paying back outsourcing costs)
-communication issues
-lack of control
-redundancy costs
-lack of knowledge- rely on outsourcing too much, causing business to forget how to perform certain activities
what are the types of technology
leading edge technology - * Extremely innovative, The most advanced technology currently
established technology- widely used and accepted, businesses have time to integrate it and simply if a business doesnt have it, they will struggle (computers, cad, cam, robotics)
what is inventory?
refers to the amount of raw materials, work-in-progress and finished goods that a business has on hand at any particular point in time.
why is it important to control inventory?
. Too much inventory will increase storage costs, while not having enough stock on hand will result in lost sales and potentially damage the business’s reputation as a reliable supplier
what are the 4 inventory management strats utilised
-just in case/holding stock
-first in first out
-last in first out
-just in time
what is just incase/holding stock
When a business holds a certain level of stock as a reserve to cover inter-ruptions to supply an unexpected increase in demand, just in case.
what is the first-in-first-out method
COGS : higher or lower?
-Gross profit : higher or lower?
-Value of unsold stock : higher or lower?
- The oldest products are sold first
- Used for perishable products because if the oldest products aren’t sold first they will expire and end up as waste
cogs : lower
gross profit ; higher
value of unsold stock: higher
what is the Last-in-first-out method
COGS : higher or lower?
-Gross profit : higher or lower?
-Value of unsold stock : higher or lower?
- The newest products are sold first (products produced last)
- Used for non-perishables because date of production does not matter
- Homogenous goods
cogs : higher
gross profit : lower
value of unsold : low
what is the just in time method and what differentiates it from the other two
what are pro/con
Materials are ordered to arrive only just in time to meet consumer demands.
-This is not used to value inventory, just to manage it.
pro - easier, less space, cost savung
con- EOS cant be used, harder to boost demands
what are the 4 quality characteristics
Safe
Durable
Consistent
Fit for purpose
what is the difference between quality control, assurance and improvement
control - reactive approach which detects faults but doesnt prevent so inspections and Checking the result against the plan
assurance - proactive quality system so making products right first time along against gov n legal standards as well as business stds
improvement - continous and total quality improvement
what are driving and resisting forces?
Driving: forces that initiate, encourage and support change
Resisting : forces that work against change, creating resistance.
what are the financial factors in regard to resistance to change
aspects related to changing operations that cost the business money
-purchasing new equipments
-buying leading edge technology
-redundancy payments
-retraining
-reorganising plant layout (restructing or structural costs such as installing)
what is the psychological factor in regard to resistance to change?
inertia.
Avoid taking risks with uncertain returns. Inertia is the psychological resistance to change due to :
- Changes are putting jobs at risk or limiting job opportunities or promotions
- Employees find new technology intimidating
- Having to learn new skills is daunting for employees
- Employees don’t like change
what is creating a culture of change referring too?
a strat to reduce resistance to change
-Identifying individuals who could act as supportive change agents
^ These people fulfil a crucial role in helping to establish a positive and supportive workplace culture.
what are management consultants
People who specialise in a diverse range of business-related areas. Businesses hire them because they provide a wide range of business experiences, specialised knowledge and skills, and an objective (external) viewpoint
how to manage change effectively ? - low risk
3 steps
- identify the need 4 change
- business/management information systems (gathering data)
- setting achievable goals
how to manage change effectively - high risk
manipulation, threat on employees
High Risk strategies to implement change : their failure may generate negative outcomes such as permanently damaging work relationships by making changes abruptly and unexplained
what r the 4 global factors
- global sourcing
- economies of scale
- scanning and learning
- research and development
