Roll of Operations Management Flashcards
Outline the strategic role of operations management
Involves contributing to the strategic direction of the business. Main business goal is to maximise profits. Operations can contribute to this by providing products/services in the most COST EFFICIENT manner. By reducing costs and maximising sales… profits INCREASE
Describe COST LEADERSHIP
Cost leadership involves aiming to have the lowest costs or to be the most price-competitive in the market, whilst remaining profitable. This is done by reducing their costs through economies of scale.
Costs that are a feature of cost leadership
Input
Labour
Processing/manufacturing
Inventory
What is GOOD / SERVICE DIFFERENTIATION
Product differentiation means distinguishing products (goods or services) as being different or better than its competitors.
How can a business differentiate its GOODS?
Varying the actual product features
Varying product quality
Varying any augmented features
Business inputs for creating GOODS
Raw materials
Labour resources
Information
Machinery, technology and equipment
How can a business differentiate its SERVICES?
Varying the amount of time spent on a service
Varying the level of expertise brought to a service
Varying the qualifications and experience of the service provider
Varying the quality of materials/technology used in service delivery
Business inputs for creating SERVICES
Skill Education Time Qualifications Materials Technology
What are the types of good in different industries
hint: standardised and customised
- Standardised goods are mass produced, usually on an assembly line and have a level of quality that does not change.
- Customised goods are differentiated products that are varied as perishable or non perishable, according to the needs of customers and are produced with a market .
What is economics of scale
As a business grows in sales, its output increases and cost savings can be achieved by being able to work more efficient machinery longer and purchase input resources at better prices, therefore the cost of each unit of output can be lowered.
What is interdependence
Interdependence refers to the mutual dependence that the key business functions have on one another and have the same business goals.
How are each function dependent on operations
hint: human resources, marketing and finance
Informing Human Resources of the skills required for staff and training and development programs needed
Ensuring products are finished and ready for sale and meet the product quality promises, so marketing can promote and sell the products on time.
Finance rely on operations to keep their expenses down and produce efficiently and effectively at the lowest cost
How does operations rely on each other function
hint: human resources, marketing and finance
Human Resource to oversee correct staffing levels, training and work schedules as well as ensure correct Workplace legislation is adhered to.
Marketing to promote and sell the product and determine estimated sales to work out production levels.
Finance supplies funding for capital equipment and plants in order for production and distribute funds in order to pay for raw materials.
