Section E Flashcards
What are operations?
Activities concerned with acquisitions of raw materials, conversion into finished products and supply of product to customer
What is operations management?
Activities involved in designing, producing and delivering products and services.
What are processes?
Building blocks of operations, that connect with one another to form a network
Transform input resources into output products/services
What are the 4V’s in operations?
Volume
Variety
Variation
Visibility
What is porters value chain?
Based around activities rather than functional departments
Considers organisations activities that create value and drive costs, organisations should focus on these activities
Activities split into primary and secondary (Support)
What are activities split into in porters value chain?
Primary
Secondary
What are primary activities?
Directly concerned with creation or delivery of a product/service
What are secondary activities?
Help improve efficiency and effectiveness of the primary activities
What is process design?
Method by which individual specialists seek to understand business processes and ensure these processes are designed to be efficient and effective as possible
What is a process map?
Process visual representations of steps and decisions by which a product or transaction is processed
What are the advantages of a process map?
Management Understanding Standardisations Role understanding Highlights inefficiencies Supports corporate initiatives
What are the five stages of a product/service department?
- Considers customer needs
- Concept screening
- Design process
- Time-to-market
- Product testing
What department is purchasing part of and what are the responsible for?
Important part of operations
Responsible for placing orders
How do purchasing co-ordinate with finance?
Establishing credit terms Prices Payments Budgeting Data Capture Inventory
What department is production part of and what do they do?
Core part of operations
Plans and oversees production of goods
What do production liaise with finance for?
Cost measurement, allocation, absorption Budgeting Cost versus quality Production Process Inventory
What are the four main characteristics of services?
Intangibility
Perishability
Inseparability
Variability
What are some things finance assist service with?
Charge out-rates
Estimating costs
Problem Measuring benefits
What is a supply chain?
Consists of a network of organisations
Together they provide raw materials into work in progress and then into finished goods for distribution and sales
What is the order of a supply chain?
- Raw Material Supplier
- Manufacturer
- Wholesaler and Retailer
- Customer
What does transformation of a product include?
Production Planning Purchasing Material Management distribution Customer Service Forecasting
What is supply chain management?
Co-ordination of activities from supplier of raw materials to customer at end.
Good co-ordination can save costs while adding value
Technology can play a key part.
What is the name of the strategic supply wheel?
Cousins
What is cousins?
Emphasises importance of viewing supply as central to organisation and effectiveness
Organisations supply strategy should involve a number of key areas described as ‘spokes in the wheel’
What does MRP stand for?
Material Requirement Planning
What is Material Requirement Planning (MRP)?
Computerised system for planning the requirements for raw materials, work-in-progress and finished goods.
What tech has been developed from Material Requirement Planning (MRP)?
Manufacturing Resource Planning (MRPII)
Enterprise Resource Planning (ERP)
What is Manufacturing Resource Planning (MRPII)?
Goes several steps beyond MRP
What does Manufacturing Resource Planning (MRPII) include?
Production Planning Employee Attendance Machine Capacity Productivity Tracking Scheduling Demand Forecast and Analysis Quality Training Tool
What is Enterprise Resource Planning (ERP)?
Next evolution of an MRP
Combines information from aspects of operations and support functions into one single system
What are some definitions of quality?
Is product/service free from errors and does it adhere to design specification?
Is product/service fit for use?
Does product/service meet customer needs?
What are the methods of quality measurement?
Four main types of quality-related costs
Monitoring cost of quality is central to the operation of any quality improvement programme
What two things can quality related costs split into?
Conformance
Non-Conformance
What are some conformance costs?
Prevention costs
Appraisal Costs
What are some non-conformance costs?
Internal Failure Costs
External Failure Costs
What is Total Quality Management (TQM)?
Continuous improvement in quality, productivity and effectiveness obtained by establishing management responsibility for processes as well as output.
Every process has a process owner
Every person in entity operates within a process and contributes to its improvement
What are the features of TQM?
Prevention of errors before they occur
Continual Improvement
Participation by all
Commitment of senior management
What is Kaizen?
Japanese term for philosophy for continuing improvement in performance via small, incremental steps.
What are the characteristics of Kaizen?
Setting standards and continually improving to improve long-term sustainable improvements.
Focus of elimination waste, improving processes/systems and productivity.
All areas of Business.
Employees viewed as a source of ideas on reducing costs rather than source of high costs.
Allows organisation to respond quickly to changes.
What is six sigma?
Quality management programme
Achieve reduction in number of faults that go beyond acceptable tolerance limits.
What does sigma stand for?
Standard deviation
What is the key requirements of six sigma?
Focus on customer and based on level of performance.
Process should be related to main drivers of performance.
Needs to be part of wider performance management programme which is linked to strategy of organisation.
Senior manager have key role.
Training and Education essential for success.
Tight target but accepts some failure.
What are the limitations of six sigma?
Criticised for focus on processes and reliance on data.
Can be time consuming and expensive.
Organisation must be supportive.
Heavily data driven.
What is lean?
Philosophy that aims to systematically eliminate waste through the identification and elimination of all non-value adding activities.
What wastes need to be eliminated?
Inventory Defective Units Transportation Waiting Effort or Motion Over-processing Over-production
What does lean synchronisation aim to do?
Aims to meet demand instantaneously with perfect quality and no waste.
What is just-in-time?
Produce or procure products or components as they are required by customer or for use
What is the requirements of just-in-time?
High quality and reliability Elimination of non-value added activities Speed of throughput Flexibility Lower Costs
What is reverse logistics?
Return of unwanted or surplus goods, materials or equipment back to the organisation for reuse, recycling or disposal.
What is the main reason for reverse logistics?
Customer not satisfied Installation problems Usage problems Warranty claims Return of unsold stock Recall
What are KPI’s?
Measures which indicate whether or not CSF are being acheived.
What are some appropriate KPI’s for operations?
Supply chain costs per unit sold
Time taken to deliver customer needs
Percentage waste rate
Labour utilisation rate
What are the four approaches to selling a product?
Marketing orientation
Production orientation
Product orientation
Sales Orientation
What is marketing orientation?
Understand customer needs, then produces products with benefits and feature to fulfil needs
What is production orientation?
Focus on high volume product to achieve low unit cost
What is product orientation?
Focus on continual improvement of product, assumes customers want best quality for money
What is sales orientation?
Aggressive promotional policies to entice customer
What is the marketing planning process?
- Situation Analysis: SWOT analysis, PESTEL analysis
- Review mission and objectives
- Set marketing objectives: SMART
- Devise marketing strategy: market research, Positioning, Segmentation, Marketing mix, targeting
- Implementation
- Review
What is a macro environment?
Factors that influence organisation that are outside of their control
What does the acronym PESTEL stand for?
Political Environment/Ecological Social Technological Economic Legal
What are some social factors to monitor?
Population demographics Social Mobility Income Distribution Lifestyle changes Consumerism Levels of education
What is a marketing mix?
Set of controllable variable that a firm blends to produce desired results from its chosen target market
What are the 7P’s of the marketing mix?
Traditional 4P’s: Product, Place, Promotion, Price
Additional 3P’s for service industry: People, Processes, Physical Evidence
What are some features of a service organisation?
Services are intangible and more difficult to measure their quality.
They’re consumed immediately and cannot be stored.
Heterogeneity - Maintaining consistent output in difficult
Inseparability
Do not result in transfer of property
What are two main types of product issues?
Product Definition
Product Positioning
What is the product definition issue?
Issue defining what product should be
What three levels can product definition be done?
Core/genetic product
Actual product
Augmented/extended product
How would a car be specified using the three levels of product definition?
Core/genetic product: Personal transportation
Actual product: range of engine sizes, different body shapes offered
Augmented/extended product: manufacturers warranty or dealers discounted service contract
What is product positioning?
How does product compare with competitors?
What are the four key considerations (4C’s) of pricing?
Cost - must be able to make profit
Customers - how much will they pay?
Competition - is our price higher than competitors?
Corporate Objective
What are some types of pricing that can blend some issues?
Cost plus pricing: Cost per unit, then mark-up added
Penetration pricing: Low price is set to gain market share
Going rate pricing: Set to match competitors
Loss Leaders: Product may be sold at a loss, Expectation customer will then go and buy more profitable product
What is promotion?
Encourage customer to buy products by moving them along AIDA sequence
What does AIDA stand for in promotion?
Awareness
Interest
Desire
Action
What are some promotional techniquies?
Advertising
Personal Selling
Sales Promotion Techniques
Public Relations (PR)
What are some new forms of marketing?
Viral Guerrilla Experiential Digital Search Engine Postmodern
What is viral marketing?
Individuals pass on marketing messages
What is Guerrilla marketing?
Relies on well thought out, highly focused and attacks on key targets
What is Experiential marketing?
Interactive experience e.g. Roadshows
What is postmodern marketing?
Giving customer experience customised to them
What does selling direct mean?
Manufacturer sells directly to consumer
What does selling indirect mean
Longer supply chain
What is market research?
Systematic gathering, recording and analysing of information about problems relating to marketing of goods and services.
What are two data gathering techniques?
Primary Research
Secondary Research
What is Secondary Research?
Data that is already available
Quicker and cheaper than primary research
May not be accurate and may not meet needs
What are some internal and external examples of secondary research?
Internal: Accounts information, order information, loyalty card information
External: Internet, Market research agency
What is Primary Research?
Collection of new information direct from respondents .
More Expensive
Only performed if desk research fails
What are some examples of primary research?
Questionnaires Interviews Focus Groups Trial Testing Observation
What are the two types of data?
Quantative (Numerical)
Qualitative (Non-Numerical)
What are some examples of quantative data?
Total Market Size
Market Share Percentage
What are some example of qualitative data?
Beliefs of customers
Trends in customer preferences
What are the pros of having technology when doing market research?
Insight gained faster
Organisations can conduct focus groups online
Access to wide range of secondary research
What are the cons of having technology when doing market research?
Online research can give false impressions
What are the some tools used when doing market research?
Click Analysis
Visual Behaviour
Search Engine optimisation
Dashboard tools
What is click analysis within market research?
Tracks actions of users within website
What is visual behaviour within market research?
reveals where users spend time looking at screen
What are dashboard tools within market research?
Consolidate research into one interface
What is marketing segmentation?
Sub-dividing of marketing into homogeneous groups to whom a separate marketing mix can be focused.
What is a market segment?
Group of consumers with distinct, shared needs
Why do we have market segments?
People in segment more likely to purchase product
company can focus on a segment
Organisation can identify opportunities
What three criterias does Kotler suggest segments must meet?
Measurable: possible to identify number of buyers in each segment so profitability can be accessed
Accessible: Possible to reach potential customers via organisations promotions and distribution channels
Substantial: Small segments may be unprofitable
What are some bases for segmentation and examples for each base?
Demographic: Age, Gender, Family Life Cycle
Socio-Economic: Occupation, Income
Physiological: Lifestyle, attributes
Situational/Behaviour: Occasion of use, Frequency of purchase
What is targeting when talking about market segments?
Process of selecting most lucrative market segments for marketing the product
What are the three types of marketing?
Concentrated
Differentiated
Undifferentiated
What is concentrated marketing?
Specialises in one identified market only where a company knows it can compete
What is differentiated marketing?
Company makes several products each aimed at separate target segment
What is undifferentiated marketing?
Delivery of a single product to entire market. Little concern for segmentation
What is positioning when talking about marketing?
Involves formulation of definitive marketing strategy around which the product would be marketed to target audience
When talking about porters four positioning strategy if something has low cost and broad target what is it?
Cost Leadership: Organisation aims to be lowest cost producer
When talking about porters four positioning strategy if something has low cost and narrow target what is it?
Cost focus: pursuit of cost leadership, focused on one segment
When talking about porters four positioning strategy if something has high cost and broad target what is it?
Differentiation: Organisation produces products that are different and appeal to customers
When talking about porters four positioning strategy if something has high cost and narrow target what is it?
Differentiation focus: Pursuit of differentiation but focused on one segment
How does finance work with Sales and Marketing?
Product life cycles and costing
What is the product life cycle?
- Introduction
- Growth
- Maturity
- Decline
What is product life cycle costing?
Finance considers cost and revenue of a product over its whole life
What is a balance portfolio?
Inform decisions about organisation overall product offering
How does big data analytics help marketing?
Presents huge opportunity to gain useful insight to improve competitive position
What are some examples of big data analytics in marketing?
Market segmentation and customisation: volume and variety enables organisations to create highly specific segment
Product/service department: Use data on behaviour and trends to create new products to meet customer needs
Decision Making: Can improve decision making
Obtaining customer feedback: Organisations have access to feedback in real or almost real time
What are some example of KPI’s within marketing?
Promotion: Promotion Costs, Awareness levels, Social Media reach
Product/service: Life-Cycle cost, Warranty claims, brand value
Pricing: Price relative to industry average, Price elasticity on demand
Place: Transport Costs, Storage Costs
What is HR responsible for?
Management and development of HR within the organisation. Includes Creation, development and maintenance of effective workforce. Matching requirements of organisation to environment and responding to environment.
What is a HR plan?
Strategy developed in the context of organisations overall strategic plan. Typical plan will look forward 3-5 years and aim to close gap between demand for labour and supply of labour.
What are the stages of HR planning?
- Strategic Analysis
- Internal Analysis: audit of existing staff to establish number and skills
- Identify gap between supply and demand: Shortage in labour should be identified
- Put plans into place to close gap
- Review
What is the 7 steps of the HR cycle?
- Recruitment
- Selection
- Training and development
- Performance Management
- Incentives and Motivation
- Reward
- Termination
What is recruitment?
Involves attracting a field of suitable candidates for job
What is the order of the recruitment plan? (5 Steps)
- Agree Vacancy
- Job Analysis: description of tasks that make up the job
- Job Description: Broad statement of purpose, scope and responsibility of job
- Person Specification
- Source Candidates: Involve persuading candidates to apply for role
What is Alec Rogers seven point plan for person specification and the acronym?
BADPIGS
Background/Circumstances Attainments Disposition Physical make up Interests General Intelligence Special Attributes
What does selection involve?
Aimed at choosing the best person for the job from field of candidates sourced via recruitment
What are the methods for selection?
Application Form Interviews Testing Assessment Centre References
What is an application form?
Obtain relevant information about applicant and allow for comparison with person specification
What is involved with selection interviews?
Candidates rejected and remaining ones are interviewed
What is the purpose of a selection interview?
Find best person
Ensure person understands job
What are some options for selection interviews?
Face to face Group Interviews Problem solving Stress Panel Interviews
What is selection testing and the types?
Undertaken before or after interview
Two types are: Proficiency and Attainment, Psychometric
What does an assessment centre involve?
Involves candidates being observed and evaluated by candidates
What may the assessment centre exercise include?
Group discussions Presentations Questionnaires Simulations Games Written tests Speeches
What will assessors be looking for at assessment centres?
Evidence that candidates have certain abilities
What are the advantages of assessment centres?
High degree of accessibility
Avoidance of single accessor bias
Reliability in predicting potential success
What are references for?
To confirm facts about employee and increase degree of confidence
What is training?
Planned and systematic modification of behaviour through learning events
What is development?
Growth or realisation of persons ability and potential
What is the 5 step process of training and development?
- Identify training and development needs
- Set training objectives
- Plan training
- Deliver training
- Evaluate training
What four levels does Donald Kirkpatrick suggest when evaluating training?
- Reaction: how delegates felt about training or learning experience e.g. Interviews
- Learning: Measurement of increase in knowledge e.g. observation
- Behaviour: Extent of applied learning back on job e.g. observation and interview on time
- Results: Effect on business or environment by trainee e.g. impact on KPI’s
What is performance management used for?
Used to access and ensure employee is carrying out their duties in an effective and satisfactory manner
What are the four main steps of performance management?
Set targets: SMART goals and targets
Monitor
Review
Action Plan
What is an appraisal?
Systematic review and assessment of employee performance, potential and training need
What does Lockett suggest are six barriers to an effective appraisal?
Confrontation: Feedback badly delivered
Judgement: One sided process, manager is judge
Chat: Lack of will from either party
Bureaucracy: No purpose or worth, form filling excercices
Annual Event: Ceremony carried out once or twice a year
Unfinished business: No follow up, points agreed not actioned
What does motivation refer to?
Willingness of individuals to perform certain tasks or actions
What are the 5 things of Maslows hierarchy of needs?
- Self Fulfilment: Challenging jobs, achievement in work
- Ego: Merit pay increase, Respect of others
- Social: Friendship at work, Compatible work groups
- Safety/security: Job security, fringe benefits
- Basic/physiological: Basic salary, Safe working conditions
What is a physcological contract?
Outlines perception of employee and employer regarding what their mutual obligations are towards each other.
Highly subjective, not written down.
What does an employee want and what are they willing to give?
They want needs to be satisfied and are willing to offer their energy and talents
What do employers want and what are they willing to give?
Want employee to work hard, will have expectation. Willing to give payment, benefit and other outcomes.
What can workforce flexibility be used for?
Increase employee motivation
How can flexibility in work pattern be acheived?
Remote working
Flexitime: less restriction on when hours are worked
Shift system: working outside of normal working day patterns
Compressed week
Job Sharing: Two employees share a standard work week
Part time
What are two other types of flexibility?
Task or function flexibility
Financial Flexibility
What is task or function flexibility?
Employees have ability to move between task as and when required
What is financial flexibility?
Achieved through variable system of rewards
What is a reward system?
Refers to all monetary, non-monetary and psychological payments that organisation provides
What are the aims of a reward system?
Support overall strategy
Must be affordable
Conform to relevant laws and regulations
What are some methods of a reward system?
Basic pay: minimum amount employee received for working in organisation
Performance-related pay: based on level of performance
What are some type of performance related pay?
Individual: Given to employee on an achievement Group: Based on achievement of group targets Knowledge Contingent Profit related Share Options Commission Piecework schemes Benefits
What are some overlapping responsibilities for HR and finance?
Cost and benefit of recruiting
Impact of HR policies profitability
How is technology helping HR and Finance work together?
Better joined up systems creating better information
Quicker and easier to track and forecast HR information
What are some examples of KPI’s for HR?
Recruitment and Selection: Cost per employee hired, Time to fill position
Training and development: Training Feedback, cost
Performance Management: Appraisal completed on time, Action plan agreed and followed up
Motivation: Turnover rate, Employee satisfaction scores
Reward system: cost of rewards, competitiveness of reward system
What is information system (IS)?
Provision and management of information to support running of organisation
What is information technology (IT)?
Supporting equipment that provides infrastructure to run information systems
What is the IT function responsible for?
Planning, evaluating, installing, operating and maintaining hardware, software, networks and data centres
What is a management information system (MIS)?
Converts internal and external data into useful information. Then communicated to managers for decision making.
What are the four different types of management information system?
Executive information system (EIS)
Decision support system (DSS)
Transaction processing system (TPS)
Expert system
What is an Executive information system (EIS)?
Senior management have access to internal and external information
What is a decision support system (DSS)?
aid managers in making decisions. Predicts consequences of a number of possible scenarios.
What is a transaction processing system (TPS)
Used by operational managers to make decisions. Records daily transactions of an organisation and summarises them
What is an expert system?
Hold specialist knowledge and allows non-experts to interrogate them
How does IT enable knowledge management between functions?
Data: Raw Facts
Information: Processed, organised data
Knowledge: Application of cognitive process to the information so it becomes useful
What are two types of knowledge?
Explicit
Tactic
What is explicit knowledge?
Knowledge the company knows it has
What is tactic knowledge?
Personal knowledge and expertise help by people with an organisation that hasn’t been formally documented
What is knowledge management?
Process for the acquisition, sharing, retention and utilisation of knowledge
What are knowledge management systems?
Refers to any type of IT that helps to capture, store and retrieve and use knowledge to enhance the knowledge management process
What are some examples of a knowledge management system?
Groupware
Intranets
Extranets
Data Warehousing and mining
What is groupware?
Tech designed to help people collaborate
What are extranets?
Intranet to include suppliers, customers and other partners
What is IT Infrastructure?
consists of core networks, databases, software, hardware and procedures managed by IT.
Why is modernisation of IT infrastructure necessary?
To take advantage of data visualisation, AI and blockchain.
What are some things that influence the extent and pace of tech adoption by organisation?
Technical Feasibility Cost of developing, implementing and maintaining new technology Economic benefits Availability of labour skills Regulatory and social acceptance
Technology is now seen as a key component of what?
Business transformation
How can good IT infrastructure enable organisation transformation?
Adoption of new way of working Productivity improvements Flexible working Creating of SSC capability Multi-Source data capture and analysis Visual organisation
What is remote working?
Staff working away from office
What are the advantages of remote working?
Lower infrastructure costs
Increased employee motivation and productivity
Increased commitment to organisation
Reduced staff turnover
What are the disadvantages of remote working?
Difficult to co-ordinate staff
Loss of control of staff
Extra labour costs e.g. providing staff with equipment
What is a virtual organisation?
Outsource most or all of its functions to other organisations with very few functions being kept in house.
What is a virtual team?
Group of people who interact through independent tasks guided by a common purpose and work access boundaries with links strengthened by IT
What are the challenges with a virtual team?
Forming a team Knowledge sharing Processes and goals Cultural differences Leadership: people work at different times Morale
What is customer relationship management (CRM)?
Refers to tech that is needed to gather information to achieve:
Identify, attract and win new customers
Retain existing customers
Entice past customers back
What are some ethical and social issues with IS and data?
Data protection and data privacy
Corporate digital responsibility
What is data protection and data privacy?
Business must ensure its compliant with all legislation but also must consider what is right or wrong.
What is Corporate digital responsibility (CDR)?
Voluntary commitment by organisation to go beyond mere compliance with legislation
What are the ethical and social issues with data?
Legal issues: data may be used or handled in an unlawful way. Resulting in unauthorised access of data.
Ethical issues: Goes beyond legal requirements and considers what is right or wrong for organisation to do.
Social issues: Organisation should make changes that are for the best interest of the society in which it operates
What are the initial cost of new IS?
Cost to design and develop system if bespoke
Purchase price if not bespoke
Purchase of new hardware
Training costs
What are the running costs of new IS?
Labour time to run system
Materials e.g. replacement parts
Service Support
Ongoing costs e.g. cost of quality or security adherence/failure
What are the benefits of new IS?
Speed Accuracy: Reduce human error Volume: Be able to handle large volumes of data Complexity Collaboration Presentation Lowe Costs
What are some threats to the data security and privacy and solutions?
Natural disasters e.g. fire or flood: Fire procedures
Malfunction of computer hardware or software: network design to cope with high volume
Unauthorised access, usage, damage or theft: Personnel controls, Access controls
Viruses: Anti virus software, regular audits
Hackers: Firewall software, usernames and passwords
Human error: Training, Control to ensure only valid data is input
Human resource risk: antiglare screens reduce eye strain, cables in ducts
What is system architecture?
Way systems infrastructure is organised together to support organisations functions and overall goal
What is a centralised IT function?
When whole IT function or the entire IS is based out of a single, central location
What is a decentralised IT function?
When IT function or the IS is spread out through out the organisations location
If IT implement a significant system what would it be treated as?
Treated as a project and finance will form part of the team
What are some examples of why finance and IT need to interact?
Smarter Investment in IT
Information security and compliance
Data Analytics
Cost Benefit analysis
What are some example of KPI’s for IT?
Operational activities: ticket response rates for IT issues sent to IT support, system/technology downtime
Transformational activities: Cost of new tech, IT spend per employee
Strategic activities: Revenue generate by using new technology, Technology leading to competitive advantage
