Strategies Flashcards
List the Operation Strategies
- Performance Objectives
- New product / Service Design and development
- Supply Chain Management
- Outsourcing
- Technology
- Inventory Management
- Quality Management
- Overcomming Resistance to Change
- Global Factors
List the Performance Objectives
- Quality
- Cost
- Speed
- Flexibility
- Dependability
- Customisation
Why are performance objectives important?
Performance goals enable employees to plan and organize their work in accordance with achieving predetermined results or outcomes. By setting and completing effective performance goals, employees are better able to:
- Develop job knowledge and skills that help them thrive in their work, take on additional responsibilities, or pursue their career aspirations;
- Support or advance the organization’s vision, mission, values, principles, strategies, and goals;
- Collaborate with their colleagues with greater transparency and mutual understanding;
What is Quality as an Objective
Meeting customer expectationts such as Durability, Reliability, Consistency, Features Aesthetics, Service.
–> Effects costs - Higher quality = Less warranty claims = less costs (efficiency)
What is Speed as an Objective
Time taken for the production and operations system to respond to market demand
-> Reducing lead times and satisfying customer demands ASAP
What is Dependability (Reliability) as an Objective
Consistency of products -> How well its designed and manufactured
-Warranty claims are a measure of dependability
What is Flexibility (Adaptability) as an Objective
How quickly operations can respond to changes in the market.
By increasing maximum productive capacity, bus. will have more productive resources at their disposal to change.
What is Customisation as an Objective
How quickly a product can be redesigned to match customer demands
-Bus. must have regular and close contact with customers to understand their needs
What is Cost as an Objective
Minimising expenses so that operations processes are conducted as cheaply as possible
- Technology increases efficiency
- Reducing supplier costs, storing / moving costs etc.
- Cost Leadsership
Why is New Product Design important?
- Important for Innovation
- Develop or maintain comp. adv.
- Satisfying customer needs
- Necessary to maintain market share
- NPD used to respond to new technology and changing market conditions
What is the NPD process?
1) Market Research
2) Product Design
3) Prototypes / Feedback
4) Product Refinement
5) Production / Promotion
List some Considerations of NPD
- Costs
- Features
- Differentiation
- Ability to Produce (Necessary equipment to manufacture)
- Ability of Workforce
What does Supply Chain Management Involve?
Involves integrating + managing the flow of supplies to best meet the needs of both the bus. + the customers\
Includes:
- Production Processes
- Suppliers of Raw Materials
- Energy
- Labour + Distribution
What are the 3 Aspects of Supply Chain management?
- Sourcing (Global Sourcing)
- e-commerce
- Logistics
What is global sourcing?
- Bus. purchasing supplies without being constrained by their geographic location
What are the Pros of Global Sourcing
- Higher quality materials
- More variety
- Cheaper products
- Access to specialists
What are the Cons of Global Sourcing
- Risk of lower quality (Unknown quality)
- Storage to store bulk
- Time to import goods
What is E-Commerce
Buying / Selling goods + service via the Internet
What is E-procurement?
Managing supply chain through online ordering
- > Allows direct access to level of suppliers
- > When stock falls to predetermined point, suppliers automatically notified
- > Is a Business-to-Businesses (B2B) arrangement
What is Logistics
Broad term refering to distribution but also includes transport, storage + handling
What are some Storage + warehousing on-costs
- > Insurance (contents insurance)
- > Security systems
- > Excess or redundants stock costs
- > Inventory measurement / controlling costs (management)
What is Outsourcing?
The contracting out of non-core bus. activity e.g. Servicing of Equipment
What are the Pros of Outsourcing?
- Access to specialist knowledge / expertise –> The function is their core bus.
- Lower costs -> contracted bus. can achieve better economies of scale
- Better access to IT, tech and most suitable equipment –> Increase equality / efficiency
- Frees up resources to invest in core. bus. activities
e. g. IT and Banking administration are globally outsourced in India -> Less expensive yet skilled and educated labour with faster turn around times for work.
What are the Cons of Outsourcing?
- Loss of control over quality, reliability and Costs
- Cultural barriers –> Language barriers (miscommunication)
- Poorer relationships with stakeholders and redundant employees –> Ehitcal (CSR)
What is Inventory
- Amount of raw materials, work-in-progress amd Finished goods that the bus. has on hand
What are the Pros of Holding Inventory?
- Consumer demands met when stock avaliable -> low lead times
- Able to generate imediate revenue
- Bulk production -> economies of scale
What are the Cons of Holding inventory?
- Cost associated with holding stock –> Insurance, security, storage
- Cost of Absolescene -> Product becomes irrelevant
- Money invested in stock can be used elsewhere, where more immediate benefits may be gained
What are the inventory valuation methods?
LIFO (last in, first out)
FIFO (First in, First out)
What does LIFO do?
Last goods purchased are sold first
Understates profits + overstates COGS (If prices rise)
What does FIFO do?
First goods purchased are sold first
What is Just in Time inventory management?
JIT aims to ensure that the exact amount of material inputs are avaliable + will arrive only as they are needed in the production process
- > Method of managaing flow + storage of stock
- > Only makes enough products to meet demand
What are the advantages of JIT?
- Resource + storage saving
- Reduced obsolescence costs#
What are the disadvantages of JIT
- Missed sales opportunities
- Requires reliable + trustworthy suppliers
- If mistakes in transformation process, must order materials again
What is Quality management?
Procedures + processes undertaken to ensure product consistency, reliability, safety + fitness for purpose.
List the 3 Quality management points.
- Quality Control
- Quality assurance
- Quality Improvement
What is Quality Control?
Checking for defects at key points in the production process
- Removing defects before they reach customers
What is Quality Assurance
Establishing a set of procedures + standards to prevent defects + errors
-> Preventing quality problems before they occur
e.g. ISO 9000
What is in Quality Improvement
Has 2 Parts:
- Continuous improvement
- Total Quality Management
Describe Continuous Improvement
“Kaizen” - Japanese term used to describe activities that continously improve all bus. functions.
-> Belief that product + service can always be improved (on-going commitment to quality improvement)
Describe TQM
Quality management is placed upon all staff –> Encouraged to take on initiatives that promote quality
Describe reasons for resistance to change
1) Inertia -> Fear of the unknown -> Always safer to keep doing the same thing (psychological resistance to change)
2) Financial Costs:
- New equipment (training costs, etc)
- Redundancies when skills no longer required (payouts)
- Reorganising plant layout (moving costs, lost production time)
List change management strategies
Change models:
- Kurt Lewins (“Ice Model”)
- Force Field Analysis
Describe the Process of Kurt Lewins “Ice Model”
1) Unfreeze - Break down the forces supporting the existing system using evidence such as declining sales to convince the bus. that there is a need for change.
2) Change -> New procedures implemented and communicated
3) Freeze -> Positivie reinforcement to make sure the change lasts and creating stability through training and bus. culture
Describe the force field analysis
A point system, weighing the pros and cons.
Global Factors - What is scanning and learning
- Learning from best practice of others
- Experiences (Diversity in skills allows bus. to grow)
- Conferences / events -> Learn from industry leaders
Global Factors - Research and Development
- Allow bus. to develop leading edge technologies -> comp. adv.
- Government encouraged R & D and may offer incentives such as grants and assisstances (Advice, low interest rates on loans, government gives you money)
