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business y12 > topic 1 operations > Flashcards

topic 1 operations Flashcards

1
Q

operations

A

bus activproduct ities involve transformation of inputs to outputs of g&s (the PP) for manufacturing goods & provision of services

  • apart from transformation (converting inputs to outputs), created value
  • value adding: create extra/added value as inputs transformed into outputs

manufacturing: turning inputs (raw materials) –>, labour, energy, equip) –> outputs (semi/finished goods)

services:
* combining inputs (knowledge, labour, equip) to DELIVER service

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2
Q

customers will demand … from g&s

A
  1. high quality g&s
  2. waste minimal resources in production
  • (overuse staff, overproduce, errors & defects, underuse machinery) –> lean production
  1. reflect fair value for labour used
  • consumers more aware of conditions g&s produced esp in low cost developing c’s
  • pay & treat employees fairly
  • bus increasingly concerned with ethics of PP & suppliers –> ethical sourcing
  1. operate at low cost to maximise affordability
    * consumers also consider price when choosing
    * highly comeptitivce markets bus try capture market share by lowering prod costs to lower prices
  2. integrate enviro awareness & ecologically sustainable practices
  • consumers ^ concern abt enviro & want bus to operate in this manner
  • reduce GH gas emissions, waste, electricity use, use recyclable materials
  1. reflect changes in consumer needs over time
  • w/ constant tech adv, –> bus invest resources to develop innovate products
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3
Q

ethical issues a (burger) bus must consider

A

products may damage health,

  • ensure menu not advertised largely to children bc society, health concerns arise eg. heart disease if overconsumed
  • ignoring = neg publicity & cant achieve marketing objs (eg. expand product range)

truth & accuracy

  • ensure ‘oversized’ food meet customer expectations (cant deliver small)
  • ignored –> neg brand awareness –> lose sales –> hinder profit maximisation
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4
Q

ethical sourcing

A

bus choose suppliers engaging in ethical conduct

  • pay fair wages
  • enviro friendly practices
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5
Q

lean production

A

appraoch to eliminate waste & improve efficiency –> greater profits (bus) & lower prices (consumers)

  • bus can reduce waste & satisfy growing consumer demand for sustainable use natural resources
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6
Q

strategic role of operations management

define cost leadership and differentiation

A
  • (all): ensure decisions contribute to strategic direction of bus & achieve bus’ strategic goals in bus plan –> how op affects other functions & how contributes to bus’ S&LT goals changing bus enviro (all strategic decisions to lower cost, ^ efficient use resources, differentiate products (if can), comp adv
  • allocating resources so bus meets customer needs, cost leadership & differentiating g/s
  • improve efficiency, productivity, competitiveness, quality outputs
  • cost leadership: (control costs by streamlining processes, reduce waste, optimise resource use) offer g/s at lowest (by lowering costs) prices than comp while maintaining profitability & quality lvl, –> comp adv (pass cost savings to customers as lower prices)
  • mainly use least inputs possible to produve given output w/ same quality (efficiency)
  • use standardisation –> EoS
    g/s differentiation: distinguish product from competitors so consumers perceive they better –> comp adv ( quality, innovative features, unique customer experiences)
  • goods diff: appearance, augmented features, quality
  • services diff: amt time spent, qualifiation & experience of provider, quality of tech used in delivery
  • responsive to changes in customer demand, market trends, tech adv
  • sustainable eg. reduce carbon footprints, minimise waste, eco-friendly materials –> social & enviro responsibilities –> brand reputation
  • CL & DIFF dont contradict, pursue cost leadership souldnt ignore importance of diff bc major opp to maintain competitiveness. BUT can only pursue 1 AT A TIME as MAIN strat
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7
Q

strategic

A

long term, broad aims of each functions contributes to strategic plan of bus
* lvl affects OMFH > length time

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8
Q

general overarching goal of business is to ….. which is usually done by focusing on 2 important aspects of profit….

A

to maximise profits

  1. revenue/income
    * maximised to bring greatest possible volume of money
    * financial and marketing
  2. costs/expenses
    * minimised to reduce overall lvl
    * not just HR and operations bc all aspects of bus incur costs
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9
Q

profit centres & cost centres

A

profit centre
* aspects of business directly generate revenue & profits (income)

cost centres
* departments of bus dont directly generate incoem but incur costs eg. operations function bc manage costs

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10
Q

diff types of costs

A

INPUT
*land, resources, interest on investment, leases on machinery

LABOUR
* full, part, casual emp, subcontractors, recruitment & training, redundancy, overtime

PROCESSING
* electricity, machinery maintenance

INVENTORY
* distribution, storage,

QUALITY MANAGEMENT
* quality planning/training, inspection of goods & PP, remediation via. sales returns

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11
Q

cost leadership

A

aiming to have lowest costs in an industry –>most price competitive bus in market
* if cost leader, develops comp adv over rivals, attract customers by offering lower prices while still profitable
* ops managers must improve efficiency by using least amt inputs (volume & $ value) possible to produce given lvl output
* 1 way by creating ecos of scale: cost savings/advs from producing on larger scale as fixed costs spread over more units of output & inputs purchased in bulk at discounts

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12
Q

balancing betw cost and quality in operations

A
  • minimising costs vs maximising quality of output vary betw bus depending if aiming to develop & sustain comp adv based on price/cost or differentiation
  • standard of materials, labour, speed of equip rises –> product prices ^
  • need decide lvl quality –> lvl costs
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13
Q

product differentiation goods vs services

A
  • distinguishing g/s from competitors (quality & image), –> charge higher prices & still attract customers
  • most bus produce combo of g&s (restaurant)
  • more imp for bus’ not cost leaders in their industry
  • services dont exist prior demand

TANGIBLE/PERISHABLE

  • goods physical dimension can be stored, touched
  • services only exist while being performed but effects may endure after completion

CUSTOMISATION

  • goods standardised usually
  • services customised but may be standardised
  • varied according to needs of customers, produced with a market than prod focus

TIME BETW PRODUCTION & CONSUMPTION

  • length time betw prod of goods and consumption larger
  • prod services & consumption simultaneous

DETERMINE VALUE

  • goods value ascertainied via inpute csts (labour cost, metarials, transformation) + margin (profit)
  • value subjective depends on market, but ^ w/ service provider’s high skill lvls, (edu, exp)
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14
Q

standardisation & customisation (goods in diff industries)

A

producing g/s homogeneous/identical
* mass produce items w/ no variety at low cost per unit usually on assembly line
* directly related to cost savings from ecos of scale
* services to ensure consistency of quality
* predetermined lvl quality, produced with production focus

customised goods vary according to customer needs

  • produced w/ market focus than production focus
  • prod costs lower for standardised g&s than customised due to ecos of scale & faster processing
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15
Q

product differentiation ways

A
  1. varying the features of the product
    * goods have basic form w/ sophisticated options available which carry higher price (eg. cereal with fruit)
  2. varying product quality
    * make low quality, affordable model –> ^ quality (higher price), innovation
    * often sold under diff brand name to create diff product images to maximise market share by appealing to broader range consumers based on income lvls, budget, taste, etc
  3. varying any *augmented features
    * add-ons usually for electronics/vehicles (build in gps)F
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16
Q

differentiation of services ways

A
  1. varying the amt time spent on a service
  • eg. delivery in a day
  1. varying the lvl expertise of a service
  • service providers w/ higher expertise can offer more specialised service
  1. developing self-service options, flexibility (?)
  • customers look for flexibility in when & wherethey access services
  • encourage customers to take initiative eg. self-service checkouts
  • greater convenience for customers, quicker operations processes & cost savings (lower staffing requirements & allow bus to close some physcial stores)
  1. vary qualifications & experience of service provider
  • more qualified & experienced can offer higher quality service
  1. vary materials/tech usedi n service delivery
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17
Q

for g&s, differentiation can be created through 2 things

A

cross branding marketing strat 2/+ brands collab to promote g/s together

  • use reputation, consumer base both to create unique value proposition
  • enhance brand visibility, market reach eg. partnerships w/ companies
  • products differentiated but not from product itself but extenal factor into mix

strategic alliance formal agreeent betw 2/+ companies to collab & pursue material goals while remaining independent
* not mergers/acquisitions bc allow share resources & markets w/o fully integrating their ops
* joint ventures (create new bus entity share ownership)
* enter new markets, innovation, reduce risks, ecos of scale, diversify revenue streams

  • adds value to products by offering customers added benefits
  • while no actual product diff, customers attracted/maintained by offering added benefit
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18
Q

operations processes for perishable goods need

A
  • high standards of quality, safety, cleanliness
  • very short LEAD TIMES (amt time betw process initation & execution eg. order placed & delivery made) + efficient distribution
  • robust packaging and cold storage throughout prod & distribution
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19
Q

perishable goods vs non perishable goods

A
  • short lifespan & consumed quickly (mostly food)
  • relatively inexpensive & bought on regular basis
  • non perishable goods ineherently more durable so expected to last longer
  • non persihable produced in many diff industries
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20
Q

what are the operations processes like for non perishable goods?

A
  • manage all aspects quality thorugh PP (sourcing inputs to prod & distribution)
  • effective inventory management strats
  • highly responsive to market demand to minimise waste
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21
Q

intermediate goods

A

multiple transformations for final product
* gone through 1 set of operational processes and become inputs into further processing

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22
Q

what will a business do if it is not large enough to operate each OMFH?

A

perform only 1 or 2 functions most competent and hire services of other businesses to perform other areas

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23
Q

operations & marketing interdependence

A
  • by researching lvl consumer demand & identifying needs of target market for products, marketing informs ops what & how much to produce
  • determine product designs used by ops & scale of bus ops
  • dependent on ops to perform 4 P’s, relies on efficiency & effectiveness of ops:
    1. product (output match design specifications & meet customer expectations associated w/ brand image)
    2. price (base pricing decisions on producti mage & desire to max sales depends on ability ops to minimise prod costs)
    3. promotion (persuade target market to purchase products simple when output high quality)
    4. place (makep roducts easily available when & where demanded depends on timely completion of ops processes)

promoting, selling, distributing g/s to consumers by understanding cust needs & pref, create value for them & communicate in way infleunces purchasing decisions
* to connect w/ target market & build LT relations to ^ sales & brand loyalty
* highly specialised field looks all aspects buying & selling (eg. psychological)

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24
Q

market research

A

understand customer needs, market trends, competitors by collecting & analysing data to identify opps & tailor to meet consuemr demands

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25
Q

operations & finance function interdependence

A
  • ops relies on finance to provide funds for production
  • finance allocates budgets to ops & raise funds for projects eg. purchase new machinery to produce new product/expand output
  • finance monitors input use & output to measure effectiveness of ops, providing data to determine corrective action required
  • finance depends on ops performing its role effectively to achieve profitability
  • maxing profits depends on ability of ops to minimsie prod csots –> ^ margin sales revneue exceeds input costs , expand volume output (generate higher rev by ^ amt g&s sold) or quality (generate higher rev by allowing more products sold at higher prices)

recording & summarising financial transactions into reports to interpret
* income statements determine amt money bus earned after expenses / balance sheets / budgets for decision making witin & outside bus

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26
Q

operations & human resources function interdependence

A
  • ops relies on HR to recruit, train & develop, motivate & retain valuable staff by providing non & monetary benefits
  • otherwise ops bottlenecks bc understaffing/lack necessary skills –> reduce volume &/quality of output
  • decisions around acquisition, development, maintenance & separation often determined by op decisions (expand production/outsource part of ops process)
  • achieving HR obj depend on effectiveness of op process (on-the-job training)
  • labour productivity (key obj) depends on well-organsied PP impact other HR objs (bus culture, staff turnover, absenteeism, workplace accidents, worker satisfaction, disputes
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27
Q

how globalisation affects operations + opps & threats

A

removal of barriers of trade betw nations, from increasing integration betw national ecos and high transfer of capital, labour, financial resources, tech

  • source of market opp from nations
  • new customers in overseas markets
  • access new tech
  • access finance from overseas sources
  • able source cheaper inputs overseas (supplies, labour) to lower prod costs
  • if expand by capturing share of global market, can mass produce & achieve ecos of scale

main disadv is exposure to comp from overseas bus’

  • orient practices towards global market to meet needs of global consumers (via product design, location of manuf facilities, quality &, inventory management)
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28
Q

2 ways external influences impact operations

A
  1. force bus to undergo change & continually adjust to external factors
  2. opps & threats to ops
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29
Q

globalisation

A

^ interactions betw nations

  • driven by advs in transport (airplanes), communications (phones, internet), tech bc remove barriers betw nations created by distance
  • greater movement g&S (trade), ppl, financial capital (investment), info & ideas betw nations
  • tech central role in glob process but also facilitated by gvts who relaxed policies previously barriers to free movement across national borders
  • tariffs - more expensive & encourage consumers buy dom produced goods
  • quotas
  • subsidies - gvt grants to bus to encourage operate in c/help compete w/ overseas comp
  • embargos & licensing - embargos ban import of goods from certain c, producers require license to export goods to certain c, no. licenses limited
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30
Q

how tech influences operations

A

tech is the design, construction, application of innovative methods, machinery on op processes.

  • both opps (new prod methods –> comp edge)/threats (rivals adopt leading edge)
  • reduce prod costs, ^ consistency of output, ^ speed of prod, greater customisation of output, easier communication
  • admin: organisation, planning, decision making (planning tech eg. CPA & gantt charts [s&s], office tech, software (spreadsheets))
  • processing: manuf, logistics & distr, quality & inventory management, SCM (machines in manuf plants eg. assembly line prod, robotics in PP for precision, CAD, CAM,
  • lo-tech/hi-tech
  • latest tech to remain competitive
  • service bus, ICT ^ productivity & efficiency, open new markets by allowing global trade
  • cost of new tech high so lease > buy
  • office tech enable ppl do more work in less time,** telecommute (work from home), conduct meetings** via videoconferencing
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31
Q

how quality expectations influence operations

A

quality: how well designed, produced & functional goods are and overall deg of competence services
organised & delivered to meet customer demands

  • customer satisfaction for customer loyalty
  • consumer expectations determine way products designe,d created, delivered meet & exceed standards –> use high-quality materials, adv tech, or skilled labor.
  • quality control checks. implement **systems like (TQM) to ensure consistent product quality.
  • fail to meet expectations customer dissatisfaction, brand damage, and lose comp adv
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32
Q

quality expectations with goods vs services

A

GOODS
1. quality of design

  • evident innovation, minimise waste, concept, account customer needs & expectations
  1. fit for purpose, (if easy to use, how well product does what it’s designed to
  2. durability
  • reliable, long lasting, repaired and maintained easily, warranty claims

SERVICES
1. professionalism of service provider

  • cleanliness, layout of facilities, staff courtesy, interaction
    2. reliability of provider
  • how efficiently service performed, lvl competence
    3. lvl customisation
  • how well customer needs fulfilled by applied expertise & experience
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33
Q

how cost based competitiion affects operations (define, fixed + variable)

A

when comp in a concentrated market forces lower output prices

  • in comp markets, cant continue ^ prices w/o product diff –> CBC when diff **^ sales volume/price **
  • tension betw operating at lowest cost and offering customers highest quality
  • via thin profit margin/cost-minimisation (EoS, leading edge tech, cut overheads)
  • 1 way take adv new tech & improve quality while reducing costs is mass customisation combines flexibility & personalisation of customised products with low unit costs of mass produced standardised products using flexible CAM systems (robotics modify features of ind produced on assembly line be performing diff activities on each roduct based on ind customer specifications
  • related to cost leadership but if bus competes on costs not necassarily cost leader
  • fixed costs not dependent on lvl operatning activities (whether inc/dec/maintain output, unchanged
  • variable costs change directly w/ output lvls (labour)
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34
Q

how gvt policies influence operations

A

affect bus regulation and management

LOCAL

  • plan w/ state gvt in NSW to decide abt zoning of land, enviro planning policies & development
  • regulation & provide infrastructure: parking, footpaths
  • health regulations (eg. sell food)
  • waste disposal services

STATE/TERRITORY

  • develop transport infras (railways, roads)
  • provide public transport
  • regulate public utilities (water, electricity,
  • laws (WHS, enviro,)

FEDERAL

  • consumer, enviro protection
  • trade (imports & exports)
  • taxation
  • bankruptcy & insolvency
  • industrial relations
  • TNCs in AUS
  • change over time due to change in gvt/social expectations –> gvt policy influence ops
  • positive (grants encourage activities to promote eg. expand to new export markets, R&D IN RENEWABLE ENERGY)
  • neg (RESTRICT ACTIVITIES, HIGHER COSTS, ^COMP)
  • climate change last 10-15 yrs, carbon tax charged on amt carbon ops produces
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35
Q

how legal regulation affect operations

A

regulations must be followed otherwise risk penalty
* compliance costs expenses of meeting legal requirements, abiding by laws)

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36
Q

legal regulation relevant laws relating tolabour and environment/public health in transformation process

A

ext influence makes clear societal standards (of behaviour) that bus expected to comply w/. expenses of meeting requirements of legal reg are compliance costs
**
* WHS using machinery, working conditions giving employees safety training, protective equip
* enviro protection (minimise pollution)
* local gvt reg (zoning, licencing)
* product safetly laws
* public health (safety standards)

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37
Q

how enviro sustainability influence operations

A

business ops should shape around practices that consume resources present w/o compromising access for future gens
* rise in climate change need to integrate LT sustainable resource management
* minimise waste, recycling water, glass, paper, metal
* reducing carbon footprint (amt carbon produced enters enviro from op proc)

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38
Q

3 main aspects of enviro sustainability

A
  1. sustainable use of renewable resources
  2. reduce use of non renewable assets
  3. applying precautionary principle
    * when enviro impacts uncertain, bus appraoch way least enviro impact
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39
Q

aka triple bottom line

how CSR affects operations

A

open & accountable bus actions based on respect for ppl, community, enviro by doing more than complying with laws & reg

  • values financial profitability with social responsibility and enviro sustainability
  • profitability not only driver of corporate decision making
  • manage effects of activities on society/environment to minimsie neg impacts
    must understand where and how inputs sourced so know suppliers adhere to labour & enviro standards
  • processes to minimise enviro damage & waste
  • recruitment practices involve diverse employeees, inclusive
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40
Q

triple bottom line

A

financial profitability, social and enviro impact of bus

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41
Q

diff betw legal compliance and ethical responsibility

A

legal compliance require bus to follow laws as standards of behaviour whereas ethical responsibility where bus meets legal obligations and further follows intention of law

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42
Q

ethical responsibility

A

values more than earning max profits, commit beyond expectations to benefit society in present and future
* incur sig costs, lowest necessary compliance costs possible

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43
Q

examples of compliance

A
  1. labour law compliance
    * min wages, working hrs, leave, on-costs, WHS laws
  2. taxation
    * super, taxes on profits
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44
Q

how do business reduce compliance costs

A

structure operations so diff aspects conducted by outside parties
* outsourcing use outside specialists to undertake 1/+ OMFH
* on/offshore, onshore use domestic bus as outsourcing provider, offshore take activities to provider in another country

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45
Q

offshore outsourcing dis/adv (check)

A
  • takes adv regulatory differences betw nations
  • diff compliance requirements allow bus take adv of significant cost savings (lower tax rates, standards of labour, weaker enviro regulations) reduce compliance costs
  • ethical issues, 3rd party cn hide so breaches of compliance in other nations can be passed to contractor operating in its local market w/o legal responsibility for bus outsourcing prod
    • diffs in language, –> delays, errors, misalign expectations, real time comm diff when operating across time zeons for decision making & responsiveness
    • c’s w/ less cybersecurity protections risk sensetive data, diff protect intellectual property if law enforcement weak
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46
Q

how ethical responsibility affects operations

A

businesses go beyond the law and account broader social and enviro concerns

  • go beyong compliance costs (requirements of legislation) more expensive, showing it values more than earning max profits bc allocates funds above costs to comply w/ law
  • CSR ILO (UN agency) guide decision making so ops meet ethical standards, use SLAs min standards service ensure outsourcing providers adhere to high standdards conduct
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47
Q

methodical approach

hwo enviro sustainability affect ops (ethical appraoch to ops)

A

prod methods use resources present w/o limiting ability future gens to satisfy needs & wants (degrading air, water, forests)

  • bus owners & gvt legislationadopt policies of conservation, recycling, restoration
  • growing consumer expectation of ‘clean, green and safe’ products, adopt greenhouse reduction measures, develop LT sustainable strats
  • consider establishing enviro management system EMS for methodical approach to enviro impact
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48
Q

achieves 2 goalas simultaneously

how does social responsibility affect ops (ethical approach to ops)

A

bus’ management of social, enviro, political, human consequences of actions in addition to profit
1. expansion
2. greater good for society

  • customers stop buying if learn emp exploited, polluting enviro directly*/in via contracting out prod)
  • customers reward by purchasing more prodcts
  • costs money ST but LT enable marketing opps that communicate bus’ virtues driven by social & enviro goals
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49
Q

Internatioanl Labour Organisation (for ethical responsibility)

A

articulates labour standards to workplaces and employee rights (working women, maternity protection, safe work conditions)
* nations expected to pass laws consistent with international labour standards

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50
Q

what are inputs and common direct inputs?

A

resources used in the transofrmation (prod) process, some owned others provided by suppliers

  • labour
  • energy
  • raw materials
  • capital equip (machinery, tech)
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51
Q

labour’s role as a common direct input in the ops process

A

mental & physical human effort. * areas of sourcing and supply chain
* maintenance for machinery
* inventory management and control
* wuality processes
* logistics & districution
* production

closely aligned to all apsects of bus ops

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52
Q

energy as a common direct input in ops process

A

in form of electricity/fuel converted into heat, light, sound

  • to bring inputs to bus, transform and distribute to consumer markets
  • value adding directly prop to amt energy expended
  • recently bus implement energy saving measures to reduce costs and GH emissions to pursue alternative energy sources
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53
Q

raw materials

A
  • sourced through the supply chain,
  • for manufactured goods: wood, unprocessed agricultural produce, natural resources (minerals, fossil fuels, water)
  • sometimes partly processed/intermediate materials as inputs eg. cotton –> cloth
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54
Q

machinery and tech as common direct inputs in ops process

A
  • aka capital equip processes raw materials, design, make products
  • integrate with tech to perform complex tasks quick
  • capital-labour substitution machinery & tech replace workers but period retraining to acquire skills to use new tech
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55
Q

transformed resources

A

inputs converted in ops process
* materials
* info
* customers

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56
Q

materials as transfromed resources

A

basic elements used in PP with 2 types
raw materials
* essential substances in unprocessed, natural state from mines, forests, oceans, recycled waste

intermediate goods
* unfinished goods undergo further processing
* already transformed but still inputs

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57
Q

info as transfroemd resource

A

knowledge gained from research, investigation for increased
understanding determine how inputs used, sourced, etc

  • design processes create most products msot cost effective (msot profitable)
  • value relies on ability to influence decision making
  • come from INTERNAL/EXTERNAL sources (internal: financial reports, KPIs)
  • transformed resource when analysed > compiled
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58
Q

when is it transformed?

external vs internal info

A

internal info
* comes from w/n bus & gathered from internal sources (financial reports & key performance indicatoRS KPI eg. inventory turnover rates)
* customer feedback via analysis of warranty data/social media
* acts as transformed resource when informs and improves process

external info
* info from market, industry stats, ABS
* useful to integrate relevant info into ops process eg. info on new tech influence which machinery purchased and way applied

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59
Q

customers as a transformed process

customer orientation

A
  • transformed when choices shape inputs
  • their interaction, feedback, or involvement directly contributes to shaping improving products or operations, undergo changes themselves and add value to the business
  • consumer orientation: takes preferences and interests of consumers as starting pt to PP, acts as input and preferences as transformed resource
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60
Q

customer orientation

A
  • needs, preferences, satisfaction of customers prioritized in every aspect of decision-making & operations.
  • aligning the company’s g&s, marketing strats, & customer service to delivering value and meeting customer expectations
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61
Q

what should be implemented to track changing consumer preferences?

A
  • implement customer relationship management CRM program: systems to maintain customer contact (customer service, competitiveness, identify changes in consumer tastes)
  • improves services, reduce prod costs, customer feedback mroe responsive to preferences
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62
Q

transforming resources + 2 main

A
  • inputs that carry out transformation process, enable change and value adding
  • carry out change instead of being changed ( transformed resources) to produce the g/s
    1. human resources
    2. facilities
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63
Q

HR as a transforming resource

A
  • capable workers higher productivity to ops
  • determine success in transformation & value adding
  • apply their labor, skills, and knowledge to drive processes, manage operations, create value
  • emp who coordinate resources (machinery, raw materials, finance to produce g&s
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64
Q

HR as transforming resource and strats to improve

A

employees coord & combine other inputs/resources (machinery, tech, raw materials, finance) to produce g&s –> efficient transformation & value-adding

  • most important input
  • qualified, disciplined staff –> productivity to ops, successful transf processes & ^value adding –> recruitment, training, motivation, retention of valuable staff imp
  • set perf objs for ind staff
  • adhere to WHS standards (morale, productivity, accidents)
  • flexible work practices
  • open communication & motivation
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65
Q

facilities as a transforming resource

A

plant (factory/office) and machinery used in ops processes

  • decide no. facilities used, layout, location (cost-effective location (rent/mortgage) but diff for suppliers, staff, customers to access)
  • future potential for expansion
  • layout: msot efficient, safe method ofp roduction
  • whether located in 1/2 large sites/ divide among many smaller sites
  • zoning on faciltiies size & location
  • arrange machinery, equip and ppl w/n facility
  • turning raw materials, or information into final g/s
  • plant & machinery selection affects capacity to transform. facilities integrated modern tech and promote (well designed) positive workplace culture for staff –> productivity
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66
Q

transformation for services

A

transform inputs into intangible outputs, rely on interaction w/ customer

  • labour-intensive processes as staff
  • service provider applies time, skill, exp assist consumers to improve QOL
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67
Q

influence of volume in transfrmation

A

how many g/s produced by ops process

  • high volume –> standardised products & workers perform simple, repetitive tasks
  • low colume –> customised products & emps perform many diff tasks requiring diff skills
  • volume flexibility: hwo quick transformation process can adjust to inc/decrease demand
  • responsiveness to manage lead times (time takes to fulfil order from moment made
  • if cant quickly adjust to market demand, overproduce –> waste, ^ inventory costs
  • cannot quickly fulfil –> lost sales, competing bus
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68
Q

mix flexibility

influence of variety in transformation process

A

how many diff types g/s produced by bus
mix flexibility: bus can offer wide variety choice in its mix of products/services delivered

  • consumers know as product range/choice
  • greater variety –> cater mroe to ind customer needs –> flexible, complex, costly per unit ops process
  • low variety: relatively high volumes of limited range of products
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69
Q

when is ^demand problematic and what does decreased demand require

influence of variation in demand in trans process (increase/decrease demand)

A

how much lvl customer demand for bus’ products changes over time

^demand problematic:

  • predict demand & necessary inputs (raw materials) from suppliers, labour (available, skilled)< faciltiies (enough capital equip eg. machinery to ^volume production)
  • suppliers cant deliver quick enough
  • labour not skilled, available in adequate nos.
  • machinery cant adjust to ^ requirements (not capable/unreliable)
  • ^energy requirements not accessible

decrease demand need operational flexibility

  • staff nos. may be reduced
  • prod slowed
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70
Q

variation in demand (anticipating) for trans process

A

how lvl demand for bus’ products changes over time (pre-emptive approach, forecast demand to adjust)

  • msot bus prefer low variation/predictable demand(not affected by seasonal changes/lvl eco activity) bc problems of under & overproduction.
  • too much –> unnecessary input costs, waste, ^ costs storing inventory
  • not enough –> lose sales & market share bc customers buy from competitors
  • bus w/ high variation in demand mroe affected by 1 or both factors eg. restaurant
  • operational flexibility: ^demand –> ^inputs from suppliers, labour, energy, machinery, decrease demand –> reduce staff hrs, slow prod to avoid inventory, suppliers pressure due to contracts
71
Q

influence of visibility (customer contact) on trans process
in/direct

A

how much of ops process customer exposed to

  • eg. hairdresser high visibility bc customer present entire ops process, but manuf cupboards ops in factory low visibility
  • service providers higher visibility > manufs –> speed important (customer lead times)

feedback direct effect as customers and preferences shape prod decisions. to maximise sales

direct customer contact

  • cust feedback via surveys, interviews, warranty claims and verbal

indirect customer contact

  • feedback from reviewing sales data for indication of cus preferences/market share by observing consumer reviews
72
Q

if bus has high/low volume, high/low variation (in demand) and high/low visibility, more likely to be low-cost business

A

high volume
low variety
low variation in demand
low visibility

low cost bc:

  • operate high volume w/ low variation in demand –> EOS
  • tasks performed by workforce simple & repetitive –> lower lvl skill & training
  • low visibility –> lower costs bc fewer resources to manage customer

higher costs justified if opposite if generate higher rev & profits despite higher costs

73
Q

sequencing and scheduling in trans process + 2 SCHEDULING tools + how they improve effieicny of ops process

A
  • structuring and ordering trans proc.

sequencing: order of activities in operations process

scheduling: length of time activities take w/n ops proc
* 2 scheduling tools (gantt charts & critical path analysis CPA
* operations manager understanding both processes can enhance efficiency & effectiveness of ops process, utilising tools eg. Gantt Charts & CPA to plan order & process to ensure improve quality, speed, customisation, production costs hence improve efficiency

74
Q

gantt chart

A

visual project schedule outlines activities need to be performed in order of occurrence and how long each activity expected to take

  • for scheduling simple routine tasks or complex projects, schedule work activities of 1 emp/team)
  • illustration of when tasks should start & finsih, track progress & meet deadlines.
  • tasks are horizontal bars, length is time required to complete task
  • timeline across top (days, weeks, months,) show when each tasks start & end.
  • Arrows between tasks show which tasks must be completed before others can begin)
75
Q

2 main adv of using Gantt charts

A
  1. forces manager to plan steps to complete task and specifies time required for each task
  2. easy to monitor actual progress against planned activities –> projects running on time
76
Q

critical path analysis CPA

A

scheduling method shows what tasks need to be done, how long each takes, order to complete

  • some tasks perf simultaneously if not dependent on each other (concurrent tasks)
  • to identify the sequence of tasks that must be completed for a project to finish on time.
  • help determine critical path: longest path of tasks that, if delayed, would delay entire project.
  • any delay in tasks directly impacts the project completion date.
77
Q

3 benefits
of Critical path analysis CPA

A

scheduling allows manager to identify what needs to be done and timing of tasks
* info to see order of activities and which tasks can be done simultaneously
* scheduling gives direction and organisation to op proc, coordination

78
Q

business tech for manuf and services sector and why its important for modern businesses

A

use machinery & systems to undertake transformation process effectively and efficiently

  • acquire up-to-date tech to compete
  • for manufacturing sector, used to speed up processes and completely utilise raw materials (cost-effective)
  • services sector communications tech enable whole markets open up and allow SMEs to trade globally
  • scissors low-tech whereas pc hi-tech
79
Q

costs of using tech in op processes

A
  • high costs, business decide whether to purchase/lease (leasing more common cheaper as lease payments are** tax deductible,** allows to save money and spend elsewhere.
  • other costs displacement of workers but if not, costs of re/training to upgrade skills
  • time lose adapting to new work techniques
80
Q

office technology

A

developments create opp for ppl do more work in less time, ^ range of tasks completed
* office workers can work greater distance from office
* ppl telecommute (travel to work electronically, home or another location becomes worksite and work deliviered via internet) and work from home

81
Q

3 manufacturing tech

A
  1. robotics
  • highly specialised forms of tech capable of complex tasks
  • engineering and specialised research, assembly lines with programmable machines
  • shape transformation process to achieve high standard quality consistently, minimise waste
  1. computer aided design (CAD)
  • computerised design tool to design products in 3D diagrams from series of input data to view from multiple angles
  • range bus sizes & types
  • assists designer to visualise product
  • cost of project quantified but if too high/design too limited, input data can be altered
  • easy to customise options that meet client needs
  • designs sequence of steps to create good in shortest possible lead time using least amt material
  1. computer aided manufacturing CAM
  • use pc systems & software to automate manuf process
  • enhance accuracy, reduce errors, speeds up prod by ensure machines follow design specifications
  • flexible production w/ customised products
  • calculate quantity of each input required in production
  • can store historic purchasing records for decision making
82
Q

task design

A

classifying job activities to make easier for employee to successfully perform and complete task to contribute org’s objs(efficient)

  • define, organise, tasks within job to ^ efficiency, productivity
  • determine activities, skills, resources needed, sequence tasks performed
  • interdependence with HR of (before acquisition: job analysis, job description & person specification) (recruitment?)
  • employee** screened against skills and competencies** to ensure match
  • PROCESS, PRODUCT, FIXED POSITION LAYOUT
83
Q

WDDAQ

5 steps of task design process

A
  1. define what needs to be done
  2. analyse job into specific duties
  3. determine difficulty and allocate time
  4. match tasks to awards eg. $30/hr 1st year licensed electrician
  5. articulate types skills/exp, qualifications to complete task
84
Q

skills audit during task design

A
  • if business has staff but no skills for circumstances
  • formal process to determine present lvl skills of staff, skill shortfalls to address through recruitment/training & development
  • identify strengths & weaknesses, skills gaps for perf & growth
85
Q

process layout in the transformation process, include workplace layout options

A
  • process layout
  • product layout
  • fixed position layout
  • arrange machines and group equip together by function/process they perform
86
Q

define process production

A
  • process production deals with high variety, low volume production(??)
  • most suitable for process layout
87
Q

what is process layout for intermittent production in the transofmration process

A
  • arrange resources by task/process for process production
  • goods produced in low volumes customised orders (high variety) than in continuous flow ( like process prod)
  • process layout for intermittent prod is arrange resources (ppl, machine) based on function/sequence than product
  • when diff types products/variations to produce (flexibility)
  • process not standardised, materials may move from diff departments non-linear way
  • for SMEs, eg. schools hospitals
  • service bus use to handle customers w/ diff needs
88
Q

prduct layout from process layout (define product/mass production and product layout)

A
  • equip arranged relates to (linear) sequence of tasks performed in manuf product eg. assembly line for mass production of high volume goods consistent quality (standardisation)
  • each station performs specific task (specialise)
89
Q

fixed position layout from process layout (define project production and fixed position layout)

A

project production deals with layout requirements for large-scale, bulky activities eg. construction of bridges, ships, aricraft/buildings
* more efficient to bring materials to site
* workers and equip come to one work area

fixed position layout where a product remains in one location due to weight/bulk

90
Q

office (process) layout

A

organise workspace for smooth flow of activities & improve efficeicny by grouping tasks completed in a sequence.

  • organised around discrete workstations (each employee has pc, keyboard, telephone, close access to printer)
  • tailored to bus needs
  • for manuf bus, informal, overlook factory floor for managers to supervise from desk
  • allow smooth workflow,
  • many bus redesign offices w/ fewer desks & mroe collaborative, shared spaces
91
Q

monitoring infleuncing op processes

A

measure actual perf against planned perf
* measure all aspects of operations
* arranged to measure KPIs (predetermined variables measured so control for op proc can be made)
* monitoring KPIs assess perf against target lvl perf

92
Q

control influence op processes

A

when KPIs assessed against predetermined targets & corrective action if required

  • compares what intended to happen w/ what occurred
  • discrepancy betw perf & goals, corrective action for improvement
  • change trans process eg. redesigning facilities layout/adjust lvl tech to correct problem usually quality
93
Q

control, monitor, improve

improvement influence op process

LPQCE

A

systematic reduction of inefficiencies & wastage, poor work processes & eliminating bottlenecks (aspect trans process slows down processing speed/impediment leading to excess incompletely processed products)

  • lead time: via minimising bottlenecks
  • , process flows: smooth transitions betw diff stages of transformation
  • quality: quality control, assurance, improvement (TQM)
  • cost: assess per unit prod cost by reviewing fixed & variable costs
  • efficiency: reduce waste & ^output per unit input,
  • continuous improvement involves ongoing commitment to acheive perfection
94
Q

outputs as an operations process + subtle outputs

A
  • outputs are result of bus efforts as final g/s provided to consumer
  • outputs must be responsive to customer demands
  • subte outputs eg. customer service ( how well bus meets & exceeds expectations of customers in all aspects of ops), warranties (bus promise to correct defects in g/s)
95
Q

customer service as outputs in operations process

A

activities bus offers customers that add value to product (Delivery, warranties, etc)

  • if custoemr expresses dissatisfaction w/ good (defects, not meeting quality expectations), lead/wait times too long, returns, warrantly claim, op process needs review
  • ensure correct g/s provided at right place right time
  • can charge higher price, grow faster than comp, increase market share & profits
  • to maintain existing & attract new customers, need to communicate w/
  • attitude adopted by all employees, key to develop LT customer relationships
96
Q

warranties as subtle outputs in ops process

A

promise made by bus to correct defects in g/s deliver within PIT

  • warranty/guarantee product fit for purpose –> offer written warranty for POT, if defective beyond period, can be legally obligated refund, repair, replace if court believes shouldve lasted longer
  • measure how many to monitor effectiveness of ops processes
  • usually product defects –> PP –> corrective action
  • reduce using monitoring & quality control measures
  • expensive rectification costs
  • for services, customers can cancel/refund unused portions service contracts to compensate for reduced value if major failure
97
Q

performanbce objectives

A

goals relate to particular aspects of trans processes

  • achieved through ops processes & strats
  • achieving any adds value to product & bus gains comp adv
  • strats need to achieve 1/+ perf objectives (6 main perf objectives
  • each objective expressed as a KPI,
  • allocate resources to target objective/s for profitability
98
Q

CCDFQS

6 main performance objectives that can be allocated to particular KPIs (key perf indicators)

A

1. cost
2. customisation
3. dependability
4. flexibility
5. quality
6. speed

  • all allocated goals measured against achieved targets, allocate resources for profitability
99
Q

quality and quality as performance objectives

A

often determined by consumer expectations to shape production standards

  • develops comp edge by making better products
  • most important
  • monitored at diff stages PP (quality of inputs, of processes, of outputs)
  1. quality of design
  2. quality of conformance
  3. quality of service
100
Q

if bus achieving quality in its production of output, it will benefit by

A
  • attracting customers
  • custoemr loyalty & repeat bus
  • save costs (fewer complaints to resolve, fewer mistakes so less resources wasted)
  • positive impacts on perf objs: speed, dependability, cost
101
Q

quality of design

A

understanding consumer preferences

  • how well good made/service delivered
  • design begins before product creation, determine inputs, arrange trans process
  • higher price bc quality inputs add cost

high quality design uses:

  • highest quality inputs used in manufacturing
  • **presentation
  • highly functional
  • robust, long lasting**
102
Q

quality of conformance

A

how well product meets desired standard/specifications of its design which dont require high quality inputs**
* measure how consistently products achieve (effectiveness of transformation processes compliance with desired specifications regardless of standards of specifications eg. cheap toy low quality design but meets low quality design specifications so high standard of conformance

103
Q

quality of service

A

quality of design and quality of conformance can be applied to design and delivery of services
* quality refers to how reliable & timely (responsive delivery) custoemr service is, how well meet customer needs

104
Q

speed as a performance objective

A

time takes for PPs to respond to changes in demand

  • satisfy customer demand as quick as possible (reduce waiting (place order) & eliminate bottlenecks in prod –>, shorter lead & processing times)
  • can charge higher prices (fast delivery)
  • boost perf in dependability & cost
105
Q

dependability for goods or services as a performance objective

A

how consistent & reliable bus’ products are,

  • develop comp edge w/ reliability (quality of output & delivery times), save compensation costs, repeat customers
  • esp for suppliers, considered when choosing + LT relationships
    GOODS:
  • how robust item is before it fails
  • can measure via warranty claims
  • highly durable often dependable
  • perishable goods also if consistent standard

SERVICES

  • consistency of service standards
  • reliability
  • measure w/ no. complaints, (less = service more dependable)
106
Q

business who are dependable will enjoy (perf objs)

A
  • repeat customers (esp if bus supply g&s to other bus’ (supplier) relationships LT & one of main considerations)
  • save costs
107
Q

including services

flexibility (or adaptability) as a performance objective (4 ways) 4 types of flexibility

A

how quickly op processes can adjust to changes in market

  • faster processing time, likelier processes can adjust quickly (meet broader range of consumer requirements)
  • best using plant, machinery, tech (flexibility) to ^ capacity of production
  • for services ^ no. service providers, skill lvl
  • improves other perf objs (speed-respond quick to changes in demand), cost (quick response to decreases in demand to avoid inefficient input use) & opps to ^ revenue
  1. product flexibility (change products offered)
  2. mix flexibility (offer wide variety choice in its mix of products
  3. volume flexibility (able quickly change volume products produces)
  4. delivery flexibility (able chanage delivery times of its products)
108
Q

customisation as a performance objective (define mass customisation)

A

create individualised products to meet specific needs of customers

  • customer orientation to ops means over time bus orient processes towards customisation
  • greater choice now **but **standardisation of prod most widely used
  • variations in features of goods eg. colour, size, functionality offer some lvl differentiation
  • services often customised but sometimes standardised (fast food)
  • visibility/custoemr contact indicator of deg of customisation (higher visibility, greater deg customisation)
  • more able to change products to meet customer demands/^ variety products offered, likelier product meet customer needs (product & mix flexibility)
  • mass customisation principle: create standard, mass produced item, modified to specific customer requirements (integrate standardisation w/ customisation)
  • full customisation rare only offered when g/s created after order of specified requirements made, sig higher costs than producing standardised products
  • only bus w/ product easily adapted tend to customise unless customised appraoch to all produces eg niche markets.
109
Q

cost as a performance obj

A

minimise expenses so operations processes conducted as cheap as possible

  • costs incurred often determine product selling price
  • operate lowest possible cost can gain comp edge & ^ profits
  • achieve some/all perf objs –> reduce costs (quality –> less mistakes, cost savings w/ resource allocation, flexibility –> improve speed response fall demand –>reduce use inputs)
  • acquire new capital equip/tech, use inputs efficiently, minimise waste (allocate resources), find cheaper suppliers, manage inventory, cheaper distribution methods
110
Q

define

new product design and development as an operations strategy 2 approaches

A
  • design, develop, launch, sale of new products enable bus growth and comp adv
  1. consumer appraoch (to product development): consumer preferences (identified by market research) determine which products designed & developed
  2. innovations in tech for new products made using adv techniques gving products greater functionality
111
Q

process of bringing a new product to the market involves:

A
  1. **identify **market opp
  2. create product that will appeal to the market
  3. test & modify product until ready for production
112
Q

aim of developing new products & why it’s vital

A

satisfy needs of existing customers & attract new ones

  • vital to maintain market share bc demand for msot products decline over time
  • new tech, products developed by competitors/changing consumer preferences most sales popular products decline
113
Q

QSOC

  • 4 considerations affecting operations managers during product design & development, how they affect it
A
  • consider quality, SCM, output capacity, cost THROUGHOUT D&D process
  • quality: market orientated production, customers demand certain quality, features
  • SCM: new product –> suppliers may extend range & timing/volume of supplies.
  • new product impacts output capacity and may ^ use/range of present resources/investment in new capital equip
  • cost determined through quantity & typeo f inputs, time, energy in processing
  • value directly related to 1. cost 2. customer’s perception of product utility
    (value of product in consumers eyes must offset input costs in transf proc)
114
Q

product utility

A

usefulness & value that product has from consumer’s POV

115
Q

2 things to consider

service design and development as an operations strategy

A
  • customised in nature, takes position of customer as starting pt in design process
  • (customer oriented but sometimes limited interaction and standardised)
  • whether provide explicit service, anticipate what implicit service will be and what goods required w/ delivery, then determine cost
116
Q

explicit service vs implicit service and why they’re important

A

tangible, observable, measurable features of service custoemrs can directly assess (application of time, expertise, skill, effort eg. quality of food in restaurant, clean hotel room, time to process bank transaction)

intangible, emotional, psychological aspects of service experience, benefits customers gain (often subconsciously) from service provider) eg. security when using reputable FI, friendliness/attentiveness of restaurant staff

  • both need to be addressed during design to meet customer needs, know they’re specifically catered for for implicit satisfaction
117
Q

supply chain management SCM

A

organising the supply chain to improve flow of supplies throughout ops process (inputs, transf, outputs) to best meet customer needs

INPUTS: sourcing (dom/global, suppliers), e-commerce, raw materials, etc
TRANS PROCESSES: throughput, value-adding within plant
OUTPUT: store semi/finished g/s in plant, logistics, distribution to WH/DC –> retailers/consumers

  • procedures to ensure orders for inputs timely (not enough stock of inputs eg. raw materials –> orders can’t be completed on time, too much stock –> waste, costs)
  • top down systems appraoch analysis to create strats for SCM)
118
Q

influences on supply chain

supply chain (imitator/innovator) & sourcing

A

range of suppliers bus has & nature of its relation w/ them

  • needs predictable, reliable supply chain highly responsive to changes in demand for supplies from bus
  • global web strat to reduce costs
  • imitator (creates products similar to existing but lower cost) –> reverse engineering (take apart existing product to see how made to create lower cost imitation model)
  • innovator (bus creates novel products –> lead market), tech breakthroughs involve improving existing products, –> create new opps –> create supply chains dont provide similar inputs to competitors (unlike imitators with cost primary concern i nsupply chains)
  • TRENd stricter trade barriers by some gvts (political tensions, ) reduce exposure to risks slowdown in growth int. trade & investment flows –> reshoring (manuf closer to consumer markets), ^ prefer for dom suppliers of inputs for dependability, friendshoring (c’s with mroe stable political ties in sourcing, financial investments, export)

sourcing key aspect of SCM

  • how bus acquires inputs
  • globalisation gives option sourcing inputs from oversseas –> cost savings compared w/ dom sourced inputs
  • consider quality & reliability, ethical concerns
119
Q

global web strategy

A

global web: network of locations aroudn world bus chosen for diff parts of PP & suppliers where inputs sourced

  • chosen from cost, risk, quality, reliability
    located: close proximity to suppliers, raw materials, target markets
  • low labour costs
  • gvt incentives (subsidies, low tax rates)
  • tech & skills
120
Q

3 key aspects to supply chain management

A
  1. **logistics
  2. e-commerce
  3. global sourcing**
121
Q

logistics from supply chain management SCM

A

(physical) way inputs (materials, info) sourced, stored and moved to the locations required between supply and consumption
distribution (ways delivering g/s to customer) but also includes

  • transportation
  • use of storage, warehousing, distribution centres
  • handling materials & packaging
122
Q

transportation & distribution as part of logistics (Scm)

A

physical movement of inventories eg. truck, aeroplane, ship
* type of good & cost of transport determines mode selected
* nature of goods only transported by certain modes whereas others variety choices

123
Q

storeage, as part of logistics (SCM)

A

storage: securep lace to hold stock until required

  • when there are numerous outlets where inventory sold, demand variable
  • storage needs depends on bus size & types of products
  • LT/ST, goods may have characteristics necessitate specific storage requirements ( eg perishable goods need cold storage to ^ shelf life)
  • does not always require warehouses
  • use JIT management to minimise storage costs but ^supply chain issues
124
Q

warehousing as part of logistics (SCM) & costs & how to minimise

A

use facility for storage, protecting, distributing stock
hold inventories
costs:
* premises
* carrying excess (unsold) stock

assess location to lower lead times and avoid stock shortages

125
Q

distribution centres DCs as logistics (SCM)

A
  • notfor LT storage (unlike warehouse)
  • strategically located to minimise time to supply stock to retail outlets
  • main purpose ST storage, handling & wholesale distribution of goods
126
Q

material handling & packaging for logistics (SCM)

A

movement and storage of goods, apply standards & methods of operating
* some products require certain skills, care, attention when moved (eg. glassware, dangeorous chemcials hazards)

127
Q

e-commerce for supply chain management

A

buying & selling g&S via invernet

  • sourcing, customer orders received electronically
  • distribution from bus to consumer must be quick, efficient, secure
  1. e-commerce and bus sourcing (e-procurement)
  2. e-commerce and consumer
128
Q

e-procuement = B2B

business sourcing uner e-commerce (e-procurement). business-to-business arrangement (B2B)

A

supply chain managed through electronic ordering

  • e-procurement__ use online systems to manage supply, suppliers direct access to bus’ lvl supplies
  • stock falls to pre-determined pt, supplier sends new inventory w/o bus’ request –> source inputs quicker (reduce lead time)
  • easier to find cheaper/better suppliers, source inputs from global market, info abt available quantities of inputs
  • (B2B arrangement: direct access from 1 bus (supplier) to another (buyer)sell g&s to consumers over internet payment usually credit card, bus that sell directly to consumers over internet/allow other internet bus to must be able to manage stock & supplies well so accurate info presented to cutomsers to avoid taking **order can’t be met **
  • B2B common in manufacturing

B2C: sell g&s to consumers over internet, payment usually credit card

129
Q

e-commerce and the consumer

A
  • can sell directly to consumers in B2C (business to consumer) transactions (selling over internet usually w/ credit card payment)
  • must manage supplies affected by diversity of ordering options
  • manage stock lvls well and exchange info frequently so accurate stock lvls
130
Q

when choosing supplier/s, must consider

sourcing in SCM

A

sourcing: purchasing inputs for trans process from range of suppliers

when choosing supplier, need to

  • volume inputs required to satisfy consumer demand
  • quality of inputs to deliver quality products to market
  • assess how flexible/responsive/ timely supplier is when demand changes
  • cost of inputs from supplier against other suppliers offeringsimilar quality
131
Q

RVCF

4 trends in SCM related to sourcing

A
  1. SUPPLIER RATIONALISATION
  • bus assesses no. suppliers used to reduce to smallest no. possible –> fewer contracts, wastage, duplication, improve timeliness
  • but more dependent, bus’ spread across regions to minimise risk
  1. vertical integration (backwards)
  • purchase 1/+ of its suppliers for time & cost savings
  • guarantee supply, create profit centre (generates revenue bc supplier owned sells inputs to other bus)
  1. cost minimisation
  • ^ offshore suppliers for low cost resources/inputs
  1. flexible(responsive) supply chain processes
  • lean PPs, not carry inventories but make to order so no unnecessary storage expenses
  • lean appraoch to supply chain only order necessary, resources optimally used, respond quick to changes in demand
  • flexibility finding alternative suppliers responding to supply chain bottlenecks
132
Q

outsourcing

A

business activities contracted out to external providers perform?

  • when task performed by external provider specialising in bus function done at lower cost and greater effectiveness than bus itself
133
Q

2 forms of outsourcing

A
  1. captive/in house (DIY)
  • tasks/functions to employees using own resources to complete work
  • sometimes contracting work to a separate internal team/subsidiary within the same organization
  • ^control over quality, confidentiality, bus goals
    2. non-captive (outsourced to 3rd partiies via market), external providers
134
Q

deciding to outsource

A
  • if outsourcing cheaper & more efficient than performing work inhouse
  • geographcial location: domestic/overseas
  • outsourcing arrangements: contract (length), service lvls requires & agreed KPIs
  • which service providers to outsource to
135
Q

SFLC

4 outsourcing options

A

create shared services centres SSC

  • inhouse outsourcing used by large bus’, new service provider created to perform work for many subsidiaries

‘fee-for’service’ arrangement

  • low risk ST strat contracting supplier for specific job at predetermined price
  • eg. manufacturer uses design firm to design new product/recruitment agency to fill staff vacancy

LT contracts (‘build-operate(relocate services to new offshore location)-transafer’)

  • ^risk & commitment, contracts need agreed lvls service measured against predetermined KPIs
  • most offshore outsourcing

co-sourcing/joint ventures

  • both parties (service provider & bus hires to carry work) involved in aspect of bus outsourced
  • not done by external party but external expert working within bus as contractor
  • gives bus’ more control over work given to specialist 3rd party
136
Q

types of outsourcing

A

OPERATIONS

  • design, manuf, sourcing, distribution, logistics

HR

  • training & development
  • finance & accounting (FAO) prepare financial accs & reports, advice & tax compliance
  • legal process outsourcing** (LPO)** legal services (draft contracts, trademarks)
  • knowledge process outsourcing (KPO) managerial work (marketing strat, public relations, decision making)
137
Q

SCSCS

advantages of outsourcing

A
  1. simplification
  • reduce no. activities perf w/n bus
  1. efficiency & cost savings
  • access cheaper, skilled labour in offshore locations –> cost savings
  1. access skills/resources bus lacking
  • outsourcing to nation access highly skilled labour at low cost (dont spend money on training & developing labour resources)
  1. focus on core business activities
  • what it cant oursource eg. vision, sustainable adv via innovation
  1. strategic benefits
  • avoid trade barriers (that prevent foreign companies from trading)
  • trade in diff time zones, conduct op during day and have processing work done overnight by outsourcing vendor
  • partnerships betw outsourcing vendor cann suggest innovative solutions, ^ productivity over time
138
Q

disadvs of outsourcing

A
  1. payback periods
  • sig cost savings LT but substantial inital cost organising & organisational changes (eg. redundancy payments), may take yrs to repay
  • sometimes better reduce internal inefficiencies
  1. language communication
  • relationship w/ vendor usually lasts 3-5 years may lead to outsourcing business and service provider different ways of managing problems
  • often across 2/+ regions, language diff,
  1. loss of corporate memory & vulnerability
    * reliance on outsourcing provider
  • knowledge of processes & solutions can be lost transferring bus processes to outside parties
  • vulnerable to major disruptions if ops of outsourcing provider disrupted eg. strike,
  1. org change & restructuring
  • downsizing –> loss dom employment –> redundancy costs, lower moral among remaining staff –> industrial actions, reputational damage
139
Q

managing change effectively

A
  • identify reasons for resistance to change to adapt to circumstances that change
  • change constant as processes continuously refined & adapted over time sometimes major require sig action –> plan
  • successful managers anticipate & adjust to changing circumstances, not unprepared
  • must be proactive, initiating change than reactive waiting for it to occur & responding (sometimes unavoidable eg. unforeseen events)
  • poorly planned change = great staff resistance unless they embrace change –> limited chance success

overcoming financial & psychological resistance to change & successfully adapting help bus sustain comp adv when face threats

140
Q

how to manage sig changes

A
  • changes must occur at pace can be absorbed & integrated into bus
  • evaluated thoroughly to assess impact
  • introduced into workplace culture supporting emp participation

adopt formalised approach:

  1. identify source/s change & assess if need to accommodate by adjusting processes
  • generally, sources are ext & bus responding to threat posed
  1. lower resistance to change by communicating w/ emps abt need & get widespread support for it
  • emps likelier embrace if given clear pic of what, when, how, WHY
  1. create culture for change
  • all stakeholders (inc all emps) accept change constant & support org changes
  • can use CHANGE AGENTS (internal staff/ext change consultants) inds lead org, communicate w/ emps, consolidate message need change, reduce anxiety –> encourage staff support change
  1. set achievable goals & rewards
  • ST wins undertaking change so ppl involved in process feel achievement in work & efforts recognised & rewarded
  • goals too diff/lack recog –> staff disillusioned, frustrated towards change process, undermine efforts
141
Q

bleeding edge tech

A

tech so new it has greater deg of risk in unreliability for those adopting it

142
Q

leading edge tech as operations strat

A

tech most advanced/innovative at PIT

  • create products quiker and achieve higher standards w/ less waste
  • created by processes and thinking - inventive inputs created, new products made will change markets
143
Q

established tech as an operations strat

A

tech already developed & widely used & accepted bc proven in marketplace

  • functionally sound and establish basic standards in productivity & speed
  • no risk to ops process
  • universal availability, no comp adv but not using comp disadv
  • software for CPA & Gantt Charts, e-procurmenet/B2B, CAD, CAM & distribution
144
Q

inventory/stock

A
  • quantity of raw materials,
  • work in progress &
  • finished goods that
    bus has on hand at PIT
145
Q

advantages of holding stock

A
  1. consumer demand can be met when stock available, prevent consuemr from buying competitor’s (risk reduction strat)
  2. if paricular line of goods runs out, can offer alternative –> generate income instead of losing sales
  3. reduce lead times betw order & delivery
  4. opp to generate immediate revenue, hard to generate from partially transformed inputs
  5. stock is asset
  6. making goods in bulk can reduce costs (ecos of scale purchasing discounted inputs)
146
Q

disadv of holding stock

A
  • many bus hold as little stock possible ‘make-to-order’
    1. invested capital, labour, energy cannot be used elsewhere (used to create stock)
    2. obsolescence if stock remains unsold for extended PIT
147
Q

main inventory valuation techniques to calculate value of unsold stock (diff to calculate value remaining stock as COGS (closing stock) can change during accounting period when suppliers ^/decrease prices)

A
  1. last in first out LIFO
  • pricing inventory assuming last goods purchased are also first goods sold
  • (more recent)
  • non-perishable goods,
  • overstate COGS, understate profit, undervalue closing stock (stock costs rise over time) hence illegal under AUS Accounting Standards
  1. first in first out FIFO
  • method pricing inventory assuming 1st goods purchased also 1st goods sold
  • perishable goods
  • understate COGS, overstate profits, overvalue closing stock
  • neither are better than other, during periods of price changes, 2 bus performing equally well may report differing profit lvls depending on method
  • large impact on gross profit, change COGS, closing stock
  • affects calculation of unsold stock too
  • also methods for MANAGING inventory (determine which stock displayed for sale first)
148
Q

just in time inventory management (method lean - emphasise low cost businesses apply, make to order)

A

inventory management ensures exact amt material inputs arrive only as needed in op process

  • bus make only enough products to meet demand –> time & resources efficient & eliminate wasted inputs (unsold stock & storage costs)
  • operations must be very flexible & ale respond quick to changes in demand, accurate forecast customer demand
  • method managing flow & storage of stock, not inventory valuation (can use LIFO/FIFO also applying JIT method)
149
Q

quality management + 3 common contemporary approaches to quality

A

processes bus undertakes to ensure consistency, reliability,, safety, fitness of purpose of product

  1. quality control (inspection, measurement, intervention)
  2. quality assurance (apply international quality standards)
  3. quality improvement (TQM and continuous improvement)
150
Q

quality control

A

reduce product defects by using inspections at various pts in PP

  • set predetermined quality standards applied to products & processes and assess against, failure to meet need corrective action &** what caused**
  • reactive approach need to balance against proatcive approach to encourage continuous improvement
    & train labour to apply quality standards throughout processes
  • inspecitions of all/part of total volume of production
  • for services, inspect emp perf
151
Q

+ 3 aspets

quality assurance

A

using system takes series of performance measurements & assessing them against pre-determined quality standards

  • proatcive approach to quality, emphasise processes rather than output
  • emphasis quality of design w/ lvl quality comfort to prospective buyers
  • ‘fitness for purpose’ how well product does what’s designed to do
  • achieve ‘right first time’ so products dont need rework (wastes time, energy, resources)
  • meet accepted international standards International Organisation for Standardisation IOS enhance domestic & international competitiveness
152
Q

quality improvement

A

continuous improvement: ongoing commitment to improve bus’ g/s
* staff encouraged to demonstrate initiative and suggest areas to make changes so all processes enhanced simultaneously all responsible

153
Q

6 sigma

A

quality management approach to achieve near perfection in op proc by eliminating defects (quality improvement)

  • identify & remove causes of problems in op process
  • quality management methods eg. statistical tools to measure variations in op process, empower staff & training, improve quality through whole bus and continuous improvement
154
Q

overcoming resistance to change as op strat (sources of resistance, external & internal changes)

A

must adapt to external change sometimes need sig internal realignment
* resistance from 1. financial 2. emotional sources within bus
* managers need to understandwhy change resisted and strat to overcome

external changes caused by legislation, economy, societal expectations, new tech

internal changes from staff initiative, use available tech and innovating g/s

155
Q

financial costs leading to resistance to change

list all then purchasing new equip

A
  1. purchasing new equip
  2. redundancies
  3. retraining employess
  4. structural reorg of bus (change plant layout)
  5. purchasing new requip
  • machinery, tech capital costs which are high and ultimately adds value in trans processes
  • improvec processing flexibility & speed –> reduce lead times
  • reduced waste from equip failure
  • assess cost of purchasing against leasing new equip & tech
  • leasing dont require high upfront payment but more expensive as ongoing operational cost
156
Q

why purchasing new equip adds resistance

A
  • high machinery, tech capital costs adds value in trans processes
  • market advantages eg.
  • improvec processing flexibility & speed –> reduce lead times
  • consistent, higher quality production
  • reduced waste from equip failure
  • assess cost of purchasing against leasing new equip & tech
  • leasing dont require high upfront payment but more expensive as ongoing operational cost
  • if expected benefits new equip small/high costs, continue existing equip until ^evidence improvements in efficiency & effectiveness or plan required fund outlay
157
Q

redundancy payments adding to resistance

A

redundancy loss of work arising from job no longer exists due to tech changes, org restructure/merger/acquisition

  • seek jobs elsewhere in same industry/retrain to have relevant job skills in diff industries
  • substantial bc cumulation of payments
  • capital (machinery & tech) replaced labour
  • high cause value of payout depends on
    1. length time employee w/ bus (entitled to minimum payouts)
    2. worker’s wage/salary
    3. amt unused leave employee accured (annual leave, long service leave)
    4. wages employee owed
158
Q

retraining adding resistance

A
  • change –> employees acquire diff work skills due to changign job roles/training on new software due to new tech –> decline productivity & ^errors in ST –> reluctant to learn new skills –> resistance
  • managers avoid retraining costs & slowed productivitycost arises form change causing reorg of bus acquire tech
  • benefits of tech cant realise w/o expenditure on training & development
159
Q

how reorg plant layout adds resistance to change

A

facilities where machinery organised around needs of goods and transf proc required to produce

  • major changes require extensive reorg of layout within factory/office
  • add costs when transporting equip & installing power outlets, downtime when transfer from old to new equip
  • ST losses in productivity as staff familiarise themselves with new work processes
160
Q

intertia as source of resistance to change

A

psychological resistance to change

  • uncertainty, fear unknown when change imminent resist
  • threaten job prospects, lose career opp, new tech & eqip
161
Q

global factors as an op strategy

A

opp when assessing op strats , comprehensively examine globalisation impact on opstrats

  • global sourcing
  • ecos of scale
  • scanning & learning
  • R&D
162
Q

what s SCM

global sourcing as a global op strategy

adv & disadv

A

bus purchasing supplies/services w/o being constrained by location, for SCM: buying from suppliers best meet sourcing requirements to achieve cost advantages, obtain benefits from outsourcing

ADV:

  • raw materials, components, labour overseas better&/cheaper/adv tech than domestic inputs
  • inputs needed may not be available domestically
  • delivery may be quicker than sourcing from dom suppliers

DISADV

  • ^ logistics, storage & distribution costs
  • difficulties w/ managing diff legal requirements betw nations
  • gvt policies (protective trade barriers)
  • ^ complexity of operations when sourcing from diverse locations
  • risk too dependent on foreign suppliers (global supply chains)
  • bottlenecks when bus’ hoard items in short supply to protect against supply chain issues –> reshoring
163
Q

ecos of scale as global op strat

A

cost advantagses from increasing size/scale of production

  • lower per unit input costs
  • global when bus expand & sell their products to markets beyong home country (relatively small pop, limited market to sell their products if operate 1 nation –> expand into global markets, larger potential market –> ^lvls prod & benefit from cost advs of EoS)
    include:
  • lower input costs from bulk purchasing discounts
  • spread input costs (R&D, marketing, machinery over larger volume output)
  • cost savings in transport (send full container loads)
  • lower IRs on debt bc can borrow larger sums
164
Q

scanning & learning as global op strat

A

scanning global enviro. identify and learn from global bus practices
* Japanese bus industrial success kaizen emphasise quality, continuous improvement
* learn from staff and managers who worked in other bus, sometimes internationally
* diversity of exp helps bus learn how to develop flexibility & insight

165
Q

what is R&D as global op strat

A

proactive companies allocate resources to this to create leading edge tech and innovative products & solutions, more eff prod methods better meet needs of consumers in increasingly competitive bus enviro to establish & maintain comp adv

  • sacrifice funds to generate products will ^ revenue & profits LT
  • gvt encourages, through tax concessions & grants –> assist cost investing resources
  • in c’s with reputation for specialised knowledge in area/edu facilities esp low labour costs
166
Q

GTGLECCQ

influences on operations (Syllabus)

A
  • globalisation
  • tech
  • quality expectations
  • cost based comp
  • gvt policies
  • legal reg
  • enviro sustainability
  • CSR (legal compliance vs ethical responsibility, enviro sustainability & social responsibility)
167
Q

transformed resources & transforming resources (syllabus)

A

transformed

  • info,
  • materials
  • customers

transforming

  • HR
  • facilities
168
Q

transformation processes (syllabus)

A
  • 4 V’s
  • sequencing & scheduling (gantt charts, CPA)
  • tech, task design, process layout
  • monitor, control, improvement
169
Q

outputs ( syllbaus)

A
  • customer service
  • warranties
170
Q

operations strategies (syllabus)

A
  • new product/service design & development
  • SCM (logistics, e-comm, global sourcing)
  • outsourcing
  • tech (established, leading edge)
  • inventory management (LIFO, FIFO. JIT)
  • quality management (control, assurance, improvement)
171
Q

overcoming resistance to change (Syllabus)

A
  • financial costs
  • purchasing new equip
  • redundancy payments
  • retraining
  • reorganising plant layout
  • inertia
172
Q

psychological resistance to change

A

inertia

  • feel uncertainty/fear of unknown –> resist
  • ^ when feel job threatened, career opps diminished/new workplace tech/processes intimidating (more common for employees than owners/managers)
  • still financial effects from resistance
173
Q

global factors (syllabus)

A
  • global sourcing
  • scanning and learning
  • ecos of scale
  • R&D

business y12 (6 decks)

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