8. The purpose of the operations function Flashcards
Operations
activities concerned with the acquisition of raw materials, their conversion to into products and supply of finished product to the customer
Operations management
activities required to produce and deliver a product or service incl. purchasing, warehousing and transportation
Four Vs of operations
Volume
Variety
Variation in demand
Visibility
Primary activities
directly related to the creation or delivery of a product
Inbound logisitics
Operations
Outbound logisitics
Marketing & sales
After sales service
Support activities
Procurement
Technology development
Human resource management
Firm infrastructure
Position of organisations in the supply chain
Upstream - further away from the customer
Downstream - closer to the customer
Supply chain
links internal and external suppliers with internal and external customers.
Effective supply chain can be a source of competitive advantage.
Supply chain network
interconnecting group of organisations which relate to each other through linkages between different processes and activities in producing products/ services for the consumer
Sourcing strategies
Single
Multiple
Delegated
Parrallel
Single sourcing
each product/ service is sourced from one supplier
Mulitple sourcing
each product/ services is purchased from more than one supplier
Delegated sourcing
purchase/ sourcing task is delegated to an external organisation
Parallel sourcing
product/ service is sourced through a mix of single, multiple and delegated sourcing
Purchasing
day to day buying
focus on price, quality and accurate delivery
viewed as out of date approach to supply chain management
Supply
planning and implementation of supply strategy
manage overall supply process
Strategic positioning tool Reck and Long
Passive
Independent
Supportive
Integrative
Reck and Long
Passive
Purchasing viewed as an admin function
no strategic direction, passively reacts to requests from other departments
Reck and Long
Independant
Strategic direction but independent from corporate strategy
appointment of purchasing manager
Focus on price negotiations
Uses latest purchase practices and technology
Reck and Long
Supportive
centralized purchasing department
Focus on coordination between departments
Greater awareness that purchasing can affect the corporate strategy
Reck and Long
Integrative
Purchasing seen as key part of strategic planning
Alligned with corporate goals and strategy
Focus on developing relationships with suppliers, seen as partners
Cousins
Organisation structure
Choice of structure (centralised, decentralised or a mix) impacts control
Cousins
Relationships with suppliers
opportunistic/ competitive based on prices
collaborative more positive relationship based on a joint quest to reduce costs/ improve quality
Cousins
Cost Benefit
cost benefit analysis should be at the heart of any strategic decision
Cousins
Competences
Do the skills exist to achieve the strategy
