9: The Finance Function and Operations Flashcards
(48 cards)
operations
fulfilling orders and how we take requests through production of goods/services all the way to delivery of goods/services to end customer
operations management
transformation of inputs (raw materials) into outputs that meet the needs of customers
transformation process model
business exists to transform inputs into outputs
inputs have 2 forms: transformed and transforming
transformation processes as where you add value
4 Vs of operations/transformational processes
volume - sufficient number of good/service
variety - standardisation or heterogeneity?
variation in demand
visibility - degree to which it is important that the client can see what we do and how we do it
benefits of efficiency in production
more production from the same level of input
reduced wastage - boosts profitability and improves CSR
value chain
sequence of business activities, by which, in the perspective of the end user, value is added to the products/services produced by an entity
value chains as how we perform transformational activities
value chain model (Porter)
what a firm does is broken down into highly visible primary activities and supporting activities
2 ways to run the value chain and create value (Porter)
low value and high volume
- efficiency at the bare minimum of cost with large volumes
high margins and low volume
- adding the maximum amount of value
primary activities in the value chain model (Porter)
inbound logistics - buy in raw materials
operations
outbound logistics - delivery to customer
marketing & sales
service
supporting activities in the value chain model (Porter)
bridge the primary activities
firm infrastructure - ensuring processes are smoothly integrated and there is a consistent level of service quality
HR management
technology development
procurement
value system (Porter)
firms do not operate in isolation
idea that our organisation should link through with suppliers, distributors and the customer value chain
process and process design
process as a bounded set of activities undertaken to generate an output
process design concerned with understanding the activities that are undertaken in a business process with the aim of enhancing efficiency and effectiveness
why do businesses seek systemic and process improvement?
better organised activities reduce cost
provides a scalable platform
offers better products/services to drive competitor advantage
exploit new technologies
exploit new strategic directions
advantages of process maps
enhanced understanding of what we are trying to achieve
people in the process better understand their role in the process
opportunities to eliminate duplication and identify inefficiencies
may support other organisational schemes
5 stages to product/service development
- consider what customers need
- concept screening
- design process
- consider time-to-market
- product testing
4 main characteristics of services
- intangible and not physical
- inseparable (from the organisation/employee providing the service)
- perishable
- variable and unique
supply chain management
steady flow of goods/services through the supply chain
supply chains should be responsive and reliable
supply chain networks
interconnecting groups of organisations which relate to each other through linkages between different processes/activities involved in producing products/services to the ultimate consumer
implications of integrated supply chains
price and inventory coordination to avoid bottlenecking
linked computer systems
early supplier involvement in product development and component design
common logistics design
strategic supply wheel (Cousin)
research on the level of strategic maturity in the purchasing function of UK/EU companies
adversarial/contractual - business doesn’t want to cooperate or work closely with suppliers
collaborative/relational - business operates closely with suppliers and works together to meet customer needs
demand networks
solution to the problem that we don’t want to over or underproduce goods
better alignment of systems
makes you more agile to cope with potential surges in demand
makes you more adaptable
supply portfolios
way in which we can improve efficiency of the flow of raw materials of a sufficiently high level of quality required to meet demand for production
supply strategies
single supply strategy
multiple supply strategy
delegated supply strategy - supplier given responsibility for the delivery of a total/complete sub-assembly
parallel supply strategy - combination of all
benchmarking
comparing something with something else
internal, competitive and inter-industry benchmarking
