Business Operations - roles of operations Flashcards
what are the strategic role of operations management
It is where the operations manager makes strategic decisions of where to buy raw materials, where to produce the products, planning production and delivery and controls to manage quality with the aim of lowering costs to an industry brenchmark
These include strategies such as;
- cost-leadership approach
- good and service differentiation approach
what is the role of operations
it is concerned with the transformation of inputs into outputs
- the aim is to make processes more efficient
- reducing costs and improving quality
- increase productivity
what is the cost-leadership approach (strategic role of operations)
where the business seeks to be competitive on the basis of lowering prices below their competitors
- products are basic
- fewer features
- perhaps lower quality
it is where the business expects to make a smaller profit margin on each item which gets balanced by a high volume of sales
what are examples of cost-leadership approach (strategic role of operations)
- airlines that do not offer entertainment or foods
- supermarkets offering no brand labels
how can the cost-leadership approach be achieved (strategic role of operations)
- outsourcing
- economics of scale
what is outsourcing (cost-leadership approach)
it is an agreement in which a company hires another company to be responsible for a planned or existing activity that could have been done internally
E.g. transferring employees and assets from one firm to another
what is case study of outsourcing (cost-leadership)
apple outsourcing their manufacturing to china
–> Foxconn
what is economies of scale (cost-leadership approach)
cost advantage methods that can occur when a company increases their scale production and becomes more efficient
–> this results in a decreased cost-per-unit
cost of production (both fixed and variable) is spread over more units of production
what are the issues of the cost-leadership strategy (strategic role of operations)
- competitions may use the same strategy
- business product may not be perceived by customers to be equal to competitors
- consumer preference changes and the market for a ‘low-cost’ + ‘low quality’ product may shrink
what is the good/service differentiation approach (strategic role of operations)
a strategy to achieve a sustainable advantage by making products different or unique this can include; - better quality - faster delivery - custom designed products - more features or applications
Interdependence of finance with market
research identifies the nature of goods consumer’s desire where marketing strategies to encourage purchases. operations must supply a product that has features and qualities customers demand for
Interdependence of finance with market
research identifies the nature of goods consumer’s desire where marketing strategies to encourage purchases. operations must supply a product that has features and qualities customers demand for
Interdependence of operations with finance
finance creates a budget and makes funds available to purchase inputs, equipment, repairs and maintenance to produce
