Chapter 4: Operations strategies Flashcards
(136 cards)
1
Q
what are performance objectives
A
performance obectives establish standards which can be used to both evaluate the performace of ops and strive for improvements in different aspects of the ops function - help bus develop a competitive edge
2
Q
what are the main performace obj
A
- quality
- speed
- dependability
- cost
- customisation
- flexibility
3
Q
how can quality, speed, dependability, flexibility, customisation and cost help establish an advnatage over compeititors
A
- quality: better products
- speed: quicker sevrice and delivery
- dependability: reliability in terms of quality of output and delivery times
- flexibility: new products/ range, ability to cater to demand or falling demand
- customisation: products more suited to customer needs
- cost: lower prices
4
Q
what are different levels on which qaulity can be assessed
A
- quality of design: refers to how wll a good is made or service is delivered (arises from understanding of consumer prefernece)
- quality of conformance: refers to how well a product meets the desired standard or specifications of its design
- quality of service: refers to how reliable and timely customer service is, as well as how well service meets the needs of its customers
5
Q
what are the benefits of a bus trying to achieve quality of its output
A
- attract custoemrs
- enjoy customer loyalty and repeat business
- save on costs as there will be fewer complaints and less to be fixed
- enjoy positive impacts on the performance objs of speed, dependability and cost
6
Q
what is the aim of speed as a perfomance obj
A
speed aims to satisfy customer demands as quickly as possible
7
Q
what are the benefits of speed
A
- reducing wait times to place order and eliminating bottlenecks in production to speed up processing and shorten lead times
- customers more likely to patronise the bus again (buy from again)
- can boost performance in relation to dependability and cost
8
Q
what is dependability
A
refers to how consistent and reliable a bus’s products are
9
Q
what does dependability refer to in terms of goods vs sevrices
A
- goods: if they are of consistent and predictable standard
- services: consistency of service standards and reliability
10
Q
what is a good measure of dependability of goods vs sevrices
A
- goods: the no# of warranty claims
- services: the no# of complaints
11
Q
why is dependability so important
A
so that a bus has repeat customer esp if they are suppliers providing to other buses
12
Q
what is flexibility
A
flexibility refers to how quickly operations processes can adjust to changes in the market
13
Q
what are the different types of flexibility
A
- product flex: means that a bus can change the products that it offers
- mix flex: means that a bus is able to offer a wide variety of choice in its mix of products
- volume flex: means that a bus is able to quickly change the volume of products it produces
- delivery flex: means that a bus is able to change the delivery times of its products
14
Q
how can being flexible also achieve other other performance objectives
A
- speed: can respond quickly to increases in demand
- cost: quick response to decreases in demadn to avoid inefficient use of inputs
- dependability
15
Q
what is customisation
A
customisation refers to the creation of individualised products to meet the specific need of customers
16
Q
what is mass customisation
A
mass customisation are the variations in product features such as colour, size and functionality
17
Q
what is cost
A
refers to the minimisation of expenses such that ops processes are conducted as cheaply as possible
18
Q
how can buses lower costs
A
- acquiring new tech –> lower costs, use inputs more efficiently and minimise waste
- cheaper suppliers
- managing inventory more efficiently
- finding cheaper distribution methods
19
Q
how does aiming to achieve other performance objectives help to reduce costs
A
- quality: striving for quality can reduce the budget for fixing mistakes & more efficient
- achieving speed saves time therefore money
- being dependable also contributes to time and money
- flexibility helps to reduce costs by improving speed of response to falls in demand; reducing inputs
20
Q
what does quality mean at qantas
A
- aircraft being clean and tidy
- staff being courteous, helpful and firendly
- meals and in-flight entertainment
- website being user-friendly
- upgrading its fleet, lounges, menus and app
21
Q
what is speed at qantas
A
speed means the elapsed time b/w Qantas customers asking for their service and getting it
22
Q
what has qantas done to increase the speed of their service
A
booking flights online, online and mobile check-in, next generation self-service kiosks and Q bag tags
23
Q
what issues have qnatas experienced with achieving speed
A
lengthy ques and a shortage of staff at airports ad in call centres
24
Q
what is dependability at qantas
A
dependability at qnatas is measured by on time departures and arrivals
25
outline the trends in qnatas' dependability
- though typically outperorming its competitors in dependability, flight cancellations became a common occurence and on time perforance was poor from april to sep 2022
- significant improvements in FY24 saw flight cancellations and on-time performance return to pre-covid levels while lost baggage rates fell to better than pre-covid levels
- qnatas' rnaking should remain strong in the next few years as its fleet renewal program progresses
26
why is flexibility important to qantas
due to the variety of changes in the market such as seasonal demand like holidays and special events, qantas must constantly operate to a flexibility performance obj to be able to adjust to major increases in passenger demand
27
how did qnatas show its flexibility during the border restrictions during the covid pandemic and after
- the company placed much of its flying bus into hibernation
- operated minimal international flights
- increasing capacity quickly in response to borders reopening
- struggled to meet increased demand due to understaffinf and supply chain issues leading to signif increase in flight cancellations, delays and other service issues
- qantas forced to limit its capacity to get service standards on the flights its operating back to a consistent level
28
what is customisation at qantas
customisation means giving qantas customers more options by varying the product in minor ways
29
give some egs of ways qantas can provide more customised services
- through its membership with the oneworld alliance, qnatas is able to offer services to more than 900 destinations
- offering different classes of seating
30
what does the process of bringing a new product to the market involve
- identifying a market opp
- creating a product that will appeal to that market
- testing and modifying the product until it is ready for production
31
what does the development of new products aimm to do
- staisfy the needs of existing customers as well as attmepting to attract new ones
- maintaining makret share cos demand for most products will decline over time
32
what are the two main approaches to new product design and development
- a consumer approach to product development: the preferneces and desires of consumers identified by market research
- changes and innovation in tech: these enable new, appealing products to be made using adv tech which give products greater functionality
33
what are some important considerations in new product design and development
- quality - customers will demand particular lvl of quality
- supply chain management - a new product may extend the range of suppliers and supplies, and may influence the timing of volume of supplies
- capacity management - a new product will have an impact on the capacity of a buses ops and may increase use of range of resources, or req investment in new machinery and tech
- cost - the value of the product in the customer's eyes must offset the cost of inputs used in the transformation process
34
what must qantas consider when developing new services
- they involve serious commitments in cost time and resources which must be diverted from existing ops or financed as an additional expense
- must develop new services to maintain its competitiveness and profitability
35
what is the benefits of qnatas' non-stop flights
- gaining a compeititve edge (hard for wantas to develop on cost or quality over gov-owned foreign rivals)
- shorter flight times and greater convenience particularly sttractive to bus travellers
36
what conditions did the project sunrise have to satisfy before proceeding with new sevrices
- its commercial viability
- negotiating a new agreements with its pilots to fly the long flight
- securing necessary legislative changes around maximum flight times and crew operating limits
37
what does supply chain management involve (SCM)
SCM involved organisation of the supply chain to improve the flow of supplier throughout the ops process to best meet the needs of customer
38
what is needed for a smooth production process
critical that inputs are available on time and that customer receive the outputs as req'd. if not, means that orders cannot be completed on time, while too much stock can lead to storage issues, waste and additional costs
39
what does the supply chain include
obtaining raw materiqls and other inputs from suppliers, storing inputs at the plant where ops takes place, moving transformed goods to warehouses and distribution centres and then to customers
40
what are the 3 key aspects to SCM
- logistics
- e-commerce
- sourcing, including global sourcing
41
define logistics and what it includes
logistics is a term broadly referring to distribution
- concerned with the coordination of the supply chain and what does where at what time
- includes transportations, the use of storage, warehousing and distribution centres, and materials handling and packaging
42
what is ditribution
refers ot the ways of getting goods are sevrices to the customer
43
what modes of transport can be used to move inventories
- bicycle courier, van , truck, train, aeroplane and ship
- determined by the type of product, distance, req'd speed and cost of tranportation
44
what does storage involve
storage involves holding stock until it is req'd
- buses have diff needs in terms of storage depending on sice and types of products
45
what is warehousing
the use of a facility for the storage, protection and (later) distribution of stock
46
what are the significant costs associated with warehousing
includes cost of the premises, insurance, security, labour and energy costs
47
what is the difference b/w a distribution centre and a warehouse
a distribution cenre is not intended for long-term storage ie they are strategically located to minimise the time it takes to supply stock to retail outlets
48
why is materials handling an important aspect of the movement and storage of goods
- some products req particular skills, care or attention when being moved eg glassware and chemicals
- movement, storage and packaging must ll be done in a way that protects the goods, people and the environment from damage
49
what does ecommerce involve
ecommerce involves the buying and selling of G&S via the internet
- e-commerce is relevant to SCM for both the bus in sourcing of inputs and consumers who are increasingly placing order electronically
50
what is e-procurement
the use of online systems to manage supply allowing suppliers direct access to the bus's level of supplies
51
what is B2B (bus-to-bus)
if stock falls below a pre-determined point, suppliers sill send new inventory without a request from bus allowing them to source inputs more quickly
52
what is a benefit of e-commerce
- made it easier for bus to shop around for better/cheaper suppliers
- get info about available quantities of inputs
- source inputs form the global market
53
what is B2C (business-to-consumer)
the selling of goods and services to consumers over the internet, with payment usually by credit card
- main implication: retailers are bypassed (ie straight from buses to consumers)
54
what do buses need to consider when choosing a supplier
- the volume of inputs req'd to satisfy consumer demand
- the quality of inputs req'd to produce products of the quality the bus would like to deliver to the market
- how responsive (felxible) and timely the supplier is to changes in demand
- the cost of supplier/inputs from the supplier relative to other suppliers offering inputs of similar quality
55
what is supplier rationalisation
- supplier rationalisation: involves a bus assessing the no# of suppliers it uses in order to reduce the no# of suppliers (fewer contracts, less wastage and duplication, and improved timeliness)
- reversal of this trend as many buses caught by overreliance on particular suppliers during pandemic so have sought to spread across diff regions to minimise risk
56
what is vertical integration (backwards)
- occurs where a bus purchases one or more of its suppliers
- ops managers must assess whether purchasing a supplier will actually achieve time and cost savings (benefits of guaranteeing supply and creating a profit centre)
57
over the past few decades, what are the four particular trends in SCM
- supplier rationalisation
- vertical integration (backwards)
- cost minimisation
- flexible/responsive supply chain processes
58
over the past few decades, what are the four particular trends in SCM
- supplier rationalisation
- vertical integration (backwards)
- cost minimisation
- flexible/responsive supply chain processes
59
what is cost minimisation as a trend of SCM
this trend refers specifically to the increasing use of offshore suppliers to take adv of low-cost resources/inputs
60
what is the trend in flexible/responsive supply chain process
there has been a growing emphasis on 'lean' production processes
- lean org will not carry inventories but will aim to make when ordered so that expenses not incurred on unnecesary storage to be flexible and responsive to changes in demand
- some buses adopted 'just-in-case' approach rather than lean, ordering supplier to further shore up their supply chains and focusing on dependability than cost
61
what is global sourcing
global sourcing refers to buses purchasing supplier or services without being constrained by location
- In SCM, global sourcing mean buying or sourcing from wherever the suppliers are that best meet the sourcing reqs
62
what are disadv of global sourcing
- increased logistics, storage and distribution costs
- difficulties associated with managing different legal reqs b/w nations
- challenges posed by changes to the geopolitical situation and gov policies
- increasing complexity of overall ops when sourcing from diverse locations
63
what are the overwhelming benefits of global sourcing
- raw materials, components or labour overseas may be better or cheaper than domestic inputs
- inputs needed may not be available domestically
- delivery may actually be quicker than sourcing from domestic suppliers
64
what were the effects of covid on the SCM
- supply chain bottlenecks emerged due to lockdowns in manufacturing hubs
- increase in online shopping and deliveries - suppliers struggling to cope with surging demand
- buses hoarding items in short supply to build buffers to insure themselves against supply chain issues
- reshoring to ensure supply chains less dependent on a single country
65
what is SCM at qantas
involves controlling the flow of inputs through Qnatas' whole ops process, from sourcing raw mats such as fuel through to final delivery o the service to the customer
66
SCM at qnatas involves four key components:
- logistics: ensuring that all the physical inputs are on hand and the quantities needed in the right place at the right time (eg pilots, cabin crew, baggage, etc) to op at optimum efficiency
- e-commerce: had largely replaced time consuming and costly manual processes, provides real time info on availability and price of G&S
- sourcing: qnatas assesses all potential suppliers for dependability and flexibility (and CSR thru the supply chain assurance program)
- global sourcing: employed staff from overseas at lower wages and sources inventory from low cost overseas suppliers (blankets and headsets)
67
why are airlines showing dependence on a rage of service providers in the aviation supply chain
due to the significant understaffing during the panedmic, airlines were outsourcing labour. However may of these providers shed staff too and later struggled to scale up production to meet increasing demand due to the lack of workforce skills and knowledge that existed pre-pandemic
68
what is outsourcing
the use of external service providers to perform certain bus activities (at lower cost and greater effectiveness)
69
what is business process outsourcing (BPO)
outsrouced bus processes, including:
- ops such as design, manu, sourcing, distribution and logistics
- HR function such as payroll, counselling and training and development
- administrative tasks
- info tech (IT)
70
what are other types of outsorucing
- finance and accounting oustourcing (FAO) - financial accs and reports, advice and taxation
- knowledge process outsourcing (KPO) - outsourcing of managerial work eg marketing, public relations
- legal process outsourcing (LPO) - legal servoces eg contracts and patents
71
what must a bus consider when deciding whether or not to outsource particular bus functions
- whether outsroucing more efficient than performing task in-house
- the geographical location to outsource to (domestically or overseas)
- which outsourcing vendors to use
- details of the outsourcing arrangements (length of contract, service lvls and KPIs)
72
what are some outsourcing options
- creation shared service centres - in-house form of outsourcing by large buses to create new provider to perform work for multiple subsidiaries
- fee-for-service arrnagements - low risk short term strat involving contracting a supplier for a particular job at a pre-determined price
- long term contracts - contracts must include agreed levels of sevrice that can be measured against pre-determined KPIs
- co-sourcing - the sevrice provider and the bus workign tgt to manage the success of the bus (to feel like work is not done by external party but by external expert working as a contractor)
73
what are the adv of outsroucing
- simplification and ability to focus on core activities
- efficiency and cost-savings - bus svaes on capital, staff and lower input costs
- access to skills and resources lacking in the bus
- flexibility - variations in demand are managed by external service providers
74
what are the startegic beenfits of outsourcing
- using outsorucing to get around tarde barriers eg global buses that produce in China
- gaining expertise - outsourcing to service providers used by compeititors
- trading in different time zones eg bus in aus conduct ops during the dar and outsource admin tasks to China to have them processed overnight
75
what are the disadv of outsourcing
- payback periods and cost - initial organisational charges by incur substantial costs but signif cost saving in the long term
- comms and laguage - language and cultural differences must be manages
- loss of control - over quality
- organisational change and restructuring - outsourcing usually results in downsizing causing domestic unemployment --> redundancy costs --> low morale --> industrial action eg strikes --> reputational damage
- loss of corporate memory and vulnerability - key knowledge of processes and solutions is lost to buses, also leaves buses vulnerable to major disruptions if outsourcing disrupted
- changing political or eco circumstances - eg use of eco sanctions over political disputes
76
what is technology used for
tech may be applied to inputs, transformation processes and outputs, or used to make mangerial and administration functions smoother
77
what is an important thing to consider when adopting tech as an ops strat
choosing the lebel of tech employed and the timing of its adoption is a key decision - goign too early has high risk, while going too late can result in competitive disadvantage and lost customers (right balance is critical)
78
what are some of the reasons buses outsource the development of new tech and tech-based roles
- new forms of tech expensive
- require specialised staff as they are complicated, req regular updating and ongoing costs
- ongoing training and development for staff
79
what is leading edge tech
the tech that is the most advanced or innovative of its kinds at a particular point in time
- buses can distinguish their bus ops by using best tech available (comparative advantage)
80
what are the adv of adopting new tech
- buses able to boost market share through product improvements
- operational efficiencies that allow them to reduce prices resulting in higher revenues and profitability
81
what are the risks of adopting new tech
- decision to adopt can be made too early, before its fully developed and adapted for the purpose needed
- comeptent technical support may not be readily available
- may be bugs which can be costly during early stage of usage
- if the wrong decision is made, serious costs and time are wasted with inevitable damage to customer satisfaction lvls and comepititve advantage
82
what is established tech
tech that has been developed and is widely used and well-serviced therefore attract no risk to the ops process
- universal availability
- may not confer comeptitive adv but not using may result in competitive disadv
83
what is inventory/stock
the amount of raw materials, work-in-progress and finished goods that a bus has on hand at any particular point in time
84
how does inventory management differ between different buses
- some managers think of stock as being unused or underutitlised reosurces and therefore waste
- eg car dealership keeps a few models for the colour whereas a supermarket stocks large quantities.
85
what are the advnatges of holding stock
- consumer demand easily met, avoiding lost sales to comepititors
- if particular line runs out, an alternative can be offered
- reducing lead times b/w order and delivery
- stock of inputs or finished goods leave a bus less exposed to supply chain disruptions
- older stock can be sold at reduced prices, encouraging cash flow
- producing in bulk allows bus to enjoy ecos of scale
86
what is the general trend in bus ops in recent decades
to hold as little stock as possible and to adopt a 'make-to-order' approach (some reversal since the pandemic)
87
what are the disadvantages that outweigh the adv of holding stock
- costs associated with holding stock (often up to 30% of the value of stock), including storage charges, spoilage, insurance, theft and handling expenses
- the invested capital, labour and energy cannot be used elsewhere as its been used to create the stock
- the cost of obsolescence, which can occur if stock remains unsold (due to changing tastes or innacurately forecasting the level of demand
88
wgat si the formula for gross profit
sales - COGS
89
what is the formula for COGS
opening stock + purchases - closing stock
90
what is the formula for net rpofit
gross profit - expenses
91
what is a last-in, frst out (LIFO) system
the most recent inventory is sold first
- used for non perishable goods
92
What is a 'first-in, last-out' FIFO system
the oldest stock will be sold first
- eg perishable goods to ensure that stock remains fresh and in good condition for consumer
93
what is Just-in-time (JIT) system
‘lean’ operations process, produce only enough to meet demand
- to eliminate wasted inputs
- eliminating/minimising inventories reqs highly dependable supply chain
- reqs accurate forecasting or demand and quick responses
- not a valuation method
94
assuming that inventory costs are rising over the accounting period, LIFO will tend to:
- overstate COGS (since LIFO uses the latest, higher cost, inventory, it appears as tho the company spent more)
- understate profits (higher COGS means lower gross profit and net income since expenses are high)
- understate closing stock (older inventory which remains in stock is cheaper --> ending inventory is lower than current makret price
95
Assuming that inventory costs are rising over the accounting period, FIFO will tend to:
- Understate COGS (FIFO uses older cheaper stock -> appears as tho the compnay spent less
- Overstate profits (cos COGS is lower, gross profit and net income are artificially higher --> more tax)
- Overvalue closing stock (the remaining stock is more expensive)
96
what has been the trend in holding stock and utilising the JIT system
- buses who have previously used the JIT system have been rethinking their supply lines to avoid an overreliance on particular suppliers that increases the supply chain vulnerability that can result in inventory shortages
- buses have been keeping higher levels of inventory allowing for longer lead times
- some buses have necessitated investment in warehouse facilities as the potential cost of not having access to stock far outweighs the cost of holding inventory
97
define quality management
refers to the processes that a business undertakes to ensure consistency, reliability, safety and fitness for purpose of product
97
define quality
quality is a term used to describe the degree of excellence of a product or service, and its suitability for its stated purpose
98
what is the conflict b/w attempting to achieve cost and quality
they can be views as alternative performance objectives -
striving for low costs will involve sacrifices in quality , while striving for quality will involve higher costs
99
what are the approaches to achieving quality within bus ops
- quality control - inspection, measurement and intervention
- quality assurance - application of international quality standards
- quality improvement - continuous improvement and total quality management (TQM)
100
what is quality control
the use of inspections at various points in the production process to check for problems and defects
101
what does a bus need to have before implementing quality control
a bus needs to have defined quality standards and parameters for its products and processes
102
what is the course of action to assess quality of a product
- define quality standards
- range of tests designed to assess the quality against those standards
- any failure to meet pre-determined quality targets would need to be reassessed and appropriative action taken to correct issues
(reactive approach)
103
what is quality assruance
the use of a system to ensure that set standards are achieved in production
- taking a series of performance measurements and assessing them against pre-determined quality standards
(proactive approach)
104
what are aspects of quality important to quality assurance
- fitness for purpose - how well a product does what it is designed to do
- the desire to be 'right the first time' - dont need to reowrked, wasting time, money, energy and other resources
105
what is and important control mechanism for quality globally
a series of internationally recognised quality assurance standards have been developed
- ie a component made in south korea will be of similar quality to aus components
- eg ISO 9000 series of quality certifications (voluntary but enhance competitiveness)
106
what two aspects does quality improvement focus on
- continuous improvement
- total quality management (TQM)
107
what does continuous immporvement involve
- continuous improvement involves an ongoing commitment ot improving a bus's products and processes
- idea that perfection can never be achieved
108
what determines the difference in monumental breakthroughs in improvement or incremental improvement
- the inclusion of staff in improvement processes
- all staff encouraged to demonstrate initiative and to suggest areas where improvements can be made
109
what is the six sigma approach
the six sigma approach seeks to identify and remove the causes of problems in ops processes, so that a bus achieves virtually defect free production
110
what is total quality management
- TQM is a 'holistic' approach, in that delivering quality to customers is seen as a commitment and responsibility of every employee of the bus
- it is an ongoing business-wide commitment to excellence that is applied to every aspect of a bus
111
what are the benefits of TQM
- if products build right in the first place, the expense of inspections and the waste of rejected products would be avoided
- increase of market share via hgiher quality and lower priced products
112
what four elements are req'd to achieve TQM objectives
- benchmarking
- employee empowerment
- a focus on the customer
- continuous improvement
113
why do buses need to keep up with changes in the bus environment
- buses need to adapt their ops to keep up with new processes, applications and ideas
- failing to adapt would result result in a loss of compeititveness, and ultimately, bus failure
114
what changes may arise in the bus envrionment externally
changes to:
- laws and regulations
- economic conditions
- social changes over time
- technological breakthroughs
115
what changes may arise in the bus envrionment internally
- initiatives of staff
- implementation of innovative tech
- the need to replace an ageing workforce
116
what are the overall reasons for resisting change often by various stakeholders (owners, managers, employees)
- involves risk, uncertainty, stress and a great deal of effort
- financial costs or psychological reasons
- the benefits of proposed change may nto outweigh the financial costs
117
what are the main financial costs associated with change
- purchasing new equipment
- redundancy payouts
- retraining
- reorganising plant layout
118
why is retraining a reason for resisting change
- change reqs employees to acquire different work skills due to changing job roles or to be trained in new software due to purchase of tech
- there may be decline in short term and increase in errors in short term to master new skills or tech and employees reluctant to learn new skills --> resistance
- managers may decide not to implement to avoid retraining costs and cost of disruption
119
why is purchasing new equip a reason for resisting change
- the cost of new machinery or tech can be high, however, benefits may recoup the large investment
- buses can lease as an alternative to the high cost but if the gains are too small then managers may decide to continue with existing equip until there is greater evicdnece of improvements
120
why are redundancy payouts a raosn for resisting change
buses may defer changes to avoid such large financial outlays: employees who have been w/ bus for at least 12 months get paid lump sum if made redundant
121
why is reorganising plant layout a reaosn for resistance to change
- major changes req extensive reorg of the layout within a factory/office
- high costs (trnasporting equip, installation of power)
- downtime and short term productivity losses when transferring form old to new (employees need time to familiarise)
122
what is the psychological change to resistance called
inertia - the feeling of uncertainty or fear of the unknown can lead ppl to resist iminent change
- magnified by threat fo losing job
123
how are managers successful in dealing iwth changing circumstances
successful managers anticipate and adjust to changing circumstances
(being proactive instead of reactive) to manage change effectively
124
to be constructive, changes must:
- occur at a pace at which they can be absorbed and integrated into the bus
- be evaluated thoroughly to assess their overall impact
- be introduced into a workplace culture that supports employee partcipation
125
what are the general steps or formalised approach to managing change
1. identify the source(s) of change and assess if there is a need to accommodate change thru adjusting bus processes
2. communicating with employees abt the need for change and getting widespread support for change - more liekly to embrace and lower resistance
3. creating a culture of change - stajeholders undertsand that change is constant and support it (can use change agents ie ppl who consolidate the msg about the need for change)
4. setting ahcievable goals and rewarding achievements - important ot have short term wins when undertaking change to motivate (goals that are too difficult result in disillusionment undermining further efforts)
126
what is global sourcing
refers to buses purcahsing suppliers or services without being constricted by location
- ops strat that involves the sourcing of any bus ops that gives a bus cost adv (ie its not just sourcing inputs from overseas but outsourcing bus ops too)
- global sorucing allows bus to choose suppliers based on on cost, efficiency, skills, productivity, and the ability to operate across different time zones, ensuring the best possible decision
127
what are the challenges arising with gloval sourcing
- relocation of ops
- increased cost of logistics, storage and distribution
- managing diff regulatory reqs b/w nations
- increased complexity of overall ops
- ER fluctuations
- language barriers and cultural variations
- misundertsandings due to poorly negotiated sevrice level agreements (SLAs)
128
what is ecos of scale
the cost adv that cna be gained by producing on a larger scale (can lower per unit costs of inputs by producing a greater amount of output)
129
how can buses increase their benefits from ecos of scale
buses operating exclusively to one nation, have a limited market but by expanding into global makrets, a bus will have a much larger potential market, allowing it to increase its level of production and benefit form the cost adv of ecos of scale
130
what are the benefits of expanding into overseas makrets on ecos of scale
- lower input costs from bulk purchasing discounts
- spreading cost of inputs over a much larger volume of output
- cost svaings in transportation as fuller container loads can be sent
- lower interest rates on debt as larger sums can be borrowed
131
what is scanning and learning
scanning the global envro and learning form the ways that leading buses around the world operate
- leading buses used as benchmarks for buses attmepting to implement their best practice (any tcehnique or method that is recognised as delivering superior results)
132
what are some sources of learning abt other buses
- looking at other buses best practices
- management journals
- industry and bus associations (bus unions)
- conferences and other forums
- inputs of managers and staff who have worked in other buses and in other nations (diversity of experience helps buses learn how to handle any issue with flexibility and insight)
133
what are the advantages of R&D
- create leading edge tech, innovative products and solutions
- more effectuve methods of production
- establish and maintain comepititve adv
134
what are the financial aspects of R&D
- buses sacrificing current production and operational spending to generate products that will increase revenue and profits in the long run
- govs encourage R&D by offering grants and tax incentives
135
what is advantageous strat for outsourcing R&D
establish R&D in countries which have reputation for outstanding educational facilities or special knowledge in a particular area eg India and tech
