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Flashcards in Operations Deck (75):
1

Role of operations management

- strategic role of operations management
- goods and services in different industries
- interdependence with other key business functions

2

What is operations in charge of?

- productions of goods and services
- POCC - planning, organising, coordinating and controlling

3

Operations process

- inputs
- transformations
- outputs

4

Strategic role of operations management

used to GAIN or MAINTAIN COMPETITIVE ADVANTAGE
- cost leadership
- good/service differentiation

5

Cost leadership

a cost strategy aiming to have the lowest cost of operations ( creating goods and services) in the industry allowing them to gain a competitive advantage in the market

6

Goods and services differentiation

Product Differentiation:
Goods:
- Varying the Product’s features (colour/add on features)
- Varying product quality (Lexus, Toyota)

Services:
- Varying time spent on service - Varying qualifications and experience/ expertise
- Varying quality of materials and technology used in service

7

Cross branding

- differentiation can be created through cross branding
- such as Woolworths and Caltex being in alliance - customers getting advantages

8

Standardised Products

- constant/uniform characteristics with every standardised product

9

Customised Products

- focusing on the desires of the customers

10

standardised in services

- performed no matter the client/ customer
- fast food service, same for everyone

11

Customised services

- changing depending on the person
- doctor - depending on client

12

Intermediate goods

- used in production process, already been produced, technology and machinery

13

Influences on the operations of the business
- GGQ TELCS

- Globalisation, technology, quality expectations, cost based competition, government policies, legal regulations, environmental sustainability

- CSR
--> difference between legal compliance and ethical responsibility
--> environmental sustainability and social responsibility

14

Globalisation

- integration of trade between nations bringing the world closer together business wise.
- this allows some business to get their resources ( inputs ) for a better price
- bigger market opportunities

15

Imitators and innovators:

Imitators
- creating products similar to those already created, but will aim to do it at a lower cost

Innovators
- creates a new product, leading the market

16

Global sourcing

- where the products are sourced from overseas

17

Quality expectations

- cheaper, faster resulting in higher quality products.
- less waste
- (CAM) computer aided manufacturing - where the manufacturing process is controlled by computers.
- although the tech comes with a cost in the long run saves time, money and reduces waste.

18

Quality Expectation

- consumers will expect a certain level of quality based on the brand and the price
- durability, reliability, fit for purpose
this can be achieved through
1. Product differentiation
2. Reduced costs - for the quality

19

competitive advantage

- refers to meeting consumers needs and wants within the price point they wish to pay

20

Cost based competition

- Reducing costs to a min, maintaining profit margins --> cost leadership

21

fixed costs

- do not change regardless of business activity levels

22

variable costs

- those that change according to the business activity level

23

Government policies

- legislation that have to be followed
- therefore some business activities may have to change to abide the government rules

24

Legal regulations

- "compliance" the range of laws of which a business must comply with
- WHS
- Environmental protection

25

Environmental sustainability

- making sure the use of materials and production methods are environmentally friendly
- not affecting our environment for future generations
- Qantas creating 60% less carbon emissions due to new technology of A380 jets

26

CSR

- people, planet, profit
- not so much about making a profit, but about giving and serving to the society
-

27

Triple bottom line

- profit
- social responsibility
- environment protection and sustainability

28

Ethical responsibility

- doing something that you think is fair and morally correct
- something that DOES NOT have to be abided.

29

Legal compliance

- something that needs to be complied with, law, regulations
- penalties occur is not

30

Environmental sustainability

- use of natural resources
- less waste, emissions

31

Operations processes

- inputs
- transformation
- outputs

32

Inputs

LERM
- Labour - physical and mental (GETTING IT DONE)
- Energy - electricity and fuel (HOW WE GET IT DONE)
- Raw Materials (WHAT WE USE)
- Machinery and Technology

33

Transformed resources

- materials
- information
- customers

34

Transforming resources

- human resources
- facilities

35

Transformation Process

VVVV
- volume
- variety
- variation in demand
- visibility

36

Volume in transformation process

- How much to make?
- greater volume results in economies of scale (saving in cost by the increase of production) and specialisation

37

Variety in transformation process

- what range of outputs should be made?

38

Variation in demand in the transformation process

- how can the operations process respond to change in demand?

39

Visibility in transformation process

- how much customer contact should there be??
- the less customer contact usually means that there is less problems with their products
- this could also be being apart of a loyalty club - qantas

40

sequencing and scheduling in the tranformation process

- sequencing - the order of activities taking place in operations
- scheduling - length of time activities take

41

Gantt charts sequencing and scheduling

- used to be organised and set out the tasks that need to be completed with the specific time required
- make it easy to monitor progress

42

Critical Path Analysis sequencing and scheduling

- SHORTEST length of time it takes to complete ALL necessary tasks

43

Technology in the transformation process

- used to help and improve how well the product is being made

44

Task design in transformation process

- involves classifying/organising job activities - making it easier for employees

45

Process layout in transformation process

- arrangement of equipment, machinery and staff within the workplace
- makes the production more efficient
- having the production line in order = streamline

you could set it out
1. process layout - machines are grouped together due to there function
2. product layout - sequenced so the tasks are performed in order
3. fixed position layout - where a machine remains in its position due to its weight or size

46

Monitoring, control and improvements in transformation process

KPI's - key performance indicators --> are you meeting the target?? If it is not met the business can...

1. monitoring - measuring actual performance against planned performance

2. Control - corrective action if your KPI isn't met after monitoring
- training staff
- feedback
--> if a goal is never being achieved then maybe the goal needs to be changed.

3. Improvement
- reduction of inefficiencies, waste, poor work and bottlenecks
improvements can be made through
- Time - reduce bottlenecks
- Process - reduce time spent between production processes
- Quality
- Cost
- Efficiency - reduce waste

47

Outputs

- customer service
- warranties

- Outputs are goods/services that are produced to meet the needs of consumers

48

Customer service in outputs

- exceeding standards of customer leads to long-term customer relationships
-

49

Warranties in outputs

- a way to measure effectiveness of operations depending on the number or warranty claims
- warranty claims - made against goods that have defects

50

Performance objectives in Operations startergies
*********
WHAT IS THE DIFFERENCE BETWEEN LEAD TIMES, PROCESS TIMES

Strategies must be set so the business can work towards performance objectives

- QCDS FC

- quality

- speed ( wait times (before the product gets to you), lead times(start and finish of generating a product)

- dependability - durability

- flexibility

- customisation - meeting customer desires

- cost effective - increasing profit

51

New product or service design and development - operations strategies

- when introducing a new product or service they need to go through SEVEN STEPS

1. idea generation - competitors, customers, workers

2. Idea screening - analysis

3. concept development/testing - feedback

4. business analysis - selling price, volume, profitability

5. marketing strategy - marketing mix(4 P's, price, product, promotion, place)

6. test marketing - often within a specific area

7. commercialisation - timing and location considered

52

Supply chain management

- purchasing and making sure the supply for the production process is smooth running

53

Logistics in supply chain management

- part of the supply chain management that plans and control the effective and efficient flow of goods and services.
1. transportation
2. storage, warehousing, distribution centres
3. handeling and packaging

54

E-commerce in supply chain management

- being able to sell your products online to almost anywhere in the world.
- this is when the demand increases
E - procurement - supply chain managed through electronic ordering.

55

Global sourcing in supply chain management

- the purchasing of supplies or services without being constricted by location
- external providers performing business activities or producing resources.

56

Outsourcing advantages

ADV
- less spent on capital
- concentrate on core business processes
- use specialised services
- sharing business risks

57

Outsourcing disadvantages

- Less management control
- difficultly with quality consistency
- loss of jobs within the business(redundancy)
- potentially more expensive
- security, confidentiality, communication being problems

58

Technology in operation strategies

LEADING EDGE technology offer significant improvements in reaching goals/targets gaining a competitive advantage

ESTABLISHED technology ***********

59

Inventory Management

- Adv and dis of holding stock
- LIFO
- FIFO
- JIT

60

Advantages of holding stock

- ensures there is an adequate supply for demand/production
- always backup products, sales cant drop because they don't have it in stock
- allows business to buy in bulk

61

Disadvantages of Holding stock

- cost of storage
- unused stock does not generate revenue
- held stock is at a risk of damage

62

LIFO - last in first out

- used for products that DO NOT PERISH

63

FIFO - first in first out

- generally known as the restocking management
- USED FOR PERISHABLE PRODUCTS

64

JIT - just in time

- new inventory is ordered only when it is required
- holding stock that isn't generating any revenue
- synchronisation of supply with production demand, as demand will fluctuate
- although if demand rises, using JIT the business will not necessarily be able to adapt to changes as they may not have the required stock

65

Quality Management

- control
- assurance
- improvement

66

Control as a quality management

--> controlling the quality of the products and services
- reduces problems, defects --> through the use of inspection at various points throughout the production process
-

67

Assurance as a quality management

- attempts to improve and stabilise production
--> this is done to minimise the issues that led to defects in the first place.

- how well the product does what it is designed to do
- desire to achieve 'right first time'

68

Improvement as a quality management

- continuous effort to improve goods, services and the process.
- seek to streamline process, eliminate waste, improve quality and max efficiency

69

overcoming resistance to change

- financial costs
- purchasing new equipment
- redundancy payments, restraining, reorganising plant layout,
Inertia - the resistance to change from employees, will often result in a difficulty to enforce the change by the owners

70

why does resistance to change occur?

- financial reasons
- psychological/emotional reasons

71

Global factors

- global sourcing
- economies of scale
- scanning and learning
- research and development

72

Global sourcing as a global factor

- refers to sourcing goods from outside business globally

Benefits
- cost advantages
- access to new tech
- expertise in what you want

Challenges
- increased costs in logistics
- exchange rates fluctuating
- language and cultural barriers

73

Economies of scale as a global factor

- gained cost through increased production
- this could be due to the benefits of global sourcing.

74

Scanning and learning

- from scanning the global environment and learning from expertise in their industry --> business can gain insight into ways to improve and solve any of their issues

75

Research and development

- R&D helps business to create innovated products - ones that are improved