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Operations Strategies booklet Flashcards

1
Q

Operational obj

A

targets a business sets in order to produce goods or services in the most effective way

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2
Q

Quality targets

A

Cost targets
Innovation
Efficiency
Environmental targets

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3
Q

Influences on objectives

A

Internal:
Finance
Marketing
People/HR

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4
Q

Scale- production types

A

Job production- each customer individual needs
Batch production- group orders
Flow production- mass- everyday standardised items

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5
Q

Mix will depend on

A

Relative price of resources
Nature of the product
Availability of resources
State of technology

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6
Q

Economies of scale- Internal

A 
About spreading some form of fixed costs across more units 
Internal:
Technical- auto production lines
Purchasing- buying in bulk
Specialisation- specialist managers 
Also financial and managerial
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7
Q

Economies of scale- external

A

About spreading some form of fixed costs across more units
External:
Labour- availability of skill in specific area
Joint ventures- spread cost and risk
Support services- cluster in certain areas

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8
Q

Diseconomies of scale

A

as business grows in size and produces more units of output it experiences rising average cost of production

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9
Q

Inputs in production

A 
Land
Labour
Capital 
Natural resource
Enterprising
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10
Q

Labour intensive- Advantages

A 
High levels of workers in production
Advantages:
Staff flexible to meet demand
Personal touch- customer needs
Tailor made products
Labour can provide feedback
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11
Q

Labour intensive- Disadvantages

A 
High levels of workers in production
Disadvantages:
Expensive in long term 
Inefficient and inconsistent levels of effort
Labour relation problems
Shortage of skilled labour
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12
Q

Capital intensive- Advantages

A 
Uses high levels of capital (machinery) in production
Advantages:
Reduces human error 
Greater speed and uniform effort
Technical economies of scale
No problem with labour shortage
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13
Q

Capital intensive- disadvantages

A 
Uses high levels of capital (machinery) in production
Disadvantages:
Initial high cost and possible training
Lack of flexibility- fall in demand
Machinery lacks initiative
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14
Q

Innovation- Aims

A 
Means bringing a new idea into being within market place or workplace
Aims:
USP
Better quality
Efficient ways of producing
Better ways of doing things
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15
Q

Innovation- process

A 
Means bringing a new idea into being within market place or workplace
Process:
Increasing efficiency
Improve quality of manufacture
Improve quality of service
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16
Q

Innovations- Implications

A 
Means bringing a new idea into being within market place or workplace
Finance- investemtn expensive
HR- Staff consulted about changes
Wokrforce planning issues
Staff need to be trained
Marketing- market research- demand
4p's customer needs and wants
Advertising to launch new product
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17
Q

R&D- aims

A 
Extensive scientific research into the product and its design- prototypes
Aims:
USP
Better quality
Efficient production
18
Q

Spending on R&D Benefits

A

Creates USP
Differentiate- comp advantage
Efficient production process
Premium pricing

19
Q

Spending on R&D drawbacks

A 
Costs
Risk of failure
Timing of release
Risk of being copied
Intellectual property protection
20
Q

Influences on innovation

A 
Cannot raise necessary funds
pressure from investors
Low success may deter investors
Business culture
business strats- risk
21
Q

Benefits of innovation/R&D

A

USP
Firms reputation- quality innovative
Higher levels of efficiency
Intellectual P.P

22
Q

Drawbacks of innovation/R&D

A

Cost- R&D
R&D time consuming
Other firms launch ‘me too’ products
Image- failure

23
Q

Good location benefits

A 
Competitive unit cost
Optimal revenue opportunities 
Acceptable ARR
Sufficient production capacity
Labour force access
Diversity
24
Q

Factors affecting location decision

A 
Cost and availability of land
Cost and availability of labour
Communication links
Transport costs/Proximity to the market
Availability of raw materials
Government location incentives
25
Advantages of multi site locations
Closer to customer/markets- monitor trends better Prestigious location as well as cheaper sites elsewhere Abroad- reduce costs Reduce risk of supply disruption Smaller businesses operating as conglomerate- each element in optimal place Delegation of authority Marketing and management economies of scale Easier to flex capacity
26
Disadvantages of multi site locations
Co-ordination and communication problems Lack of control and direction Different cultural standards and legal systems in different countries Increased strategic risk Cannibalism- too close together Greater operating costs- transporting materials
27
International location- Quantitative
Tax advantage Exchange rates Lower overseas cost
28
International location- Qualitative
Access to new market Political Stability Ethical issues Image
29
Offshoring
Shifting production overseas
30
Reshoring
Bringing manufacturing back to the UK
31
Lean Production
range of measures used in attempt to reduce waste and cost in production
32
Critical path
``` 'network analysis' 1. Right to left EST top quadrant Take highest result 2. Right to left LFT bottom quadrant Take lowest result ```
33
Benefits of critical path
Identify what activities involved in project or process Calculate earliest time when project completed Identify critical activities- influence speed of whole project Produce/develop faster than competition Implement just in time ordering Use CPA as control to review progress
34
Limitations of Critical path
Relies on estimate JIT- reliability of suppliers CPA- shows quickest way but not most effective resource use All projects must be managed properly
35
Just in time
Aims to minimise: Production time Production costs Amount of stock held in the factory
36
Advantages of JIT
Less cost of holding stock Less working capital required Less ruined stock Lower associated stock costs
37
Disadvantages of JIT
``` Little room for error Very reliant on suppliers Unexpected orders harder to meet High initial set up costs Complex system ```
38
Cell production
Manufacturing an item, organising workers into cells (teams)
39
Cell Production advantages
``` Improved communication Workers become multi skilled- adaptable Greater motivation Quality improvements Increased productivity Reduced absenteeism + labour turnover ```
40
Cell Production disadvantages
Trust and participation- exploitation Not worthwhile- small scale Efficient scheduling of workers Good recruiting/ training needed
41
Benchmarking
Measuring performance vs competition- learnt from best in the world
42
Kaizen
Business with continually update and improve their products and marketing

Business (10 decks)

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