unit 3 aos 3 Flashcards
operations management
1
Q
What is operations management?
A
Operations management is responsible for using operations strategies to create, operate and control the transformation of inputs from a variety of resources into outputs (ie, goods or services) that satisfy the demands of
customers.
2
Q
What strategies are used in operations management?
A
there are four areas of strategies that can be used to improve the efficiency and effectiveness of an operations system.
- technological developments.
- materials.
- quality.
- waste minimisation in the production process, including the principles of lean management.
3
Q
What should an operations manager be doing in relation to these strategies?
A
should be constantly asking whether the operations strategies that have been implemented, or are about to be implemented, improve the effectiveness and efficiency of the production process.
4
Q
productivity
A
a measure of the amount of output produced by an operations system, as compared to the amount of inputs used in the production process.
- in a manufacturing business: measured by comparing the number of goods it produces to its inputs
- in service business: since input is staff hours, productivity is measured through customer service and satisfaction
5
Q
Efficiency
A
is how productively a business uses its resources when producing a good or service.
If a business’ use of resources is optimised, the following outcomes may occur:
(1) The production costs can be minimised.
(2) The levels of waste can be decreased.
(3) The time taken to produce the goods or services can be reduced.
6
Q
Effectiveness
A
is the extent to which a business achieves its stated objectives.
therefore, operation managers select the strategies to be used to help the business’ operations system achieve its stated objectives, and thus increase the effectiveness of the operations system.
7
Q
If the business’ operations system is effective and efficient …
A
The operations system is achieving its stated objectives.
Additionally, when producing a good or service, the operations system is using its resources productively.
8
Q
The relationship between operations management and business objectives
A
Operations managers can contribute to the achievement of business objectives by improving levels of efficiency
and effectiveness in a business’ operations system via the implementation of strategies related to technological developments, materials, quality and/or waste minimization in the production process.
9
Q
link between OM and making a profit/meeting shareholder expectations
A
The efficiency and effectiveness of an operations system has a direct impact on these BO:
- the price and quality of a business’s goods and/or services because the business’ revenue,
depend on the business’ operations system.
A business’ revenue is the amount of money it earns from sales.
The more revenue a business earns, the more profit it tends to make.
- also the cost of sales, is a factor that directly affects the business’s gross and net profit
10
Q
What is an operations system?
A
a series of processes that is used to transform inputs (resources) into outputs
(goods or services).
11
Q
What are the key elements of an operations system?
A
inputs, processes and outputs
12
Q
manufacturing business
A
transform inputs into tangible products (specifically, goods).
13
Q
service business
A
businesses transform inputs into intangible products (specifically, services).
14
Q
inputs
A
the resources used in the production process to create goods and/or services.
1)materials
2) capital resources
3) labour (human resources)
4) utilities
5) information
6) time
15
Q
categories of Inputs:
1) materials
A
raw materials: unprocessed resources that are taken directly from the natural environment, such as unprocessed minerals or farm produce.
AND/OR
component material: are processed materials which are generally purchased from another manufacturing business.
16
Q
categories of Inputs:
2) capital resources
A
human-made objects that contribute to the production process, but are not consumed or
converted by the process.
eg. machinery, equipment and property necessary to conduct operations
17
Q
categories of Inputs:
3) labour (human resources)
A
to the mental and physical effort and skills contributed by human beings to the production process.
18
Q
categories of Inputs:
4) utilities
A
includes basic services that are used in the production process, such as the supply of gas, electricity and water.
19
Q
categories of Inputs:
5) information
A
- an intangible input that can contribute to the production process.
- can include general information on a market or industry, information on new
customer trends and information on new ways to carry out a production process.
20
Q
categories of Inputs:
6) time
A
a non-renewable resource, is used can have a significant impact on the efficiency and
effectiveness of the production process.
21
Q
How do inputs differ between manufacturing and service businesses?
A
Manufacturing businesses tend to make more use of capital resources, and less use of labour and information, than service businesses.
22
Q
What are processes?
A
the actions performed by a business to transform inputs (resources) into outputs (goods or services).
23
Q
The link between processes and productivity / quality
A
Businesses often try new processes to help improve the productivity of the production process and/or the quality of the production process’ outputs.
24
Q
How do processes differ between manufacturing and service businesses?
A
1) the product that’s produced:
- manufacturing businesses transform inputs into tangible products WHILE service businesses transform inputs into in tangible products
2) The use of capital resources / labour
- operations system of manufacturing businesses tends to rely heavily on capital resources to transform inputs into outputs. WHILE the operations system of service businesses tends to rely heavily on labour
25
What are outputs?
the final good or service produced as a result of the business’ operations system and provided to the business’ customers.
26
The link between outputs and customers
Outputs should meet customer expectations relating to quality, cost and availability.
27
The link between outputs and the operations system’s inputs and processes
The quality of an operations system’s outputs is impacted by the inputs and processes in the operations system.
28
How do outputs differ between manufacturing and service businesses?
1) The product that’s produced (tangible vs intangible)
2)The nature of the product that’s produced
- in manufacturing, goods tend to be homogenous WHILE a service tends to be differentiated
29
What is the link between strategies related to technological developments and competition
Both manufacturing and service businesses can use strategies related to technological developments to increase the efficiency and effectiveness of their operations system, and thus to enhance their ability to compete with other businesses.
30
what is Automated production lines (APLs)?
- mainly only for manufacturing businesses
- it consists of machinery and equipment that is arranged in a computer-controlled sequence, with component parts added to the output (the good) as it proceeds through each step.
- Generally, goods proceed through each step in an APL via a conveyor belt.
31
the relevance of ... in relation to APLs:
1) employees: generally their role is reduced to the following tasks =
- system design
- monitoring the APL
- adjusting and maintaining the machinery and equipment, as needed
- supply the APL with component material
2) robotics
- a highly specialized form of technology that is capable of carrying out complex tasks.
- A typical key feature of an APL is the use of robotics.
32
Automated production lines (APLs):
impacts on efficiency
a) time: APLs produce significantly faster than humans, increased output
b) labour costs: reduced as majority of work is carried out by automated machinery and equipment, and less is done by humans
c) cost of materials: the use of robotics in APLs are more accurate than labour, thus reduce waste in comparison to humans doing that work
33
APL advantages
- products being produced significantly faster than when produced by humans, thereby increasing the output of the production process, + operations system’s productivity.
-Employees need food, breaks, temperature control and etc, Machines don’t. = saves money + time
- Decreased waste due to precision.
- Improved consistency of goods.
- Employees can avoid dangerous/mundane tasks.
34
APL disadvantages
- Very costly to initially set up
- Employees can be made redundant.
- Production is reliant on technology (may break down)
35
Computer-aided design (CAD)
computerised design tool that enables a business to use input parameters to generate and modify three-dimensional diagrams of products before the products are produced.
- used by architects, designers and engineers
36
Computer-aided design (CAD) relevance
1) better visualization as it allows viewing from multiple angles
2)helps calculate material use and time to produce
3)can be used to test certain aspects of a product.
4)can be used to customise a product to meet the needs of a client or customer.
37
Computer-aided design (CAD)
impact on efficiency
reduce time and labour needed to design a product, allowing resources to be used more optimally and productively
38
Computer-aided design (CAD)
impact on effectiveness
- allows various prototypes to be developed and best design can be chosen. this choosing allows the business to manufacture the highest quality design, which can increase customer satisfaction, sales and market share
39
Computer-aided design (CAD)
advantages
- increased quality of products
- increased rate of production becayse faster to modify than when manually designed (drawing)
- reduce labour costs with designing as it requires fewer employees than designing manually + time save
40
Computer-aided design (CAD)
disadvantages
- software can crash, which'll interrupt production of design and may loose the work
- expensive to initially purchase and keep ip to date
- training would be required to use = time-consuming and expensive
- loss of jobs
41
robotics
- programmable machines that are capable of performance specified tasks.
- can efficiently complete specialized tasks with high levels of precision and accuracy within a business’s operations.
42
Relationship between Robotics and APL….
Automated production lines often involve the use of robotics,
43
robotics:
efficiency
- perform specific tasks quickly and with high levels of accuracy. this can reduce time and resource wasted in production,
44
robotics:
effectiveness
can perform specific tasks quickly with high levels of precision, which minimizes errors during production. this enhances overall quality of final product and customer satisfaction, sales and market share
45
robotics:
advantages
-improved accuracy can reduce errors and the number of resources wasted in production.
- Removing the need for employees to complete dangerous tasks can improve workplace safety.
- Tasks can be performed much faster than human labour.
46
robotics:
disadvantages
- Very costly to initially set up
- A business may develop a poor reputation if it implements robotic technology that makes employees redundant.
47
Computer Aided Manufacturing (CAM)
involves the use of computer software to direct and control the automated machinery and equipment that is used in a manufacturing process.
- Generally, the code used in CAM can be created using data extracted from CAD.
48
CAM: efficiency
can reduce time and labour needed to design a product, allowing resources to be used more optimally and productivly
49
CAD: effectiveness
allows business to develop various prototypes with the best being chosen to increase customer satisfaction, sales + share
50
CAM: advantages
- Greater accuracy and consistency of products
- Speeds up the manufacturing process (no human restraints)
- Reduction of wages (removal of roles)
51
CAM: disadvantages
- Redundancy in employees
- Production reliant on technology and machinery
- Expensive in the ST to implement
52
Artificial intelligence
involves using computerised systems to simulate human intelligence and mimic human behaviour.
- enable computerised machines to learn from past experience, problem solve, process and understand language, and reason with logic.
53
Artificial intelligence:
efficiency
helps reduce the time and labour used to complete complex tasks that would usually require human intelligence. allows resources to be used more optimally and improve productivity
54
Artificial intelligence:
Effectiveness
can perform complex tasks, such as providing timely and high - quality customer assistance. can thus improve customer satisfaction levels and allow for increases in sales and market share
55
Artificial intelligence: advantages
- ability to provide 24/7 customer service, which can improve customer satisfaction and the business's overall reputation
- may remove tedious tasks for employees, which may improve job satisfaction.
- improved accuracy can enhance product quality and increase customer satisfaction, which can increase sales revenue.
56
Artificial intelligence: disadvantages
- Redundancy in employees
- Production reliant on technology and machinery
- It may be costly to recalibrate and maintain artificial intelligence
57
online services
Online services are services that are provided via the internet.
58
online services: efficiency
59
online services: effectiveness
60
online services: advantages
- ensures consistency of information
- Improves the productivity of support staff
- Reduction in amount of physical stores
- Increased amount of sales exposure
61
online services: disadvantages
May make some employees redundant
62
what is materials management?
relates to organising and monitoring the use, storage and delivery of raw and component materials to ensure that the right amount of inputs is available when required by the business’ production process (ie, at the right time).
63
what is inventory
property that is held in stock by a business.
eg. finished goods, input material and raw materials
64
What are the costs of a business having inventory?
a) may be lost, damaged or spoiled
b) Staff, machinery and equipment are required at the location in which the inventory is stored (eg, a warehouse)
to manage and move the inventory.
c) takes up lot of space that needs to be paid for
d) the space could be used for other productive purposes
65
what is materials handling?
the physical movement (ie, handling) of goods in warehouses and at distribution points.
- it can result in a more efficient production process, and thus cost savings
- proper handling = reduction is workplace accidents
66
what is forecasting?
a materials planning tool that involves a business using data from the past and present, and the analysis of trends, to attempt to predict future demand for the business’ products.
- always possible that unforeseen or unexpected events will occur
67
qualitative vs quantitaitve forecasting
QUALITATIVE: subjective because it’s based on the opinions of people, as determined via market research (eg).
QUANTITATIVE: more objective because it’s based on numerical data, such as statistics from the past five years.
68
What does a business forecast (ie, predict)?
(1) The quantity of demand for the business’ products.
(2) The timing of demand for the business’ products.
(3) The costs of materials.
(4) The costs of transportation.
69
forecasting: efficiency
- decreases the likelihood of odering and storing excessive amounts of materials which optimise the use of resources by reducing wastage
- having enough material minimises halts in the production process which improves productivity
70
forecasting: effectiveness
improves a business's ability to meet customer demand which can contribute to increased customer satisfaction, sales and market share
71
forecasting: advantages
- prevents excessive ordering
- reduce cost of storage
72
forecasting: disadvantages
- may be unable to meet demand = halt in production process
- trends may not reflect current demand
- time consuming to research
73
Master production schedule MPS
a plan that outlines what a business intends to produce, in its specific quantities within a specific period of time.
- aka focuses on outputs
- breaks down the production process and determines output targets that align with customer demands. It will specify details such as:
Location
Timing
Quantity.
74
Master production schedule MPS:
efficiency
- prevent business from producing an excessive amount of productis, optimising the use of resources by reducing waste
- promotes an organised operations system and minimises the number of avoidable errors = improves productivity by reducing interuptions to production
75
Master production schedule MPS:
effectiveness
- business more likely to produce the correct quantity of products to meet customer demand, which can improve customer satisfaction and increase sales + market share
76
Master production schedule MPS:
advantages
- Prevents the business from producing excessive amounts of stock.
- Provides employees with clarity.
- Can increase profits and reduce storage costs.
77
Master production schedule MPS:
disadvantages
- MPS might not be overly flexible to change.
- Can be time consuming and expensive.
78
Materials Requirement planning
process that itemises the types and quantities of materials to meet production targets set out by the Master Production Schedule (MPS).
- managers must consider how linge it will take to deliver the material
79
relationship between Master requirement planning & Master production schedule MPS
The Master Production Schedule outlines when to produce goods, whereas Materials Requirement Planning ensures the Operations Manager will have the requisite materials needs to meet the MPS.
80
Materials Requirement planning:
efficiency
- having exact materials required reduces avoidable halts in the production which enhances productivity by allowing operations to flow smoothly
- having exact materals reducing amount of excess stock that expires or becomes damaged in storage
81
Materials Requirement planning: effectiveness
- ensures sufficent materials to meet customer demand. increases customer satisfaction and sales
82
Materials Requirement planning:
advantages
- Reduces waste (exact materials required and no more) and thus improves reputation.
- Less likely to halt due to insufficient materials.
- Avoids storage expenses
83
Materials Requirement planning:
disadvantages
- Can be time consuming.
- May need to pay for study in skills or new employees
84
Just in time:
An inventory control approach that delivers the correct type and quantity of materials as soon as they are needed for production.
- ensures a business has minimal stock on hand.
85
Just in time: efficiency
minimal stock
- frees up areas in the workplace that can be utilised to increase production
- prevents resources from becoming damaged or expired, allows resources to be used optimally
86
Just in time: effectiveness
- costs saved from reducing storage space
- reduce costs associated with waste which can meet the objective of increased profits
87
Just in time: advantages
- Eliminates wastage due to expiry
- Can switch production with minimal waste.
- Reduces storage costs
88
Just in time: disadvantages
- A business might not be able to meet demand in time
- There may be less time to check the quality of stock
- Reliant on prompt supplier delivery
- No discounts from bulk buying supplies
89
inventory control
a system used to ensure that the costs associated with maintaining an inventory of materials are kept to a minimum.
- just in time is a system of inventory control
90
What is ‘quality’ in relation to goods and services?
A good or service’s ‘quality’ is its degree of excellence and fitness for its stated purpose.
o In other words, a high-quality product has a high degree of excellence and achieves the purpose for which it
was designed, and vice-versa.
91
What are the purposes of quality management strategies?
(1) To minimise waste and defects in production.
(2) To ensure that the business’ operations system strictly conforms to applicable standards.
(3) To reduce variance in an operations system’s final output.
92
The link between strategies related to quality and competition
Generally, consumers base purchasing decisions on quality and price (specifically, consumers tend to look for the
best possible quality at the lowest price).
Consequently, businesses with a reputation for quality products at low prices have a competitive advantage.
93
What is Quality control?
a business using inspections at various points in the production process to ensure that the business’ products meet predetermined standards, with unsatisfactory products being reworked or discarded.
- not inspecting every product but only a selection of samples
- is reactive because it detects defects in products that have already been produced.
94
What is a ‘product recall’?
when a business requests consumers of a defective product to return the product, so the
business can either: (a) fix the defect; or (b) give the consumer a refund.
95
Quality control: efficiency
- identifies and fixes the cause of an error and prevent it from reoccurring, which results in less waste being created in production:. which allows business to optimise its use of resources.
- reduces potential errors that may halt production, increases productivity as operation system flow continuously without interferance
96
Quality control: effectiveness
- removes defective products prevents customers from recieving faulty goods/services. allows business to meet the business objectives of increasing sales and market share
97
Quality control: advantages
- Prevents customers from receiving a faulty good or service and have a consistently high quality of products.
- Can reduce the number of refunds.
- Relatively inexpensive.
98
Quality control: disadvantages
- Will prospectively increase waste.
- Must inspect every product individually.
- Wastage can reduce profits
- Qualified individuals may need to be employed
99
Quality assurance
involves a busienss achieving a certified standard of quality in its production, after independant body assesses its operations system.
- a proactive process
- independent body can approve products and they can gain and advertise a certification of quality. (ex. international organization for standardization(ISO))
100
What is the benefit of a business’ products being certified?
- builds confidence in the quality of the business' production may increase, thereby increasing the likelihood of the products being purchased. increases their competitiveness
101
Quality assurance: effectiveness
- customers are more inclined to purchase from a business with certified quality standard. This can allow a business to increase its sales and meet the BO of increasing profit + market share
102
Quality assurance: efficiency
prevents errors before they occur reduces the number of faulty products produced
- reduces waste + optimise resources
- reduces the number of production halts,
103
Quality assurance: disadvantages
- Documenting operations system can be time consuming
- Employees may have to be trained
- can be expensive to pay for certification
104
Quality assurance: advantages
- Reduction in wastage from errors
- Certification can increase reputation and sales
105
Total quality Management
a holistic, proactive approach to quality and commitment to excellence where all employees are involved in the continuous pursuit of quality in everything they do.
106
Total quality Management: employee empowerment
where a business creating a corporate culture in which employees work in teams to develop solutions that will improve the quality of a business’ products.
- businesses can achieve this via quality circles: involves a group of employees meeting regularly to help solve problems relating to quality. they use a mix of data, problem analysis and problem solving techniques
107
Total quality Management: continuous improvement
involves a business’ operations system being constantly evaluated and improved.
- can be done via incorporating new technology and etc.
108
Total quality Management: efficiency
- continuously improving the quality of the production system can prevent errors from occurring and reduce the number of discarded products. allows business to optimise its use of resources
109
Total quality Management: customer focus
all employees should aim to satisfy a business’ internal and external customers by meeting or exceeding the customer’s expectations.
110
Total quality Management: effectiveness
111
Total quality Management: advantages
- reduces waste by being proactive rather than reactive
- higher customer satisfaction = improved reputation
112
Total quality Management: disadvantages
- requires a whole business cultural shift, which can be time consuming and expensive to implement
113
what is waste management
a process that involves reducing the amount of unwanted or unusable resources created by
a business’ production process in an attempt to improve the efficiency and effectiveness of the business’ operations system.
114
why is waste minimization important?
1) decreases a business' cost of production, and thus reduce the sale price for customers
2) can increase the productivity of a business' production process
3) help a business demonstrate that it's concerned about the natural environment = improve business's reputation
115
Waste minimization: efficiency
- by minimising the amount of time wasted in operations a business produces goods and services at a quicker rate
- by reducing the number of materials discarded, a business optimizes its use of resources
116
waste minimisation: effectiveness
reducing waste, lowers operational costs which allow for a business to offer lower prices to customers. this can increase the number of sales and meet objective of increasing market share. the increase in sales will also increase revenue, which can assist in the achievement of making a profit
117
Reduce
Aims to decrease the amount of resources, labour, or time discarded during production
- this lowers cost of production which can lead to an increase in profits and thus become effective
waste can be reduced by: using JIT, introducing automation/robotics and remove human involvement
118
Reuse
aims to make use of items which would have otherwise been discarded.
- taking old/unwanted items and finding new ways to use them
- saves money as some are being reused
119
Recycle
Aims to transform items which would have otherwise been discarded.
- changing discarded materials into new material in order to avoid using more virgin material.
-reduce cost and also benefit the community and environment.
120
what is lean Management?
an approach that improves the efficiency and effectiveness of a business’ operations system
by systematically reducing waste in all areas of production while improving customer value.
121
The seven areas of waste: TIM WOOD
Transportation: reduce unnecessary movement of machines and product between the processes in a business' operations system
Inventory: avoid excess inventory to minimize storage required
Motion: reduce unnecessary movement of workers and products within a business's operations system
Waiting time: eliminate idle time between the processes in a business' operations system
Overprocessing: B shouldn't add more value to a product than desired by the business' customers
Overproduction: shouldn't make more of a product than required + make product earlier than required
Defects: should reduce the incidents of errors or defects that require time to fix
122
4 principles of lean management: the 'pull' principle
The business produces products only when they’re required by customers (customer demand determine the amount of products produced).
TOYOTA: produces vehicles in response to customer order which prevents over production + reduces inventory
123
Benefits of the 'Pull' principle
1) business won't produce products that are unwanted by its customers = prevents overproduction, thus reduces waste
2) cost of inventry will be reduced, as B will need less inventory than when a business is producing large amounts at once
3) likelihood of business' stock being lsot, damaged or spoiled is reduced
124
effectiveness + efficiency of pull
efficiency: reduces overproduction and minimizes waste of materials, time and labour
effectiveness: gains products at the right quality which ensures customer needs and expectations of value are met
125
4 principles of lean management: One - piece - flow
where B produces its products by moving a single product through each stage of the business’ production process one at a time, with this stage adding value to the product.
TOYOTA: single vehicle goes through production at one at a time to reduce the wait time to reduce the wait time to receive a newly purchased vehicle
126
Benefits of the one piece flow principle
1) products will be delivered to individual customers more quickly because each stage in the production process will take less time time than
2) overall quality of the business' production process will be eliminated and defects are less likely to arise in the production process if each stage is focusing on one product at a time
127
effectiveness + efficiency of one piece flow
efficiency: reduces number of errors in production by only producing one unit at a time
effectiveness: only maintains processes which add value to customers, improving customer satisfaction
128
4 principles of lean management: Takt
Synchronsing production steps to meet customer demand.
- to achieve this principle, the output of one production stage is transferred to the next stage in a timely manner. this'll reduce wastage in time + labour
TOYOTA: vehicle production sequence is coordinated so that once the parts are prepared, the vehicle is efficiently transferred to the next stage/production
129
How does a business practice the 'takt' principle?
TAKT TIME is the average time that passes between the start of production of one product and the start of the next. (if takt time is 10 min, then it means that every 10min a finish product should be produced.)
- used to establish a continuous workflow with a smooth pattern that's flexible and easy to regulate as customer demand rises or falls
- if used correctly, there should be minimal delay between the stages in production
130
Benefits of the takt principle
1) the business' rate of production will be able to meet customer demand, while minimizing waste.
- not overproducing + underproducing
131
effectiveness + efficiency of Takt
efficiency: optimizes the flow of materials between stages and production, reducing time being wasted
effectiveness: improves the flow of processes and optimizes the production of goods, improving customer satisfaction
132
4 principles of lean management: zero defects
where a business strives for perfection by identifying and fixing errors and defects as close as possible to where they occur, rather than passing on these errors and defects to the next stage in production.
133
Benefits of the 'zero defects' principle
1) business products are less likely to have defects when they're delivered to customers = improving the quality of product
2)less likely to produce less waste than when errors/defects are only identified after entire production process is complete
134
effectiveness + efficiency of zero defects
efficiency: employees and the business aim to continuously reduce waste and encouraged to anticipate faults
effectiveness: aiming for continuous improvement may lead to customers receiving products with no defects and of quality, improving their satisfaction
135
Lean management: advantages
Time – G & S can be produced in a more timely manner.
Quality – Processes are streamlined and improved to increase quality.
Money – Reduces wastage of materials.
Reputation – Reduction in overall waste.
136
Lean management: disadvantages
Materials – Reliant on efficiency or suppliers to deliver goods.
Employee motivation – Quality reliant on employee motivation to reduce errors.
Time – Taken to train employees.
Money – Training employees.
137
what is CSR?
the concept that a business should conduct itself in an ethical manner that goes beyond its legal obligations in order to improve the economic, social and environmental outcomes of the business’ stakeholders.
138
Why should business's take into account CSR considerations?
1) customers who believe that a business is socially responsible are more likely to continue to deal with the business
2) customers who believe that a business is socially responible are more likely to refer the business to other customers, thereby expanding the business; customer base
3) if business has a reputation for being socially responsible, employees are more likely to want to work for them
139
what happens if a business fails to take into account CSR considerations?
- damage business' reputation
- fewer customers
- employees less likely to work for the business
140
CSR considerations for inputs
environmentally sustainable: A business’ inputs are environmentally sustainable if their use will have minimal (if any) negative impacts on the
natural environment, as well as community health and social conditions.
141
what strategies could a business implement to help result in its inputs being environmentally sustainable?
(1) source inputs from suppliers that use environmentally sustainable methods in relation to natural resources.
(2) use local suppliers, rather than overseas suppliers, to reduce the carbon emissions the
business generates via transporting its products.
(3) install and use renewable energy sources.
(4)purchase renewable energy from other businesses.
(5) purchase and use energy-efficient equipment and machinery.
142
CSR inputs: case study: Qantas
in 2018 first time they've operated a biofuel plane that ran from AUS to US. they partnered with domestic farmers to produce biofuel form mustard seeds. this change in inputs from petrol has allowed Qantas to lower carbon emissions on their flights by 80%.
143
CSR considerations for processes
reduce waste
144
what strategies could a business implement to help result in its processes reducing waste?
- use machinery that will perform processes in a precise and consistent manner, and thus
reduce the amount of waste generated via errors.
- use technology, such as CAD or CAM software, that will help reduce the amount of waste
generated by the business.
- use Just In Time and/or lean management in relation to the business’ production process to
help reduce unnecessary material waste.
- carry out processes that will remove harmful chemicals from waste products, and thus
reduce harm to the business’ employees and local community, as well as the natural environment.
- carry out processes that will recycle excess input materials.
145
CSR considerations for outputs
Outputs are meant to increase value for customers. It is socially responsible to ensure goods and services produced do not harm the wider community in an environmental, economic or social manner.
146
what strategies could a business implement to help result in its outputs causing less harm?
- Developing an alternative product which is environmentally friendly.
- Creating products which have recyclable elements at the end of their lifecycle.
- Eliminating as much plastic as possible in the packaging and creation of the final product.
- Delivering products in bulk to retailers to reduce the businesses carbon emissions from transportation.
- Offering customers incentives for returning the product at the end of its lifecycle so that it can be recycled properly.
147
CSR output: case study - Qantas
in 2019, they operated their first ever zero waste flight flying from Sydney to Adelaide. their passengers used electronic boarding passes and compostable cutlery for inflight means. unused food is then either donated or composted
148
what are the four global considerations?
(1)Global sourcing of inputs.
(2) Overseas manufacture.
(3) Global outsourcing.
(4) An overview of supply chain management.
149
What is ‘global sourcing of inputs’?
Acquiring raw materials and resources from overseas suppliers.
- Most businesses globally source supplies in order to obtain resources only available in other countries. I.e. Many businesses source iron ore from Australia.
150
Global Sourcing of Inputs: advantages
Materials – Can source materials otherwise unavailable.
Materials – Can source materials of a higher quality.
Money – Global materials may be cheaper.
151
Global Sourcing of Inputs: disadvantages
Import restrictions – Governments can have import quotas.
Communication
Delivery – Can be time consuming and result in damage.
Money – May have tariffs.
152
153
What is ‘overseas manufacture’?
Producing goods or services in a location outside of a business’s headquarters country.
- A business can produce a high quantity of goods at a low price, whilst still maintaining complete control of production.
154
Overseas manufacturing: advantages
Quality – Improve access to skilled employees.
Prices – Can reduce production costs, prices and increase sales.
Money – Reduce expenses and increase profit.
155
Overseas manufacturing: disadvantages
- CSR – May be produced in an unethical manner.
- Local employees may lose their jobs.
- Delivery may be time consuming.
156
What is ‘global outsourcing’?
Transferring specific business activities to an external business in an overseas country.
- Can access external businesses with a high degree of expertise. This may be cheaper than creating specific functions.
ex. A business can outsource its manufacturing to an overseas manufacturing business, rather than creating its own manufacturing facilities overseas.
157
Global Outsourcing: advantages
Quality – Can improve quality as external businesses may be experts.
Money – Can save costs.
Efficiency – Can produce goods more efficiently.
158
Global Outsourcing: disadvantages
- Reduced control over some activities.
- Local employees may lose their jobs.
- Can be difficult to communicate with international companies.
159
What is ‘supply chain management’? (crucial)
the coordination of the flow of supplies from point of origin, through a business’ operations system to the final products delivered to customers.
160
DO YOU REMEMBER EVERYTHING??
