4. Operations

• Cost objectives - Walmart


  Cost reduction through supply chain efficiencies, bulk buying, warehouse automation
• Quality objectives - Toyota


  Emphasises continuous improvement (Kaizen) and reducing defects. Rigorous Quality control checks at every stage of production + employees trained to spot potential issues
• Flexibility objective - Zara 


  Rapidly design, produce and distribute styles within weeks - key adv - short lead times - allows to quickly respond to new trends
• Environmental objective - IKEA


  By 2030 all of its products to be made using renewable and recycled materials
• Added Value objective - Apple 


  Services like Apple care, iCloud storage and product integration across devices increase perceived value of apple's products - fosters loyalty
• Labour Productivity - Tesla 


  • Robotic assembly lines
  • Training programmes so workforce highly skilled
  • Advanced software to monitor production schedules
• Economies of scale 


  • Supermarkets - Large buying power - negotiate lower prices with suppliers - reduces unit cost
  • Automotive - bulk purchase materials, efficient assembly lines, optimised logistics
• Diseconomies of scale 


  Large retailers who expand too rapidly or into areas they lack expertise. Managing inventory, ensuring quality harder across a vast network of stores. High bureaucracy raises costs
• High Capacity utilisation - Ryanair 


  • Budget airline
  • Maximises no. of passengers per flight - near full capacity on most flights
  • Helps spread fixed costs - lowers cost per seat - lower ticket price + maintain profitable
• Low capacity utilisation - car manufacturing 


  • Jaguar + Land Rover faced low C.U during COVID - supply chain disruptions - produced less
  • Fixed costs not spread - unit cost rose
• Efficiency: Amazon's Warehousing 


  • Advanced automation, robotics + AI to sort and ship orders
  • Reduces time to process and deliver + reduces costs
• Productivity - Toyota 


  • Kaizen + lean production + JIT
  • Sig. Increased no. Of vehicles produced per unit of time
  • Lowers costs + inc output
• Capital Intensive Industry 


  • Car manufacturing
  • Oil extraction
  • Mining
• Labour Intensive industry 


  • Textile manufacturing
  • Agriculture
  • Hospitality
• Technological efficiency 


  • Retail - self-service checkout
  • Manufacturing - robotics in production line
  • Amazon uses AI driven algorithms to predict inventory needs and streamline logistics
• Good Quality

  • iPhones - seamless user exp
  • Toyota - reliable, longevity
  • Dyson vacuums - powerful suction, innovative tech to ensure consistency
• Bad Quality

  • Samsung Galaxy Note 7 - battery defects caused phones to overheat and catch fire - recalled - damage rep
• Mass customisation - Rolls Royce 


  Bespoke programme allows customers to personalize nearly every aspect of the car eg: colour, interior materials, embroidery
• Outsourcing 


  • Many fashion + sports retailers outsource production to Asia - Vietnam, China, Indonesia
  • Reduces costs - lower labour costs
  • Outsource customer support to third party all centers in India, Mexico
  • Apple outsources manufacturing of iPhones to Foxconn - Taiwanese electronics manufacturer
• Produced to order 


  = Only made after order placed - used for highly customised items eg:

  • Tailored suit
  • Luxury cars
  • Aircrafts
• Inventory management 


  • Toyota - JIT
  • Amazon - automated robots track and manage stock
  • Zara - fast fashion model with quick inventory turnover - limited quantities of clothing and restocks based on real time demand
• Suppliers 


  • Tesco sources products from Unilever and British Farms
  • Mix of local and global suppliers ensure wide range of products at competitive prices while supporting UK-based agriculture