operations

    Cards (63)

    • Strategic Role of Operations
      Maximising profits by maximising efficiency and minimising costs
    • Cost Leadership
       involves aiming to have the lowest costs or to be the most price-competitive in the market
      consider
      • input costs
      • labour costs
      • processing costs
      • inventory costs
      • quality management costs
    • Good/service differentiation
      • Tangibility
      • Customisation
      • Time between production + consumption
      • Determination of value
    • Product Differentiation
      distinguishing products (g/s) in some way from its competitors
      • Goods
      • Varying product features
      • Varying product quality
      • Varying augmented features
      • Services
      • Time spent on service
      • Qualifications / Experience
      • Quality of materials/ technology
    • goods and/or services in different industries
      Operations decisions will vary for goods depending on whether they are:
      Standardised goods: mass produced, uniform in quality, predetermined level of quality, OR
      Customised goods: vary according to the needs of consumers
      • perishable goods - Very short lead times and distribution that is quick and effective
      • non-perishable goods - Very durable, last a long time
      • intermediate goods = Processed more than once to produce other goods
    • goods and/or services in different industries

      Services can be standardised or customised
      → e.g. visiting a GP (standardised) vs seeing a specialist (customised)
      Self service: encouraging the customers to take initiative to help themselves
      → e.g. ikea furniture, self serve checkouts
      • Positives → saves costs on labour, therefore business can reduce cost of product
      • Negatives → longer process, technology issues, customers may not be comfortable
    • Interdependence
      • marketing - Marketing designs and markets the products to meet customers’ needs while operations acquires the source and inputs of the product
      • finance - Finance manages the costs and expenses of the business and summarises transactions that the operations team makes to produce a product
      • HR - HR deals with the people that the business employs and the issues arising from their unemployment. Operations needs its HR to produce their products
    • Influences - Globalisation
      refers to the removal of barriers of trade between nations
      • Can be seen as an opportunity (e.g. expanding customer base) or threat (e.g. increased competition)
      Supply chain: refers to the range of suppliers a business has and the nature of its relationship with those suppliers
      • Global web - global network of suppliers of the lowest cost, lowest risk and maximum certainty
      • Reverse engineering - taking the product of a competitor that has already been released into the market at lower cost
      • innovations - Occurs when the business creates novel (new) products
    • Influences - Technology
      Technology: the design, construction and/or application of innovative devices, methods and machinery upon operations processes
      → e.g. planning technologies, office technologies, manufacturing technologies 
      • Can be applied to, and integrated with, the range of processes that characteristics the operations function in business 
      • Can be a threat → advances in technology that business does not capitalise on
      • Can be opportunity → innovate to enhance their operations process
    • Influences - Quality Expectations
      the totality of features and characteristics of goods and services that satisfy the stated or implied needs of consumers 
      • Quality informs all operations processes. The expectations that people have of businesses determine the way that products are designed, created and delivered to customers.
      • Goods
      • Quality of design
      • Fitness for purpose
      • Durability
      • Services
      • Professionalism
      • Reliability of service provider
      • Level of customisation
    • Influences - Cost Based Competition
      derived from determining the break even point and then applying strategies to create cost advantages over competitors 
      • Recognises that prices cannot keep increasing, therefore reducing costs is the way to maximise profits
      • businesses that reduce costs
      • bulk buy inputs
      • achieve economies of scale
      • eliminate waste
      • produce standardised products for larger markets
      • produce high volume output
      • use automated production systems
    • Influences - Government Policies
      Policies affecting business operations: 
      • monetary and fiscal policy; taxation rates; materials handling practices and waste disposal; Work Health and Safety (WH&S) standards; environmental policies such as carbon pricing, employment relations;and research and development grants
      Operations managers need to be fully aware of the contemporary government policies and what they comprise in every country they operate in.
    • Influences - Legal Regulation

      includes a range of laws with which a business must comply with 
      • Influences how practices and process in operations are conducted particularly around labour, technology, finance, machinery and energy
      • Includes
      • Labour laws
      • Environmental/health
      • Licensing laws
      • Taxation
      • Trade practices
      • Migration and rules
      • Intellectual property
      • Financial and corporations law
      • Human rights
    • Influences - Environmental Sustainability
      means that the business should be shaped around practices that consume resources today without compromising access to those resources for future generations
      • Can be seen in the move by businesses to reduce and minimise waste, recycle water, glass, paper and metals and reduce their carbon footprint
      Two main aspects:
      • The sustainable use of renewable resources
      • A reduction in the use of non-renewable resources
    • Influences - Corporate Social Responsibility
      extends a business’s objectives from profit to ‘service to society and the community’
      • Businesses with a positive CSR image have high reputations with shareholders
      • CSR does reduce profit and may be unpopular with shareholders
      • Operations and production management are influenced by CSR because they create the business’s environmental footprint through production, transformation and outputs
    • Influences - CSR
      Legal Compliance
      • Prescribed standards of behaviour that follows the letter of the law 
      • Compliance costs
      Ethical Responsibility
      • Taking it further by following the intention and the ‘spirit’ of the law
      • More expensive
      • Demonstrating that it values something more than just earning maximum profit
    • Influences - CSR
      Environmental Sustainability
      • Operate and utilise resources in a way to sustain for the future 
      • Requires businesses to evaluate the full environmental effects of their operations
      Social Responsibility
      • Enhancing outcomes for all people involved in the business - customers, employees, shareholders, suppliers
      • Recognising business activities have an impact on society
    • Transformed Resources
      inputs that are changed or converted in the operations process
      1. Materials - basic elements used in the production process, includes raw materials and intermediate goods
      2. Information - the knowledge gained from research, investigation and instruction. can be external (statistics) or internal (reports)
      3. Customers - become transformed resources when their choices, preferences and interests shapes inputs
    • Transforming Resources
      inputs that carry out the transformation process; enable the change and value adding
      1. Human Resources - employees coordinate and combine inputs to produce a good/service
      2. Facilities - the plant (factory or office) and machinery used in the operations process
    • the influence of volume, variety, variation in demand and visibility
      Variety
      • The mix of products made or services delivered.
      Variation in demand
      • Refers to the changes in demand for a g/s for businesses.
      • High variation → demand goes up and down (seasonal)
      • Low variation → more constant and little change (consistent)
      Visibility (customer contact)
      • How much say customers have in the production of their products.
      • high visibility - restaurant
      • low visibility - online uni course
      Volume
      • how much of a product is made
    • Sequencing and Scheduling
      Sequencing: refers to the order in which activities in the operations process occur
      Scheduling: refers to the length of time activities take within the operations process
    • Gantt Charts
      • Outlines the activities, the order and the time of each activity
      • Used for any process that has several steps and involves different activities
      Advantages
      • Force managers to plan and specify the time required
      • make it easier to monitor actual progress against planned activities
    • Critical Path Analysis
      a sequencing method or technique that shows what tasks need to be done, how long they take and what order is necessary to complete those tasks
      • The critical path is the LONGEST PATH taken to complete the whole project
    • Processes - Technology

      • Enable business to undertake the transformation process effectively and efficiently 
      • Used in the manufacturing sector to speed up the operations process and in the service sector to increase trade and communication
      • Office technology
      • computer, keyboard, telephones, printers, scanners
      • more efficient work
      • greater range of tasks
      • employees can work from home
      • Manufacturing technology
      • Robotics - consistency
      • Computer authorised design (CAD)
      • Computer authorised manufacturing (CAM)
    • Task Design
      Task design: involves classifying job activities in ways that make it easy for an employee to successfully perform and complete the task 
      • overlaps the employment relations functions of job analysis, job description and person specification
      • Task Design → Job DescriptionPerson specificationRecruitmentSelection
    • Process Layout
      Plant layout: the arrangement of equipment, machinery and staff within a facility
      • Impacts the efficiency of operations
      • Must consider physical space, technology, location of stock, legislation and other stages of production
    • Process Layout
      The arrangement of machines which are grouped together by the function (or process they perform)
      • High-variety, low volume production, moves from one department to another 
      → e.g. hospital → all machinery and services related to pregnancy are in the Maternity Ward
    • Product Layout
      Where the equipment arrangement relates to the sequence of tasks being performed in manufacturing a product
      • Deals with work stations which are arranged to match a series of operations, work flows from station to station
      → e.g. the assembly of motor vehicles
    • Other Layouts
      • Fixed position layout - Where a product remains in one location due to its weight or bulk → e.g. ice cream machines at Messina (related to product layout)
      • Office layout - Organised around discrete workstations and provide spaces to take breaks from the work environment
    • monitoring, control and improvement
      1. Monitoring - The process of measuring actual performance against planned performance
      2. Controlling - Occurs when KPIs are assessed against predetermined targets and corrective action is taken if required, includes prevention, feed forward and feedback
      3. Improvement - Refers to the systematic reduction of inefficiencies and wastage, poor work processes and the elimination of any aspect of the transformation process that slows down the overall processing speed
    • Outputs - Customer Service
      Customers may express dissatisfaction if a product is: defective, not meeting quality standards, wait times/lead times are too long or makes a warranty claim → operations processes would need a review
      • Includes
      • Handling customer returns promptly
      • Answering questions and providing information
      • Frequent and meaningful communication
      • Anticipating customer needs
      • Following up customer enquiries and complaints
      • Customer service is
      • an aspect of relationship marketing
      • can enable a business to charge higher prices and lessen the need to reduce costs
    • Outputs - Warranties
      Warranty: an assurance that a business stands by the quality claims of the products they make and provide to the market
      • Australian law must ensure consumer guarantees → e.g. acceptable quality, safe, lasting, look acceptable, function properly 
      • Retailers and manufacturers must comply with the warranty and may need to provide a replacement product if a consumer is not satisfied
      • Consumers are more likely to buy from a business if there is a quality guarantee and the security that they can get their money back if the goods are not up to standard
    • Performance Objectives
      goals that relate to particular aspects of the transformation processes which are set to make businesses more efficient, productive and profitable.
      includes:
      • Quality
      • Speed
      • Dependability
      • Flexibility
      • Customisation
      • Cost
    • Quality
      Determined by consumer expectations, which are used to inform the production standards applied by the business. 
      1. Quality of design 
      2. Quality of conformance
      3. Quality of service
    • Speed
      Refers to the time it takes for the production and operations process to respond to changes in market demand 
      • Goals for speed: reduced wait times, shorter lead times, faster processing times
      To achieve: reduction in procedural and technical bottlenecks and smooth internal communication, ability to change supply chain to quickly respond
    • Dependability
      Refers to how consistent and reliable a business’s products are, how long the products are useful before they fail
      Measured by: warranty claims, consistency of standards, number of complaints received, how durable a product is
    • Flexibility
      Refers to how quickly the operations process can adjust to changes in the market
      • The faster the processing time, the greater the likelihood that processes can be adjusted quickly to take on greater capacity of production
      • Achieved by updating products, increasing capacity, tech
    • Customisation
      Refers to the creation of individualised products to meet specific needs of the customers
      • Much cheaper to standardise, however more likely to be successful if you add an element of customisation
      Mass customisation: standard mass produced item is personally modified to meet customer requirements
      → e.g. standard car customised through paint colour
    • Cost
      Refers to the minimisation of expenses such that operations processes are conducted as cheaply as possible
    • New Product or Service Design and Development
      Goods
      • Two approaches:
      • Preferences and desires of customers via market research
      • Arises from changes in technology that enable new products
      • Factors to consider: quality, SCM, value, capacity management, utility, cost
      Services
      • customised so the customer is the starting point in design or standardised
      • Must consider:
      • Explicit service: tangible aspect such as time, expertise, skill
      • Implicit service: physiological aspect e.g feeling of being looked after
      Services using goods
      • Sometimes in the delivery of services, goods may be required
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