operations

• Common direct inputs


  • Labour
  • Energy
  • Raw materials
  • Machinery and technology
• Raw materials


  Substances in their unprocessed state
• Intermediate goods


  Goods manufactured and used in further manufacturing
• Compliance and ethical responsibility

  Businesses are legally compliant and show commitment to the 'spirit of the law'
• Environmental sustainability


  • Protecting the environment by:
  • Ethically sourcing materials
  • Outsourcing responsibility
  • Adapting sustainable policies
  • Reducing their carbon footprint
• Social responsibility


  • Providing for the greater good of society through practices like:
  • Ethical production
  • Maintaining quality standards
• Common direct inputs


  • Labour
  • Energy
  • Raw materials
  • Machinery and technology
• Materials (McDonald's)


  • Locally-sourced materials
  • 100% Australian sourced and processed beef
• Information (McDonald's)


  • Data on customer satisfaction
  • Introduction of grilled chicken and salads
• Transformed resources: information


  Knowledge gained from research, investigation and instruction, which results in an increased understanding
• Transformed resources: customers


  • Customers' choices shape inputs
  • Customers' desires and preferences act as a resource
• Transforming resources: human resources

  • Qualified
  • Hard working
  • Disciplined
  • Brings productivity and efficiency to operations
• Facilities (McDonald's)


  • Invests over US$1 billion in capital to upgrade its facilities
  • Aim to strengthen relationships with customers through technology
• Volume


  • How much of a product is made
  • Essential to manage lead times
• Variety


  • The range of products made
  • Mix flexibility = product range/variety of choice
• Variation in demand


  • The amount of a product desired by consumers
  • Impacts transformation resources

  
• Visibility


  • The nature and amount of consumer contact
  • Customers can shape what businesses make
• Sequencing


  The order in which activities in the operations process occur
• Scheduling


  The length of time activities take within the operations process
• Gantt charts


  • A type of bar chart that shows both the scheduled and complete work over a period of time
  • Provides a visual representation of the task and allows the business to monitor actual progress against goals
• Volume (McDonald's)


  • Developing systems that track the volume of menu items sold
  • Managing volume is imperative for McDonald's to maintain short lead times
• Variety (McDonald's)


  • 10 breakfast items (9 in 2020)
  • 63 drinks (40 in 2020)
  • Over 50 McCafe items
• Variation in demand (McDonald's)

  • Faced a sharp downturn during the pandemic
  • Sales bounced back strongly
• Visibility (McDonald's)


  • Customers are able to provide feedback through an online form
• Critical path analysis


  • A technique that identifies the activities necessary to complete a task, including identifying the time necessary to complete each activity and the relationships between the activities
  • The critical path is the longest length of time it takes to complete ALL TASKS necessary
  • Shows that tasks can be performed simultaneously
• Technology


  • The application of science or knowledge that enables people to do new things or perform established tasks in new and better ways
  • Use of tech in transformation has led to improved efficiency, lower costs over long term, high quality, competitive advantage
• Task design


  • Breaking down the work into a series of jobs which each contribute to the final goal
  • Involves classifying job activities in ways that make it easy for an employee to successfully perform and complete the task
• Process layout


  • Layout will depend on the type of manufacturing operations or services performed by the business
  • Alternate layout options: process layout, product layout, fixed position layout
• Monitoring


  The process of measuring actual results against planned performance
• Control


  Comparing business results against planned performance results and taking corrective action to achieve these goals

  
• Improvement


  • Making changes - implementing strategies to contribute to the goals
  • For example, implementing a systemic reduction, wastage, elimination of low-quality work
• Outputs


  • Once you buy an output, it is implied that you, as the consumer, will assess or criticise the product
  • Under Australian law, all goods must: have a level of quality, be suitable for the job, match the promotion and be free from defects
• Customer service


  • Providing superior customer service = larger market share
  • Keep customers and gain new ones
• Warranties


  • Leads to improvements in the transformation process
  • Allows businesses to trace the source of faults
• Customer service (McDonald's)


  • McDonald's believes that customer engagement and good service are fundamental to the role of a crew member
  • McDonald's expects its members to be friendly and to put the customer first
  • McDonald's values its customers and seeks customer feedback via in-store questionnaires or its website
• Quality


  • Related to the design and conformance of products
  • Includes quality of design, quality of conformance and quality of service (QUALITY MANAGEMENT)
  • Purpose: to offer customers value for money
  • How to achieve it: adopt quality management processes throughout the transformation process
• Speed


  • How quickly/how well production can adopt to rising or falling demand
  • Purpose: to fulfil customer demands as quickly as possible
  • How to achieve it: change input levels and processing times
• Dependability


  • How consistent, reliable and long-lasting products are
  • Purpose: to reduce warranty + customer complaints
  • How to achieve it: use quality management processes
• Flexibility


  • How well the business can adapt capacity or volume to all changes in the market
  • Purpose: to improve processing times
  • How to achieve it: increase the volume and variety of outputs by increasing capacity
• Customisation


  • Creating tailored products to meet specific customer needs or wants
  • Purpose: to increase customer satisfaction whilst charging higher prices
  • How to achieve it: use a differentiation strategy e.g. mass customisation