OPS

• strategic role of ops management: cost leadership

  having the lowest costs or to be the most price-competitive in the market (however, the business still strives to make a profit)
• strategic role of ops management: g/s differentiation


  distinguishing goods or services in some way from their competitors. [E.g. vary the quality of a product or vary the qualifications and experience of the service provided]
• strategic role of ops management: economies of scale

  cost savings that occur as a result of an increase in the scale of a business's operations. Meaning, as output increases, costs of production decrease [e.g. through bulk buying inputs.]
• g/s in different industries: Standardised goods


  are mass-produced, meeting quality and design consistency.
• g/s in different industries: customised goods

  are tailored to customer needs and have a market-oriented production focus.
• g/s in different industries: intermediate goods


  goods that have gone through one set of operational processes then become inputs into further processing. [E.g. a nail]
• g/s in different industries: perishable goods


  items that have a limited shelf life and deteriorate or become unusable over time [Usually food items dominated by the grocery sector.]
• g/s in different industries: non-perishable goods

  Items that have a long shelf life and do not deteriorate or spoil quickly. They can be stored for extended periods without significant changes in quality or safety. [Dominated by the business goods and household sector.]
• influences: globalisation definition


  Definition: Globalisation is the increasing integration between national economies and the transfer of capital, labour, intellectual capital, ideas, financial resources, and technology.
• influences: globalisation results


  - It results in the increased movement of people, goods, information, technology, finance and culture throughout the world due to increased economic integration

  - Can present business opportunities (for example, lower costs and new markets), but also proposes threats such as overseas competition

  - Through globalisation, businesses can leverage the competitive advantage each region of the world has to offer
• influences: technology definition


  Definition: the design, construction and/or application of innovative devices, methods and machinery.
• influences: technology results


  - Technology allows businesses to be more competitive (cheaper, less dependent on labour and more efficient).

  - While potentially expensive, maintaining the latest technology can be essential to maintain competitive advantage.

  - Examples: logistics, distribution, quality management, inventory and supply chain management and sourcing.
• influences: quality expectations definition

  Definition: how well designed, made and functional goods are, and the overall competence with which services are organised and delivered.
• influences: quality expectations results

  Quality expectations lead to consumers' perceptions about the standard of products, and accordingly, consumers will be prepared to pay a higher price for higher quality.
• influences: quality exp in goods and service

  Quality expectations with goods: quality of design, fitness for purpose, durability.

  Quality expectations with services: level of customisation, reliability of service provider, professionalism of service provider. Can be a major driver of customer loyalty.
• influences: cost-based competition def and results

  Definition: Typically used it is difficult to differentiate the product in another way.

  - Need to reduce operational costs in order to gain a price advantage.

  - This can be done by outsourcing, using cheaper inputs, updating technology, reducing quality, relocating operations to a cheaper location.
• influences: government policies def and results

  Definition: Government-mandated policies which impact on business operations

  - Government policies change not very often due to a change in government or social expectations, and are, therefore, a notable source of change and a significant influence on business operations.
• influences: examples of government policies

  Lots of different policies affect operations, some include:

  Taxation rates

  Required materials handling practices

  Work health and safety (WHS) standards

  Industry training requirements

  Policies relating to public health

  Environment

  Trade and industry

  Employment relations.
• influences: legal regulations definition


  Definition: Legal regulations are laws which businesses must follow at the risk of penalty. The expenses associated with meeting the requirements of legal regulations are termed compliance costs.
• influences: (under legal regulations) compliance costs meaning

  Compliance costs: expenses associated with meeting requirements of legal regulations. The NSW State Government has responsibility for developing laws and policies affecting business operations that relate to:

  Small businesses and consumer law

  Payroll tax

  WHS

  Workers' compensation
• influences: (under legal regulations) commonwealth laws/legislations

  Commonwealth Legislation:

  Work Health and Safety Act 2011

  Fair work and anti-discrimination laws - Racial Discrimination Act 1975 (Cth), Sex Discrimination Act 1984 (Cth), Anti-discrimination Act 1977 (NSW), Fair Work Act 2009 (Cth)

  Taxation Act 1953 (Cth)

  Corporations Act 2001 (Cth)
• influences: environmental sustainability


  Definition: Business operations should be shaped around practices that consume resources today without compromising access to those resources for future generations.

  Sustainable use of renewable resources e.g. solar, wind power

  Reduce use of non-renewable resources

  Reduce level of environmental impact and reduce waste
• influences: CSR definition


  CSR refers to open and accountable business actions based on respect for people, community and the broader environment. It involves businesses doing more than just complying with the laws and regulations.
• influences: CSR- the difference between legal compliance and social responsibility

  Business behaviours and practices that are conducted in accordance with federal, state and local laws of the country or countries in which the business operates.

  Businesses going beyond the law and taking into account broader social, community and environmental concerns.
• influences: CSR- environmental sustainability and social responsibility

  By pursuing environmentally sustainable goals, businesses contribute to a better quality of life for consumers.

  Businesses going beyond the law and taking into account broader social, community and environmental concerns.
• ops processes: operations process meaning

  Definition: 'Operations processes' are those processes involved directly with transformation.

  The processes may be broadly classified according to their role in transformation:

  inputs into the transformation process

  the actual processes of the transformation

  outputs of the transformation process.
• ops processes: inputs, transformed resources meaning

  Transformed resources are those inputs that are converted in the operations process.
• ops processes: inputs, transformed resources- materials

  Materials are the basic elements used in the production process, consisting of two types:

  
  

  1. Raw materials: the essential substances in their unprocessed state. For example, coal, wood, fish and recycled materials.

  2. Intermediate goods: are goods manufactured and used in further manufacturing or processing.
• ops processes: inputs, transformed resources- information

  Information is the knowledge gained from research, investigation and instruction, which results in an increase in understanding. Information can be:

  Internal: Comes from within the business. [e.g. Financial Reports, customer feedback]

  External: Comes from outside the business. [e.g. Market reports]

  The value of information lies mainly in its ability to influence behaviour or decision making, such as which suppliers and supplies are available
• ops processes: inputs, transformed resources- customers

  When customers consume goods they are transformed from an unsatisfied customer to a satisfied customer. For example, hairdressers transform the way a customer looks.
• ops processes: inputs, transforming resources meaning

  Transforming resources are those inputs that carry out the transformation process. Transforming resources enable value adding to occur.
• ops processes: inputs, transforming resources- human resources

  Human resources refers to the physical labour done by business employees.

  1. Employees are the most crucial of all inputs.

  2. Capable workers can bring higher productivity and efficiency to business operations.
• ops processes: inputs, transforming resources- facilities


  Facilities refer to the plant (factory or office) and machinery used in the operations processes.

  - Plant and machinery selection by management can make a very significant difference to a business and its capacity to transform.

  - Modern facilities that integrate modern technology, have adequate lighting, are well designed and promote a positive workplace culture for staff, will be highly conducive to productive operations.
• ops process: transformation process meaning


  Definition/basic info: The transformation process is the conversion of inputs (resources) into outputs (goods and services).

  THIS STEP ALLOWS VALUE-ADDING TO TAKE PLACE

  The transformation process for a manufacturer tends to be highly automated. Manufacturers use machinery, technology and computers to transform inputs into outputs.

  Service providers rely heavily on an interaction with the customer and their processes tend to be more labour-intensive; that is, staff are still integral to the process.
• ops process: the 4 v's in the transformation process definitions

  volume: Refers to how much of a product is made

  variety:Refers to the mix of products made, the product range, variety of choice for consumers

  variation in demand: Refers to changes in demand for product

  visibility (customer contact):The degree to which the transformation process directly involves the customer.
• what are the 3 components of volume

  VOLUME FLEXIBILITY-

  How quickly transformation processes can adjust to changes in demand.

  HIGH VOLUME PRODUCTS-

  Large capital and repetition in the production process. Results in low average cost of production (Cost Leadership). E.g. fast food

  LOW VOLUME PRODUCTS-

  Less equipment and capital involved, more multi-skilled employees. Results in product differentiation.

  E.g. a 5-star restaurant
• volume influence


  Volume refers to the actual number of products produced by operations.

  The ability of a business to respond to changes in volume is critical to managing lead time*, ensuring the order can be fulfilled from the moment it is made.

  *Lead time: the amount of time that passes from the start of a process until its conclusion.

  The three individual components of volume are low-volume products, high-volume products and volume flexibility
• variety influence


  Variety refers to the mix of goods or services delivered throughout the transformation process.

  The greater variety of goods and services, the more the operations process needs to cater for this variation.

  Mix Flexibility - Mix of products or services delivered through the transformation process.
• variation in demand influence

  Variation in Demand refers to the change in demand for goods and services over time.

  Due to the fluctuations in the nature of volumes, an increase or decrease in demand will require altering the amounts of inputs such as labour, energy and resources needed to meet demand.

  Businesses try to forecast demand, specifically annual and seasonal factors, so adjustments can be anticipated, and they can act accordingly.
• visibility influence


  Visibility refers to how much of the transformation process directly involves the customer.

  Service Industries= High visibility,

  Manufacturing Industries= Low visibility

  High visibility businesses will generally produce a mixture of products, e.g. supermarkets, whose operations work remotely from their customers.

  Low visibility businesses will generally produce the same or similar products, e.g. a coffee shop or an estate agent, whose operations take place in front of the consumer.