Influences on operations

• Influences on operations


  • Globalisation
  • Technology
  • Quality expectations
  • Cost-based competition
  • Government policies
  • Legal regulation
  • Environmental sustainability
• Globalisation


  • Able to reduce the cost of operations by pursuing a global web strategy (location of different parts of the production process in different areas) which will reduce labour costs
  • More abundance of raw materials, technology skills and low transport costs
  • Can also act as a threat to a business as other businesses who apply cost leadership can deny the market
  • Able to reach new markets and provide franchises
  • Gives consumers the opportunity to purchase products from the business that provides them value for money
  • Access to a global market for businesses to sell their outputs
• Technology


  • Enables service-based businesses to penetrate global markets with the international distribution of information through the internet and smart phones
  • Can result in the development of new methods of production or new equipment that helps businesses perform functions more quickly and efficiently (lower cost)
  • Computer-aided design (CAM) and computer-aided manufacture (CAM) has impacted the number of employees needed within operations
  • It improves efficiency, logistics and reduces reliance on human labour
• Quality expectations


  • Customer expectations and satisfaction with the product(s)
  • Operations of the delivery of services can have a positive impact on customer satisfaction
  • Customers require world-class standards in products and after-sales support
  • Customers will have certain beliefs about durability, reliability, and fit for purpose
• Cost-based competition


  • A business can gain a price advantage over its competitors by using operational strategies that lower costs through cheaper labour and resources, outsourcing economies of scale, global web strategy, lowering quality, using cheaper inputs
• Government policies


  • Methods used by the government that encourage the operations function of a business to be more innovative and competitive
  • Providing monetary benefits such as a financial grant or tax concessions
  • Gradual reduction in 'protection of Australian businesses forcing them to be more efficient in their operations and reduce costs
  • Free trades, taxation, interest rates, government spending and environmental incentives
• Legal regulations


  • The aim of government regulation of a business is to promote safety and fair business conduct
  • Many of the regulatory requirements exist at a local, state and federal level
  • It is the legal responsibility of the operations manager to be aware of all the laws relevant to the operations function and ensure that the business complies with them
  • Work Health and Safety (WHS), anti-discrimination, equal employment opportunity (EEO), local zoning, and GST collection
• Environmental sustainability


  • Refers to the development and use of methods of production that allow resources to be used by producers today without limiting the ability of future generations to say their needs and wants
  • Consumers need to be aware of the cost and disposal of excessive packaging
  • Society will have a positive attitude towards businesses that are environmentally friendly and good corporate citizens
  • Involves the use of alternative resources, organic growing, recycling and packaging and catering for future generations
• Corporate social responsibility


  A commitment by a business to operate ethically to protecting and contributing to the resources and interests of customers<|>It is how success and profitability is determined and how well it considers the interests of employees, consumers and the community
• Legal compliance


  Mandatory and of greater importance than ethical responsibility as there are not specific laws the business would be breaking, yet unethical behaviours may lose customers
• Ethical behaviour


  Involves making decisions that are not only legally correct but also morally correct
• Code of conduct for operations

  • Minimising harm to the environment
  • Reducing waste, recycling and reusing
  • Producing value-for-money, quality products
  • Improving customer service
• Environmental sustainability


  About the present use not affecting the future use, looking after the environment for future generations
• Social responsibility


  Refers to the positive effect on the community protecting interests of customers and wider society, eg initiatives/charity to community
• By pursuing environmentally sustainable goals a business will be contributing to a better quality of life for society