Business Studies - Operations

Cost-based leadership (Strategic role of Operations)

Reducing transformation costs to produce a lesser costing product

Goods/service differentiation (Strategic role of Operations)

Creating a product that is different to competitors

Strategic role of operations

To implement the business strategy

Interdependence with Finance

Required to pay employees and suppliers, ensures that raw materials and component parts are available when needed

Interdependence with Marketing

The function that works out what the customer wants

Interdependence with Human Resources

For operations to be carried out, these must be properly organised

Global factors (Operations strategies)

Research and development, scanning and learning, economies of scale

Research and development (Global factors)

The development of new ideas

Global sourcing (Global factors)

Using resources from outside the home country within the business

Scanning and learning (Global factors)

Being aware of environmental changes and adapting the business's activities to regain competitive advantage

Economies of scale (Global factors)

Cost saving by spreading fixed costs over increased outputs eg. buying in bulk

Inventory management (Operations strategies)

Holding stock just-in-case, Last in first out - selling most recent purchase of stock first, First in first out - selling the first stock purchased first, Just in time - holding as minimal stock as possible

Outsourcing (Operations strategies)

Using external providers to do some of the activities normally conducted within the business

Performance objectives (operations strategies)

Quality (what the customer expects), speed (the time between ordering and delivery), dependability (reliability of a good or service), flexibility (how a product can be changed to suit the customer), customisation (the ability to modify a good/service to individual needs) and cost

Product/service design and development (Operations strategies)

Creating well designed products and constantly improving these products

Quality management (Operations strategies)

Quality control (sampling products for faults during the transformation process), quality assurance (putting plans in place to ensure faults don't occur) and quality improvement (the team members have the responsibility of quality)

Supply chain management (Operations strategies)

The activities that acquire materials and services, transforming them into products and services to deliver to the customers; logistics (moving inputs, resources and outputs through the transformation process as quickly as possible), e-commerce (use of the internet for all commercial transactions) and global sourcing (acquiring products outside the home country)

Technology (Operations strategies)

Leading edge - newest technology available on the market eg. self serve, Established - old technology that is reliable eg. computer

Transformed resources (Operations processes)

Materials, information and customers

Transforming resources (Operations processes)

Human resources and facilities

Transformation processes (Operations processes)

Volume - the number of products or services produced by the business, Variety - the different models/variations, Variation in demand - fluctuations in customer demands, Visibility - how much contact the business has with its customers

Batch production (Operations processes)

Producing a product in a small number

Flow production (Operations processes)

Producing a product in a large number

Corporate social responsibility (Operations influences)

Legal compliance - abiding by the law, Ethical responsibility - "doing the right thing" by the community, Environmental sustainability - maintain the qualities valued in the physical environment

Globilisation (Operations influences)

The process that is leading to a single world market

Technology (Operations influences)

If a business cannot keep up with trends, they will lose their competitive edge

Quality expectations (Operations influences)

Products are expected to have a certain amount of quality

Cost-based competition (Operations influences)

Aiming to reduce warehouse and transportation costs to have an overall cheaper product

Government policies (Operations influences)

Regulations, subsidies, grants, taxes and tariffs

Legal regulations (Operations influences)

Laws that regulate how any activity is conducted

Environmental sustainability (Operations influences)

Operations impact on the environment, so businesses that can be as environmentally friendly as possible, they will attract more customers

Warranty (Operations processes)

A guarantee that the product will last a specific amount of time