HSC Business Studies- Operations

Operations

The function that involves transformation or, more generally 'production'

Strategic

Holistic, long-term planning performed by senior managers

Cost leadership

Strategy where a business aims to be the lowest cost manufacturer within its industry

Profit margin

The difference between the price of a product and the cost to make the good or supply the service

Economies of scale

Cost advantages that can be created because of an increase in scale of business operations by being able to purchase inputs in bulk

Standardised goods

Mass produced, usually on an assembly line

Customised goods

Varied according to the needs of the customer

Interdependence

mutual dependence that they key functions have on one another

Globalisation

Removal of barriers of trade between nations

Supply chain

The range of suppliers a business has and the nature of it's relationship with those suppliers

Sourcing

Requires finding the suppliers needed so that production process can flow smoothly

Global web

The international network of suppliers a business has chosen on the basis of lowest overall cost, lowest risk and maximum certainty in quality and timing of supplies

Technology (influence)

The design, construction and/or application of innovative devices, methods and machinery upon operations processes

Quality expectations

Totality of features and characteristics of products and services that bears its ability to satisfy stated or implied needs

cost-based competition

When businesses bring a cost leadership approach to the operations function

Fixed costs

Do not change regardless of the level of business activity

Variable costs

Vary in direct relationship to the level of business activity

Government policies

Political decisions that affect the business rules and regulations

Compliance

Range of laws a business must comply with

Compliance costs

Expenses associated with meeting the requirements of legal regulations

Environmental sustainability

Operations should be shaped around practices that consume resources today without compromising access to those resources for future generations

Carbon footprint

The amount of carbon produced and entering the environment from operations processes

Corporate social responsibility (CSR)

Open and accountable business actions based on respect for people, community, society and the broader environment

Ethical responsibility

Businesses meeting all their legal obligations and taking it further by adhering to the 'spirit' of the law

Outsourcing

Use of outside specialists to undertake one or more key business functions

Onshore outsourcing

Involves the use of domestic businesses as the outsourcing provider

Offshore outsourcing

Involves taking the activities to a provider in another country

Capital-labour substitution

machinery and technology displace people by doing the work they do

transformed resources

changed or converted into operations process (materials, information, customers)

Key performance indicator

Specific criteria used to measure the efficiency and effectiveness of the business' performance

Transforming resources

Inputs that carry out the transformation process (human resources, facilities)

Transformation

The conversion of inputs into outputs

Volume

How much of a product is made

Lead time

The time it takes for an order to be fulfilled from the moment it is made

Variety

The range of products made

Variation in demand

The amount of products desired by consumers

Visibility

The nature and amount of customer contact/feedback

Sequencing

The order in which activities in the operations process occur

Scheduling

The length of time activities take within operations processes

Gantt charts

A tool which outlines the activities that need to be performed and how long each activity is expected to take

Critical path analysis

A tool which shows what tasks need to be done, how long they take and what order is necessary for those tasks

Technology (transformation process)

Involves the use of machinery and systems to enable businesses to undertake the transformation process more effectively and efficiently

Computer-aided design (CAD)

A computerised tool that allows businesses to create product possibilities form a series of input parameters

Computer-aided manufacturing (CAM)

Software that controls manufacturing processes

Task design

Involves classifying job activities in ways that make it easy for an employee to successfully perform and complete the task

Skills audit

Formal processes used to determined the present level of skilling and any skill shortfalls that need to be made up either through recruitment or through training

Plant layout

The arrangement of equipment, machinery and staff within the facility

Process layout

The arrangement of machines such that the machines and equipment are grouped together by the function they perform

Product layout

Where the equipment arrangement relates to the sequence of tasks performed in manufacturing a product

Monitoring

The process of measuring actual performance against planned performance

Control

Occurs when KPI's are assessed against predetermined targets and corrective action is taken if required

Improvement

Systematic reduction of inefficiencies and wastage, poor work processes and the elimination of any bottlenecks

Bottleneck

An aspect of the transformation process that slows down the overall processing speed or creates an impediment leading to a backlog of incompletely processed products

Outputs

The final good or service that is delivered or provided to the consumer

Warranties

An agreement to fix defects in products

Speed

The time it takes for the production and operations process to respond to changes in market demand

Dependability

How consistent and reliable a business' products are

Flexibility

How quickly operations process can adjust in the market

Customisation

The creation of individualised products to meet the specific needs of the customers

E-commerce

Involves the buying and selling goods and services via the internet

B2B

Business-to-business refers to direct access from one the supplier to the buyer

B2C

Business -to -consumer

Logistics

Refers to distribution including transportation, the use of storage, warehousing and distribution centres, materials handling and packaging

Warehousing

The use of a facility for the storage, protection and later, distribution of stock

Outsourcing (operations strategy)

The use of external providers to perform business activities

Leading edge technology

The most advanced and innovative technology of any point in time

Established technology

Widely accepted and used to help establish basic standards for productivity and speed

Inventory (stock)

The amount of raw materials, work-in-progress and finished goods that a business has on hand at any particular point in time

LIFO

Last In First Out - used for goods that have no use-by date.

FIFO

First In First Out - used for perishable items such as food and drink

JIT

Just In Time - method of managing the flow and storage of stock. Inputs delivered as required.

Quality management

Those processes that business undertakes to ensure consistency, reliability, safety and fitness of a purpose of product

Quality control

Pre-determined quality targets would be set and failure to meet the targets would need to be assessed

Quality assurance

Proactive approach to quality where a businesses emphasises quality in the design of a product

Total Quality Management

Holistic approach in that quality becomes both a commitment and the responsibility of every employee of the business