HSC BUSINESS STUDIES

ops only for now

strategic role of operations

cost leadership, good/service differentiation

cost leadership

Aiming to have the lowest costs in the industry, or to be the most price-competitive in the market. The lower the prices the higher the profit margins

good/service differentiation

ensures a business and its product can stand out from competitors, so consumers can be more drawn to the business—competitive advantage

standardised goods

perishables/non perishables, standardised/customised, intermediate goods

standardised services

standardised/customised, selfservice

list the influences on operations management (8)

globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability, corporate social responsibility

impact of globalisation on operations management

removes barriers for change, facilitates exchange of ideas, physical/intellctual capital

impact of technology on operations management

cost speed dependability customisation flexibility quality

impact of quality expectations on operations management

how well the product is designed, how durable, etc. different businesses have different quality expecations from customers. maintain quality through strategies.

impact of cost based competition on operations management

fixed and variable costs, cost leadership

impact of government policies on operations management

taxation, required material handling practices, food handler basics, whs standards, policies about public health, trade and materials, trade policies, etc. e.g. Austrade helps businesses break into global economy

impact of legal regulation on operations management

compliance: WHS (2011), CCA (2010) EPBCA (1999), Food Act (2003)

WHS Act (2011)

safe worksite, materials, machinery, systems of work, training, etc.

CCA (2010)

the quality, environmental standards (like energy ratings), safety, and information required to be checked before a product is created or sold

EPBCA (2011)

need to be approved by gov. in order to minimise harm to environment

WHS (2011)

Recognise/minimise risk, safe working environment, right to refuse unsafe work

FA (2003)

safe handling of food, licenses, inspecting

impact of environmental sustainability on operations management

precautionary principle: reduce impacts before actions cause damage, resource management, good rep

example of environmental sustainability

ikea factories made up of 55% recycled materials, uses solar panels and renewable energy

corporate social responsibility

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

triple bottom line

people, planet, profit (social, environmental, and financial)

how does legal responsibility differ from csr

legal responsibility you are obligated to comply to as bounded by the government, such as paying income, taxes, healthcare, etc. csr indicates a business is doing more than the bare minimum

operations processes

1. inputs (transforming and transformed) 2. transformation process (4Vs: variation, variety, visbility, volume; sequencing and scheduling (Gantt, crit path); tech, task design and process layout; monitoring & controlling and improvmenet

transformed resources

changed and converted during the process of transformation. they add value

examples of transformed resources

materials, information (internal/external from research and development and also business plans), customers (customer choice shapes inputs and quality)

transforming resources

inputs that carry out the transformation process and enable adding value

examples of transforming resources

facilities, human resources, equipment

transformation process

1. variation in demand, variety, volume, visibility 2. sequencing and scheduling 3. technology, task design, and process layout 4. monitoring, control and improvement

four Vs

variation in demand , variety, volume, visibility (customer contact)

influence of variations in demand

Forecasting demand so that adjustments can be anticipated and businesses can react accordingly

influence of variety

greater mix/variety of products will require greater flexibility i.e. transformation process will need more complex process

influence of volume

higher the volume lower the cost, changes in demand will require you to produce appropriate amts of products

why should we not produce too much products

demand changes so may become deteriorated, obsolete

why we should keep up with high demand

dictates how much we should produce, if we don't produce enough it goes to our competitors

influence of visibility

customer contact: transparency, customer contact, feedback, surveys (customer choice shapes the products a business creates)

sequencing and scheduling

gantt charts, critical path analysis

gantt charts

Bar chart that shows the scheduled and completed work, used in planning and tracking a project and showing how much time should be taken on each part of the process

critical path analysis

Path that takes the longest is the shortest length of time to complete all tasks…Shows tasks, time taken, and what sequence is necessarily for them to be completed.

gantt chart vs critical path

gantt chart has one possible path while critical path provides multiple that involve different periods of time

technology in operations processes

speeds things up, reduce costs/compliance costs

task design

task design, job description, specifications, recruitment, selection, training + skills audit if needed

types of process layouts

process layout, product layout, fixed position, office layout

process based layout

grouped based on function/process they perform, e.g. fryer, hamburger assembly, drinks dispensing machine. High variety low volume

product layout

High volume low variety. Activities are sequenced, for example storage, assembly, packaging, selling.

fixed position

bulky products such as planes, personnel come to fixed work area and work around it

office layout

fixed position, materials provided

monitoring against kpis

predetermined variables that target levels of performance. for example, lead times, inventory, staff turnover, cost analysis, defect rates, warranty claims, etc.

controlling

Occurs when KPIs are assessed against predetermined targets and corrective action is taken if required (changes to the operations process)

improving

above and beyond

outputs

customer service, warranties

customer service

How a business meets and exceeds the expectations of customers in their operations. build good relationships and customer loyalty

warranties

Assess effectiveness of operations processes by measuring the number of warranty claims—defects arising from an issue in transformation.

why are warranties important

dont have too many because costs a lot + correction costs + also bad rep

strategies

• objectives (speed, dependability, flexibility, quality, customisation, cost)

• new product/service design and development

• supply chain management (logistics, e-commerce, sourcing)

• outsourcing

• technology (leading edge/established)

• inventory management (holding stock, fifo, lifo, jit)

• quality (assurance, control, improvement)

• overcoming resistance to change (financial costs, purchasing new equipment, redundancy payments, retraining, reorganising plant layout, inertia)

• global factors (global sourcing, economies of scale, scanning and learning, research and development)

objectives

speed, dependability, cost, quality, flexibility, customisation

speed

respond to market: adapt input times and processing levels, reduce lead times

dependability

reduce customer warranty, complaints, through quality management processes

costs

minimise expenses to achieve cost leadership. Reduce variable costs, costs pre/during/post production like r&d . work w processes to achieve economies of scale which help reduce costs and allat

quality

conformance + design, need to offer value for money

flexibility

adapt to change in the market. Increase variety and volume by increasing capacity

customisation

tailored products which will increase customer satisfaction

new product design

in response to new technology/shifting consumer preferences.

steps of product design

Research/dev, design and prototype, testing, refinement, launch and distribution

supply chain management

e-commerce, logistics, global sourcing

e-commerce

e-procurement (keeping track of stock online), selling online, makes things more convenient

logistics

producer -> agent/wholesaler -> retailer -> consumer

global sourcing

cheaper but lead times, logistics, quality, etc. Economies of scale though so yay

local sourcing

lower lead times but can be more expensive esp small businesses, more convenient, easier to manage qualities

benefits of outsourcing

focus on other business functions, cheaper, no need to hire special staff, accountability of detailed contracts to meet kpis, access of skills & knowledge, process capability

disadvantages of outsourcing

loss of control and corporate knowledge, takes a while to get paid back, creates redundancies, loss of control over quality especially

technology

leading edge, established

leading edge technology

quicker, more convenient, can be more accurate than humans but more expensive

established

dependable but may become obsolete, slower, may not be able to keep up with competitors

keeping stock good

reduces costs, acquire materials at the best price, reduce lead times between order and delivery, possession of assets means liquidity

disadvantages of holding stock

become obsolete, deteriorate, storage/facility costs, perishable

fifo

first in first out. Stock bought first is cheaper. Cost and value rises over time so COGS is lower on financial statements and gross profit is higher.

stock for fifo is

cheaper / bulk

cogs for fifo is

lower as you buy at the cheapest price

gross profit for fifo is

higher

stock for lifo is

more expensive

cogs for lifo is

higher

gross profit for lifo is

lower

jit

Producitng goods as they are demanded, purchasing inputs only when they are needed. Free up storage however cant use EOS

global factors

global sourcing, economies of scale scanning and learning, research and development (R&D)

maccas r&d facility

Speedee Labs Chicago R&D / innovation facility

quality management

quality control, assurance, improvement

quality control

checking/monitoring different stages of transformation to make sure output qualities are up to standard

maccas quality control

Performance And Customer Excellence

quality assurance

benchmarks that make sure standards are achieved and prevent issues in the first place

example of quality assurance benchmarks

ISO 9000 family of international standards, ISO 9001 has requirements + certification

maccas quality assurance

HACCP hazard analysis critical control point program. makes sure food quality is up to standards. changed patties for quarter pounders in the US

quality improvement

continuous improvement/total quality assurance to show commitment to quality standards

overcoming resistance to change

financial, psychological, strategies

financial resistance

new equipment, redundancies, new skills

psychological resistance

inertia, fear of being replaced

strategies for resistance

change agents, be proactive, be gradual about it, involve employees in decision making

strategic role

planning and monitoring of a business’s financial resources to enable to business to achieve their financial objectives

financial objectives

solvency, liquidity, efficiency, profitability, growth

solvency

ability to maintain positive cashflow + debts in the long term

liquidity

ability to repay debts + maintain positive cashflow in the short term