3. Operations

Question 1

What is the role of task design in the transformation process?

Answer 1

• Task design involves classifying job activities in ways that make it easy for an employee to successfully perform and complete the task.

Question 2

Provide a case study example relating to warranties and the recall of defective products.

Answer 2

CASE STUDY EXAMPLE - Consider the example of the 2016 and 2017 recall of cars carrying Takata airbags. The recall of tens of thousands of cars led to the replacement of the faulty bags. However, the rectification costs money. Operations managers needed to trace the source of the fault in manufacturing and rectify it. In this way, the warranty claims lead the business to improve transformation processes.

Question 3

Describe the influence of corporate social responsibility on the operations function.

Answer 3

Corporate social responsibility refers to open and accountable business actions based on respect for people, community/society and the broader environment. The aim of corporate decision making is not simply profitability, but rather something that reflects a range of community concerns and social expectations.

Question 4

What is the interdependence of operations with finance?

Answer 4

Finance requires operations to produce good quality, cost effective products that fulfil the needs/wants of consumers, facilitating the maximisation of profits. However, operations require finance to develop budgets + cost controls and allocate funds to successfully produce efficient goods/services.

Question 5

What is the influence of visibility within the transformation process?

Answer 5

• Customer contact or ‘feedback’ can directly affect transformation processes.
• This is because customers and their preferences can shape what businesses make. Customer contact may be direct or indirect.

Question 6

What is meant by the term product standardisation?

Answer 6

Standardisation involves the making of products that are identical. Typically, this involves mass producing items in high volume, with no variety and at a low cost per unit.

Question 7

What are warranties?

Answer 7

• A good way to assess the effectiveness of operations processes is to measure the number of warranty claims.
• Warranty claims are made against goods that have defects arising from an issue in transformation.

Question 8

What is meant by the term product differentiation in goods?

Answer 8

Refers to how goods may be differentiated in a number of different ways, including varying the actual product features, product quality and augment features.

Question 9

Describe the influence of globalisation on the operations function.

Answer 9

In large corporations, the operations function is generally conducted overseas, in developing countries as the costs of production are cheaper. Without globalisation, outsourcing the production process to lessen costs would not be possible.

Question 10

What is meant by ‘quality’ as a performance objective?

Answer 10

• Quality refers to the standard of a good or service. It has many aspects and largely depends on the customer’s expectations.
• Three quality performance objectives are quality of design, quality of conformance and quality of service.

Question 11

What is the difference between legal compliance and ethical responsibility?

Answer 11

The main difference between legal compliance and ethical responsibility is that legal compliance is bound to obey whereas ethical responsibility is a choice.

Question 12

What is one trend in supply chain management?

Answer 12

Supply rationalisation

• Involves a business assessing the number and diversity of its suppliers and assessing their effectiveness.

Question 13

What is the interdependence of operations with marketing?

Answer 13

Operations requires marketing to research and design products that are in high demand within current consumer markets; while marketing will require operations to - through the transformation process - generate this product in physical form.

Question 14

What is self-service?

Answer 14

Self-service means encouraging the customers to take the initiative to help themselves - businesses can concentrate on customisation when a person cannot help themselves.

Question 15

Describe the influence of quality expectations on the operations function.

Answer 15

The expectations that people have of businesses determine how products are designed, created and delivered to customers. This implies that operations processes must follow particular standards to ensure their product meets the quality expectations of consumers.

Question 16

What are customised goods?

Answer 16

Those that are varied according to the need of customers - E.g Nutella added customization to their marketing strategy, allowing customers to add their name to the jar.

Question 17

What is the influence of volume within the transformation process?

Answer 17

• Volume refers to how much of a product is made.
• Volume flexibility refers to how quickly the transformation process can adjust to increases or decreases in demand.
• This responsiveness to the required changes in volume is essential to effectively managing lead times.

Question 18

Define globalisation.

Answer 18

Globalisation refers to the integration between different countries and economies and the increased impact of international influences on all aspects of life and economic activity.

Question 19

What is meant by the term product differentiation in services?

Answer 19

Refers to how services may be differentiated in a number of different ways, including varying the amount if time spent on a service, the level of expertise brought to the service and the quality of materials/technology used in service delivery.

Question 20

What is the influence of variety within the transformation process?

Answer 20

• Mix flexibility is the mix of products made, or services delivered through the information process.
• The influence of variety on transformation processes is: the greater the variety made, the more the operations process needs to allow for variation.

Question 21

What is the role of technology in the transformation process?

Answer 21

• In the manufacturing sector, technology can be used to speed up (shorten) processes and enable fuller utilisation of raw materials.

Question 22

What is the role of process layout in the transformation process?

Answer 22

• The process layout is the arrangement of machines such that the machines and equipment are grouped together by the function (or process) they perform.
• The process layout is sometimes called functional layout.

Question 23

What is meant by ‘cost’ as a performance objective?

Answer 23

• Cost as a performance objective refers to the minimisation of expenses such that operations processes are conducted as cheaply as possible.

Question 24

What is one trend in supply chain management?

Answer 24

Flexible or Responsive Supply Chains

• Including ‘lean’ production which refers to minimising waste and storage costs.

Question 25

What is the role of controlling in the transformation process?

Answer 25

* Control occurs when KPIs (Key Performance Indicators) are assessed against predetermined targets and corrective action is taken if required. This means controlling compares what was intended to happen with what has actually occurred.

Question 26

What is the role of Gantt charts in sequencing and scheduling?

Answer 26

* The Gantt chart was created by Henry Gantt in 1917. * The Gantt chart outlines the activities that need to be performed, the order in which they should be performed and how long each activity is expected to take.

Question 27

Describe the influence of environmental sustainability on the operations function.

Answer 27

Environmental sustainability (ecological sustainability) means that business operations should be shaped around practices that consume resources today without compromising access to those resources for future generations.

Question 28

What is meant by the term economies of scale in the operations function?

Answer 28

The concept that a firm needs to achieve a large scale of production in order to minimise costs is known as economies of scale.

Question 29

Describe the influence of legal regulations on the operations function.

Answer 29

Legal regulations such as the minimum wage ensure Australian firms are paying their domestic employees a sustainable income. Regulations on WHS are implemented by the Aus Gov to protect domestic employees for work place accidents, especially in the evident where heavy machinery is being used.

Question 30

What is supply chain management?

Answer 30

* Supply Chain Management (SCM) involves integrating and managing the flow of supplies throughout the transformation processes to best meet the needs of customers.

Question 31

Describe the influence of cost-based competition on the operations function.

Answer 31

Cost-based competition is a feature of operations management when businesses implement a cost leadership approach. That is, they focus on reducing costs to a minimum while maintaining profit margins. Costs may be reduced by achieving economies of scale, eliminating waste, bulk buying input and automated production systems.

Question 32

Describe the influence of government policies on the operations function.

Answer 32

Policies such as taxation rates, work health and safety (WHS) standards, public health policies and environmental policies all influence the way a business carries out their operations process.

Question 33

What is the role of E-commerce in supply chain management?

Answer 33

* Involves the buying and selling of goods and services via the internet.

Question 34

What are perishable goods?

Answer 34

A perishable good is any product in which quality deteriorates due to environmental conditions through time, such as meat.

Question 35

What is the role of monitoring in the transformation process?

Answer 35

* Monitoring is the process of measuring actual performance against planned performance. * Monitoring involves the measuring of all aspects of operations, from supply chain management and the use of inputs, through to transformation processes and outputs.

Question 36

What is meant by 'customisation' as a performance objective?

Answer 36

* Customisation refers to the creation of individualised products to meet the specific needs of the customers.

Question 37

What are Intermediate goods?

Answer 37

Products that are made during a manufacturing process but that are also used in the production of other goods.

Question 38

What are transformed resources?

Answer 38

Transformed resources are those inputs that are changed or converted in the operations process; they are transformed by the operations processes. * Materials * Information * Customers

Question 39

What is environmental sustainability and social responsibility?

Answer 39

Environmental sustainability is often sacrificed by firms for monetary gains, worsening pollution, waste, deforestation and climate change. However, customers eventually find out which businesses are acting responsibly and which are not. They may stop buying a business’s product if they learn that the business is exploiting employees and/or polluting the environment.

Question 40

What is meant by 'flexibility' as a performance objective?

Answer 40

* Flexibility refers to how quickly operations processes can adjust to changes in the market. * Time and flexibility are related; the quicker the processing time the greater the likelihood that processes can be adjusted quickly.

Question 41

Describe the influence of technology on the operations function.

Answer 41

Technologies are generally implemented within the operations function to make production more efficient. They also used in logistics and distribution, quality management, all aspects of inventory management and supply chain management.

Question 42

What are transforming resources?

Answer 42

The other collection of inputs to any operations processes are transforming resources which are those inputs that carry out the transformation process. They enable the change and value-adding to occur. * Human resources * Facilities

Question 43

What are standardised services?

Answer 43

Standardised services are those that undertake the same processes to produce the same outcome each time they are performed.

Question 44

What is service design and development?

Answer 44

* When designing a service it is important to consider the explicit and implicit nature of the service. * The explicit element of the service is the inputs such as time, expertise, skill and effort. The implicit element is the ‘feeling’ that a customer experiences as part of the service.

Question 45

What is the role of improvement in the transformation process?

Answer 45

Improvement refers to the systematic reduction of inefficiencies and wastage, poor work processes and the elimination of any bottlenecks.

Question 46

What is meant by the term balance between cost and quality in the operations function?

Answer 46

The direct relationship between cost and quality - if the costs of inputs is very low then it is likely that the final prices will reflect the lower quality of inputs and processes.

Question 47

what is the strategic role of operations?

Answer 47

The strategic role refers to the transformation process that converts resources into finished goods and services. It encompasses both services and manufacturing.

Question 48

What is the role of global sourcing in supply chain management?

Answer 48

* Global Sourcing refers to business purchasing supplies from different locations depending on their production needs.

Question 49

What is customer service?

Answer 49

* Customer service refers to how well a business meets and exceeds the expectations of customers in all aspects of its operations. * Recent market research has shown that businesses that provide superior customer service can charge an average of 10 per cent more for the same goods and services.

Question 50

what is cost leadership?

Answer 50

Cost leadership involves aiming to have the lowest costs or to be the most price-competitive in the market.

Question 51

What is one trend in supply chain management?

Answer 51

**Backwards Vertical Integration** * When a business buys a supplier to ensure supply. Many businesses do not own or control their source of raw materials or their distribution channel. This is an alternative to outsourcing, as it has greater control.

Question 52

What is cross branding?

Answer 52

Cross branding is an arrangement that associates a single product or service with more than one brand name to add value to the product.

Question 53

What are non-perishable goods?

Answer 53

They are inherently more durable than perishable goods and therefore the issues of inventory management arise for the operations function.

Question 54

What is the influence of variation in demand within the transformation process?

Answer 54

* A variation in demand can impact significantly on transformation resources. * An increase in demand will require increased inputs from suppliers, increased human resources, increased energy use and increased use of machinery and technology.

Question 55

What is one trend in supply chain management?

Answer 55

**Cost Minimisation** * This includes taking operations offshore.

Question 56

What is new product design?

Answer 56

There are 2 types of approaches when it comes to design: 1. The consumer approach - The preferences and desires of consumers, as identified by market research. 2. The technology approach - changes and innovations in technology that enable new, appealing products to be made.

Question 57

What is the role of logistics in supply chain management?

Answer 57

Logistics is a term broadly referring to distribution but also includes: * transportation (including transportation modes) * the use of storage, warehousing and distribution centres * materials handling and packaging.

Question 58

What is the interdependence of operations with HR?

Answer 58

Operations requires HR to ensure there are enough skilled employees available for production tasks; while HR requires operations to complete those tasks efficiently, generating profit through the sale of quality goods.

Question 59

What is meant by 'speed' as a performance objective?

Answer 59

* Speed refers to the time it takes for the production and the operations processes to respond to changes in market demand. * Goals for speed include reduced wait times, shorter lead times and faster processing times.

Question 60

What is the role of critical path analysis in sequencing and scheduling?

Answer 60

* The critical path is the shortest length of time it takes to complete all tasks necessary to complete the process or project.

Question 61

What is meant by 'dependability' as a performance objective?

Answer 61

* Dependability refers to how consistent and reliable a business’s products are - for example, doing things on time.