1
Q
What is operations
A
Refers to the transofmraiton of inputs into outputs of Goods and services
2
Q
What does effective management aim to do
A
- increase productivity
- improve quality
- efficciency
3
Q
what is value adding and when does it occur
A
Value adding is the creation of extra value as inputs are transformed into outputs (e.g. adding GPS into the production process of a car increases the value of the car or window tinting).
4
Q
What does the operations process involve
A
— Production of goods and services
— Production controls and associated quality controls on processes (e.g. toy manufacturer inspects a batch of good before selling or a chef tastes the food before serving)
— Input management and capacity (volume of output) decisions
— Inventory controls
— Supply chain management (SCM)
— Logistics and distribution
— Management decision making in terms of operational processes
5
Q
what techniques allow for the strategic role of operations to function
A
- cost leadership
- good/service differentiation
6
Q
What is cost leadership
A
- This refers to strategies where a business aims to be the lowest cost manufacturer in the market
- Strategies include
> economies of scale (long run average cost curve - operating at the technical optimum)
> standardisation
> use of technology
7
Q
Case study for a business that used cost leadership
A
Samsung - in 2016 relocated production from Korea and China to Vietnam. The Vietnamese government assisted through 10 yeats of tax consessions and have achieved great efficiencies that almost half of all devices are now produced ther. Samsung has recently begun construction of a $220 million research and development centre in a bid to explore further cost advantages.
8
Q
What is goods/service differentiation
A
It is a key strategy used by operations management that refers to distingusishing a product in some way from its compeitiors (the opposite of standardisation - making all productss homogoneous)
9
Q
Case study for product differentiation
A
McDonald’s
McDonald’s uses product differentiation through its McCafé range, offering barista-made coffee and bakery items that set it apart from other fast-food chains and attract customers seeking café-quality beverages.
10
Q
How do you achieve product differentiation for goods
A
- Varying the actual product features (e.g. cereal can be just processed grain at its most basic form or mixed with ingredients such as sugar, dried fruits and nuts)
-** varying product quality** (e.g. by making a very affordable model and then a quality model sol at a higher price) - Varying any augmented features (e.g. value adding through GPS’s in cars or bluetooth features)
11
Q
how do you achieve product differentiation for services
A
— Varying the amount of time spent on a service
— Varying the level of expertise brought to a service
○ Skilled employees = specialised service
— Varying the qualifications and experience of the service provider
— Varying the quality of materials/technology used in service delivery
○ Computer-based programs for accounting
12
Q
What is an industry
A
Industry- A sector is business activity characterised by businesses that produce similar things (goods and/or services)
13
Q
Examples of the different types of goods that are sold in the product market
A
— Goods are distinguished by those that are perishable or durable
— Consumer goods (range of goods)
— FMCG (Fast-moving consumer goods) refers to consumer goods that are produces and sold quickly (e.g. household kitchen goods)
— Perishable goods include fresh food, soft drink, and frozen goods(tend to deteriorate quickly
14
Q
Examples of the different types of services that are sold in the product market
A
— Intangible products that involve human activity or effort
— e.g. banking and finance, education, recreation, entertainment, construction, information services and law
— Services may be sold with complementary goods
— Involve the application of human effort - physical mental or both
— Services are required for the transportation, storage and sale of goods
— Priced according to time, level of specialisation, degree of effort, level of risk involved and reputation of the service provider.
15
Q
Define interdependance
A
Interdependence refers to the notion that the key business functions of operations, marketing, finance and human resources, all affect every other business function. Decisions made in any key function will have impacts and implications on every other function
16
Q
Provide a case study for interdependance
A
- Case study: Mazda
○ Seeks to create a whole new line of electric vehicles
○ This means that these vehicles need to be designed (marketing and operations)
○ Design needs to be made by people skilled to do so (finance and HR)
17
Q
What are the 2 types of inputs
A
- Transformed resources (e.g. raw materials)
Transformed resources are those inputs that are changed or converted in the operations process - transforming resources (e.g. human resources)
Transforming resources are those inputs that carry out the transformation process
18
Q
What are the 4 different types of transformation processes
A
- The influence of volume, variety, variation in demand and visibility (customer contact)
- Sequencing and scheduling - Gantt Charts, critical path analysis
- Technology, task design and process layout
- Monitoring, control and improvement
19
Q
What is the influence of volume
A
It is the number of products or services that operations needs to produce flexibility should be achieving to adjust volume according to demand and supply.
- over producing will cause waste and inventory
- underproduing will lead to a loss of sales
20
Q
what is the influence of variety
A
The number of different models and variations in services that operations needs to create.
- Mix flexibility - the mix of products and services delivered through the information process. The greater the mix (ops processes need to cater for variation and larger plants may be required
- too much variation can cause higher costs, however can have an increased g/s differentiation which can lead to greater customer satisfaction
21
Q
What is the influence variation in demand
A
The variation in demand over time; operations needs to be flexible to increase or decrease output to meet demand.
- demand may be forecasted (e.g. christmas) and therefore operations management need to account for it
22
Q
What is the influence of visibility to customers
A
The degree to which customers can see the operations in action and be involved in the process (e.g. surveys and customer reviews)
- businesses with high g/s diff and customisation often engage with high levels of customer contact and therefore visibility
23
Q
case study for the 4V’s
A
4V’s (Maccas) -
Volume: Making the goods on demand (does increase lead times however decreases waste)
Variety: Customisation of goods as well as a variety of options.
Variation in demand: When the forecasted sales are greater than usual, often managers will roster or aim to get more employees working during that period of time (e.g. Christmas morning, a lot of employees are on the floor as our hourly projection often is 8k)
24
Q
what are 2 sequencing and schedulling tools
A
- Gantt Chart
- Critical path anaylsis
25
What is a gantt chart
it is a type of bar chart that illustrates a project schedule
- illustrates the start and finish dates of the terminal elements and summary elements of a project
- terminal elements and summary elemts comprise the work breakdown structure of the project
26
What is a CPA
It is a S&S tool that shows what needs to be done and when. However, the CPA helps operations management to identify bottlenecks (an aspect of the production process that slows the process down) and plan for reducing lead times (the time taken from commendcement of production to the fulfilment of an order) accordingly.
- finding the longest path through from the start to finish. This is the critical path that determines the length of the overall processes.
27
What is technology (transformation)
Technology is the application of scientific knowledge for practical purposes, expecially in industry. It is the machienery and devices developed from scientific knowledge that businsesses use in the operations process.
- there are 2 types; pffoce tech (computer), and manufacturing tech (Computer aided-design)
- leading edge and established
28
Technology case study (processes)
**Woolworths Scan & Go technology** allows customers to use the Woolworths App to scan items with their phone while shopping and pay digitally at the end, improving operational efficiency and increasing customer satisfaction through shorter checkout queues for Woolworths Group.
29
What does task design involve
involves classifying job activities in ways that make it easy for an employee to successfully perform and complete a task and remain efficient
30
What are the steps in task design
1. define what needs to be done in a general statement
2. analyse the general job into specific duties
3. allocate a degree of difficulty and a time element
4. match tasks to existing/federal awards
5. allocate task via job description and experience of staff
31
What is the process layout
refers to the arrangement of equipment, machinery and staff within the facility. The design of the plant layout will have a huge effect on the efficiency of the operations of a business
- operations managers need to consider a range of layout elements such as space, equipment, technology, stock for location, conformity with legal requirements (WHS)
- the layout of the plant is determined by the colume of production and what is being produced
- The layout options include: Process layout, product layout, fixed position layout, office layout
32
What is monitoring
Monitoring is comparing actual performance against planned performances. Measurements are based on key performance indicators (KPI).
33
What is controlling
Taking corrective action and implementing strategies to improve sales and efficiency.
Ways to improve include
- reducing inefficiencies, wastage and poor work processess.
**extra add on:
** — All operations should be monitored against KPIs (key performance indicators) for their effectiveness
— Control occurs when corrective action is taken if there is a discrepancy between performance and goals
Improvements lead to reduction in inefficiencies such as bottlenecks (a slow process in the transformation)
34
case study for monitoring and controlling
Maccas
- use KPIs in the drive through
- shows target seconds and actual seconds (monitoring)
- if actual time is higher than target, alerts operations management and corrective action (controlling) is taken (swapping that person with someone that is of greater efficiency)
35
what are outputs
outputs refer to the end result of the business efforts - the good or service that is provided or delivered to the customer. Products are a combination of goods and services, and outputs may be inputs used by other businesses or final products to be disturbed to consumers.
36
What are the 2 parts of outputs (syllabus)
1. customer service
2. warranties
37
Customer service definition
refers to how well a business meets or exceeds the expectations of consumers. Businesses interact with their customers.
38
What is a warranty
refers to the sgreement to fix defects in products or in their service and warranties is a good way to ultimately enhance the operations processes.
- e.g. fair trading act (1987 NSW)
- e.g. competition and consumer Act 2010 companies.
39
Warranty case study
For Australian consumers, Apple iPhone warranty must be compliant with Competition and Consumer Act 2010 and other applicable Australian consumer protection laws and regulations
Apple’s iPhone one year warranty states-
“You are entitled to a replacement or refund for a major failure and for compensation for any reasonable foreseeable loss or damage…”
40
What is an internal influence
factors within the business and over which the business has a high degree of control
41
What is an external influence
Factors outside of a business and over which the business has little to no control
42
Define globalisation as an influence
Refers to the removal of barrier of trade between nations. it is characterised by an increasing integration between national economies and high degree of transfer of the factors of production (e.g. labour).
- It also allows for offshoring (another name for globalisation and outsourcing overseas
43
Define technology as an influence
Technological change—closely linked with globalisation—has had a greater impact on business competitiveness and employment than changes in trade barriers, as it improves operational performance through better quality, speed, dependability, flexibility, customisation, and reduced costs via technology that is leading edge or established utilised in the administration (planning tech - e.g. Gantt Charts) and range (large machinery in manufacturing plants) operations
44
Define quality expectations as an influence
means consumers have a perception in their mind about the position a brand occupies. Often the price, where purchased, whether it is new or used determine the quality of a product.
45
Define cost-based competition as an influence
occurs when businesses compete by lowering their costs so they can offer lower prices than competitors (sustaining a competitive advantage). Businesses can achieve this through economies of scale, through the reduction of input costs allowing for the prices of finished goods to be reduced.
46
Define government policies as an influence
The government can impose new policies onto businesses such as
- Taxation rates; required materials handling practices; WHS; training and rules; public health policies; environmental policies; employment relations; trade and industry policies.
- Political decisions affect the business rule and regulations which directly affect the management of key business functions. There is a breadth of policies that affect operations management.
- e.g. carbon tax under the Clean Energy Act (2011).
47
Define legal regulation as an influence
refers to how all aspects of the business must abide by the laws of business
- compliance cost - costs that occur when following the law
- e.g. WHS legislation and minimum wage pay
48
Define environmental sustainability as an influence
Refers to reducing our impact on the environment and is a way to achieve g/s differentiation. It measn business operations should be shaped around practices that consumer resources today without compromising access to those resources for future generations.
e.g. through the implementation of solar panels
49
Define CSR as an influence
It is the "going above and beyond" to demontrate their corporate social responsibility. It refers to going further than just the environment but society as a whole, however can cost more to do the right thing. open and accountable business actions based on respect for people, community/society and the broader environment. It involves businesses doing more than just complying with the laws and regulations.
- CSR means that the driver of corporate decision making is not simply profitability, but rather something that more broadly reflects a range of community concerns and social expectations.
50
What is the difference between legal compliance and ethical responsibility
* Legal compliance refers to abiding by the word of the law, whereas ethical responsibility encompasses a much broader integration of social, community and environmental concerns.
- In demonstrating ethical responsibility, a business is demonstrating that it values something more than just earning maximum profits because it is allocating money over and above what it costs to comply with the law.
51
What is environmental sustainability and social repsonsibility
* Environmental sustainability refers to the economic, social and environmental performance of a business.
* Social responsibility refers to a business’s management of the social, environmental, political and human consequences of its actions.
* Environmental sustainability and social responsibility are features of an ethical approach to operations management.
52
CSR Case study
Ronald McDonald House Charities, supported by McDonald's, provides accommodation and support for families with seriously ill children near hospitals, demonstrating corporate social responsibility by contributing to community wellbeing and supporting families during medical treatment.
53
Environmental sustainability and social responsiblity case study
Cadbury uses 100% sustainably sourced cocoa through its Cocoa Life initiative, demonstrating environmental sustainability and social responsibility by supporting sustainable farming practices and improving the livelihoods of cocoa-growing communities.
54
Globalisation case study
Apple demonstrates globalisation by sourcing components from multiple countries and assembling many of its products in China through manufacturers such as Foxconn, allowing it to access specialised labour and lower production costs, improving operational efficiency and supporting a cost leadership strategy.
55
Technology case study (influence)
Woolworths Scan & Go technology allows customers to use the Woolworths App to scan items with their phone while shopping and pay digitally at the end, improving operational efficiency and increasing customer satisfaction through shorter checkout queues for Woolworths Group.
56
Quality expectations case study
Tiffany & Co. demonstrates quality expectations as an influence on operations by maintaining strict sourcing partnerships with suppliers such as De Beers and implementing rigorous quality control processes, including detailed diamond grading, multiple inspections during production, and offering lifetime repair, replacement or refund if products fail to meet their premium standards, ensuring consistently high-quality jewellery and protecting their brand reputation.
57
Cost-based competition case study
Kmart Australia demonstrates cost-based competition as an influence on operations by sourcing large volumes of inventory from low-cost manufacturing countries such as China, India and Vietnam, allowing the business to achieve economies of scale and maintain low prices for consumers through efficient supply chain and procurement strategies.
58
Government policies case study
**Carbon Tax
**Aus govt introduced a carbon pricing scheme ("Carbon tax") through the Clean Energy Act (2011). The initiative was intended to control emissions in the country and support the growth of the economy through the development of clean energy technologies. However, although it did achieve a reduction in the country's carbon emissions, the initiative faced significant challenges from the opposition and the public, as it resulted in increased energy prices for both households and industry and was finally repealed in 2014, reflecting the influence of govt policies on the prices of business products.
59
Legal regulation case study
Bunnings Warehouse demonstrates legal regulation as an influence on operations by complying with legislation such as the Work Health and Safety Act 2011 and the Fair Work Act 2009, ensuring safe working conditions and paying employees at least the minimum wage, which incurs compliance costs but maintains legal and ethical business practices.
60
Environmental sustainability case study
Cadbury uses 100% sustainably sourced cocoa through its Cocoa Life initiative, demonstrating environmental sustainability and social responsibility by supporting sustainable farming practices and improving the livelihoods of cocoa-growing communities.
61
CSR Case study
Ronald McDonald House Charities, supported by McDonald's, provides accommodation and support for families with seriously ill children near hospitals, demonstrating corporate social responsibility by contributing to community wellbeing and supporting families during medical treatment.
62
What do strategies refer to
Strategies (a method implemented) in business refer to the goals that the business tries to achieve. Operations Strategies aim to achieve performance objectives (goals of the business).
63
What are the performance objectives
Quality, speed, dependability, flexibility, customisation, cost
64
65
What are the 6 performance objectives
1. Quality = how well-designed, well-made and functional goods sold by the business are
2. Speed = refers to the amount of time taken for the production and operations process to respond to changes in market demand
3. Dependability = refers to how consistent and reliable a business' products are
4. Flexibility = refers to how quickly operations processes can adjust to changes in the market (can do this by increasing the capacity of production by implementing leading edge technologies)
5. customisation = refers to the creation of individualised products to meet specific customer needs (greater cust. = greate costs)
6. Costs = refers to the minimisation of expenses so that operations processes are conducted as cheaply as possible (thorgh new tech, better use of inputs, and minimised wastage)
66
What is product or service design and development
2 main approaches to product design and development:
1. Consumer approach = consumer preferences are identified through R&D, which determine the products that will be produced
2. Capability approach = changes in innovation and technology which enables businesses to use leadign edge tech to provide greater product functionality
*Businesses must also consider factors of quality, supply chain management, capacity management, and cost - This will allow a customer to determine the value and usefulness of the product (this is known as product utility)*
New services
- explicit service = tangible aspect (e.g. skill and effort)
- impicit service = intangible aspect (feeling and psychological wellbeing)
67
Case study for new product and service design and development
Qantas
- they must find new services or upgrade and update existing services to maintain their competitiveness and profitabilitu
- They launched new airlines such as Jetstar Asia, Jetstar pacific, and Jetstar Japan to take advantage of and exploit opportunities such as the recent growth in the Asian aviation market.
68
What is supply chain management
*Supply Chain management involves the integreating and managing the flow of supplies through inputs, transformation processes, and outputs in order to best meet the need of customers through:
- logistics
- E-commerce
- sourcing (global sourcing) *
1. **Logistics** -
Refers broadly to distribution, transportation, storage, warehousing and materials handling.
2. **E-commerce** -
involves the buying and selling of goods and services via the internet.
2 types:
- B2B (supplier to business - gives access to supplier to assess the needs of the business)
- B2C (selling of products over the internet, usually by credit card)
3. **Global sourcing** -
specifically means buying or sourcing from wherever there are suppliers that best meet the sourcing requirements without being contrained by location
69
supply chain management case study
Global sourcing = Qantas has enployed pilots from NZ and some cabin staff from ASia at lower wages tan paid in Aus while having some engine maintainence carried out in Malaysia on low cost-benefit basis.
70
what is outsourcing
Outsourcing involves the use of external providers to perform tasks and business activities. It is based on the theory that by specialising in a particular function, it will lead to lower costs and greater efficiency, witch in turn, contributes in achieving the strategic role of cost leadership.
- Outsourcing gloablly will provide benefits to the sbuiness in forms of lower costs and increase efficiency.
71
outsourcing case study
Qantas outsources nearly all of its IT operations and some call centre operations, allowing them to sace in capital outlay and labour costs, increase their dependability, gain access to higher level skills and increase their overal flexibility. However it has also led to a loss of control and security, decreased quality, industrial problems, and damage to their rep.
72
what is Technology (strategy)
*Is the equipment available and used by businesses to perform functions in order to produce their goods and services. It becomes the role of the ops manager to constantly scan the business environment to investigate any new or innovative technologies that could benefit the business in terms of reduced costs and greater efficiency. *
**Leading edge-**
technology that is the most dvanced or innovative at any point in time
**Established-**
technology that has been developed and widely used, being simply accepted without question (reliable and tested)
73
Case study for technology (strategy)
Qantas relies heavily on technology to maintain their competitive advantage in the airline insutry. They use both leading ege and established technologies.
- They use fuel analysitcs to reduce fuel consumption through leading edge technology
74
What is inventory management
*refers to the amount of raw materials, wor-in progress and finished goods that a business has or has at any particular point in time*
Adv
- able to better meet consumer d
- reduces lead times
- stock is an asset on th ebalance sheet and adds value to the business
disadv
- high costs associated with holding stock such as storage and handling expenses
- invested capital, labour and energy could be used elsewhere
**JIT (just in time)**
- enables a business to order as required, or in line with demand
- requires a dependable and efficient supply chain
- can be used in *conjuction* with FIFO and LIFO
**LIFO (last in first out)**
- most recent stock is used first
- used mainly for non-perishable goods
**FIFO (first in first out)**
- milk?
75
inventory management case study
Eg Apple will try and sell the new iPhone over the old ones
Eg Coles selling milk – they sell the stock that came in first sooner
76
What is quality management
*Quality management refers to the processes that a business undertakes to ensure consistency, reliability, safety, and fitness of purpose of products*
**Quality control (reactive approach)**
- involves the use of inspections at various touchpoints in the production process to check for any problems, error and defets. Businesses have defines standards and parameters of quality they must meet
**Quality assurance (proactive approach)**
- involves a system to ensure set standards are achieved in production.
- a series of measurements and assessments against pre-determined standards to ensure they meet the minimum requirement.
- A widley used international standard of quality is the ISO 9000 series of quality certifications
**Total Quality Improvement (holistic approach)**
- taking corrective actions continuously
77
Quality management case study
Improvement: Qantas encourage all staff to participate and provide suggestions regarding quality within the business in attempt to make quality a central and strategic element within the business.
78
What is resistance to change
Resistance to change arises from 2 principle sourches withina business; Financial and non Financial (psychological)
1. **Financial**
○ Purchase new equipment (increased costs)
○ Retraining
○ Time (time is money)
○ Re-organisation of plant layout
○ Redundancy payments (costs)
2. **Non-Financial**
○ Inertia - feeling of uncertainty as well as a fear of the unknown that occurs when change manifests within the business and causes people to resist.
79
case study on resistence to change
implementing staff reductions at Qantas has incurred significant redundancy payments totalled $48mil in 2017
80
ways to overcome change
Ways to overcome change
- sustainable and/or incremental change (ensuring the business can still operate without the change effecting the operations)
- Communication (ensuring all stakeholders know the "why")
- Involve all stakeholders in decision making process (in the discussion of it)
- Change agents ⟶ a specialist in the field of managing change.
- Create a culture of change (to ensure people are comfortable with change
- Unfreeze ⟶ change ⟶ refreeze (making the entire change in 1 go)
81
What are Global factors
*Global sourching = *
refers to businesses purchasing supplies or services without being contrained by location. This operations strategy enables businesses to source from low cost economies which presents significant cost advantages due to relaxed labour laws.
**Adv**
- low costs
- access to new tech
- advantage of expertise and labour specialisation
- access to unique reasources (product differentiation)
**Disadv**
- possible realocation of operations
- managing regulatory differences
*Economies of scale =*
- the cost advantages that can be gained by producing on a larger scale, allowing businesses to lower their input costs
*Scanning and learning =*
○ Identifying the trends globally within an industry
○ Identify new technology and processes
○ By observing, enquiring, and obtaining new information to make informed decisions
○ About adopting best practice from global industry/scale
Expanding your reach
*Research and Development =*
○ What can they do to gain a level of innovation
○ Applying what is learnt in the scanning and learning and implementing it
○ Implementing new technology
○ Can access government incentives and grants
- The government wants businesses to be more innovative to achieve a competitive advantage that benefits our economy
82
case study for global factors
Qantas decided to have the maintenence of its new A380 planed conducted in Asia due to the Asian labour rates.
BST - Yr12
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