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1413158971_2014_Business_Studies_Notes.pdf

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Searage Arabi 1 Operations role of operations management ã Strategic role of operations management – cost leadership, good/service differentiation ! Cost leadership: aiming to have lowest costs or to be the most cost price competitive in the market. Although trading with the lowest costs, the overall business should still be profitable. o EOS & cost management: cost advantages that can be create as a result of increase in scale bus operations ! Goods/service differentiation o
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  Searage Arabi 1 Operations role of operations management ã   Strategic role of operations management – cost leadership, good/service differentiation !   Cost leadership: aiming to have lowest costs or to be the most cost price competitive in the market. Although trading with the lowest costs, the overall business should still be  profitable. o   EOS & cost management: cost advantages that can be create as a result of increase in scale bus operations !   Goods/service differentiation o   Product differentiation: distinguishing products (goods/services) in some way of its competitors Product differentiation: Goods -   Varying the actual product features -   Varying product quality : (High/low quality) -   Varying any augmented features:  adds on/additional benefits associated with good Product differentiation: services -   Varying the amount of time spent on a service -   Varying the level of expertise brought to a service -   Varying the qualifications & experience of service -   Varying quality of materials/technology ã   goods and/or services in different industries !   Goods in different industries -   Standardized goods: mass produced. Uniform in quality and meet predetermined level of quality -   Customized goods: varied accordingly to the needs of customers. -   Perishable goods: have short life span, inexpensive& brought on relative basis (e.g.: fruits and vegetables: -    Non-perishable goods: More durable than perishable goods (e.g.: motor vehicles, electoral appliance, clothing etc.) !   Services in diff industries -   Can be both customized and standardized -   Customized: legal, medical, accounting services -   Standardized: Visiting a GP -   Self – service: encouraging customer tot take initiative to help themselves  Searage Arabi 2 ã   Interdependence with other key business functions The Four Main Business Functions  Incorporating:  Operations: -   Manufacturing -   Provision of services -   Other value adding -   Domestic/global  Marketing : -   Sales and advertising -   Product design -   Marketing strategies Finance: -   Administration -   Fin’l management & planning -   Mgmt. and planning  HR: -   Industrial relations (IR) -   HRM -   Personnel influences ã   globalization, technology, quality expectations, cost-based competition, government    policies, legal regulation, environmental sustainability !   Globalisation: Removal of barriers of trade between nations. -   Provides a source of market opportunities -   Large B increasingly orienting practices towards global market, meeting needs of consumers -   Use of manufacturing plants for production of goods – B can achieve massive EOS of scale advantages   Supply chain: range of suppliers a B has & the nature of its relationship with those relationship   Global web: network of suppliers a B has chosen on basis of lowest cost & risk and maximum certainty in quality & timing of supplies   Imitation & innovation: o    Reverse engineering  : process involving a B taking the product of competitor that has already been released into the market. -    product taken apart to see how it’s made -   imitating B tries to make their own version of product from component parts, using diff materials at lower cost o    Innovation : when B creates new products, in doing so leading the market -   Affects O processes by differentiating products, meaning supply chain needed to be shaped around need for innovation  Searage Arabi 3 !   Technology: Design, construction & application of innovative devices, methods & machinery upon O processes -   Enable people to communicate more easily & enable improved processes. -   Used in manufacturing, logistics & distribution, aspects of inventory management, SCM etc. !   Quality Expectations:   Quality: Reference to how well designed, made & functional goods are, and degree of competence with which services organized & delivered -   People have inherent belief in what quality standards should be for products Quality expectations with goods : -   Quality of design:  materials used, how well concept has been developed etc.    -    Fitness for purpose  -    Durability : how reliable, warranty, repair & maintenance  Quality expectations with services: -    Professionalism of service provider, perceived through:  cleanliness & layout of physical facilities    -    Reliability of service-provider  : how well particular needs of customer are fulfilled by service -    Level of customisation  !   Cost - based competition: determining break-even point & then applying strategies to create cost - advantages over competitors -   Recognizes prices cannot keep increasing  -   Cost divided into fixed & variable: -    Fixed  : Costs that don't change regardless of B activity -   Variable : Vary in direct relationship to the level of B activity !   Government policies -   Government policies continually change over time -   E.g.: Carbon pricing: term used for putting price on carbon -   Policies such as WH&S, employment relations, environmental policies, etc. all impact on B O's. !   Legal Regulation -   Compliance: Range of laws that a B must comply to o   Compliance costs: Expenses associated with meeting requirements of legal regulation (abiding by all laws) -   Laws relating to O management:  Searage Arabi 4 o   WH&S: Employees given training, protective equipment o   Training & Development o   Fair work & anti-discrimination laws: Employees treated with respect o   Environmental protection: Minimizing pollution o   Apply rules related to public health !   Environmental Sustainability: B O's should be shaped around practices that use recourses today without compromising access to those recourses for future generations -   O management function significantly affected by rise of climate change & need to integrate long term sustainable view -    Needing to reduce carbon footprint ã   corporate social responsibility !   CSR: Accountable B actions based on respect for community, people & environment, B doing more than complying with laws  –    the difference between legal compliance and ethical responsibility   Legal compliance: B follow law   Ethical responsibility: B meeting all legal obligations & taking it further   Complying with laws cost $$, to go further, even more expensive Legal Compliance in B -    Labour law compliance : minimum wage, working hrs., breaks -    Environmental compliance : regulations stopping dumping, pollution -    B licensing  : those requiring partic. level of training -   Taxation : Levies/taxed imposed on profits -    Migration & rules on offshore skilled labour:  Ensure minimum standards applied -    Intellectual property : Copyrights, trademarks -    Human rights:  Restricting discrimination -    Fin’l regulations:  Fiduciary – Position of fin’l trust with respect to others money   One way B can reduce compliance costs – use of outsourcing to other countries   Onshore/Offshore outsourcing   Compliance diff in other countries (lower tax, lower standards of labour)   Raises ethical issues with B behavior (e.g.: sweatshop conditions, increasing  pressure to ensure employees who have low wage are NOT exploited) Ethical Responsibility -   With laws differing in countries, hard to know how to be ethical -   B may follow to choose ILO – International Labour Org. -   Promotes rights at work, encourage employment opportunities -   Creates provisions for safe working conditions etc. -   If 2/3 nations agree to recommendation, becomes IL standard

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Jul 23, 2017
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