Operations

OPERATIONS* Business*Studies*Topic*One* Sahil&Bhandula& &

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BUSINESS*STUDIES*HSC*DESTRUCTION*(OPERATIONS)* *

Role*of*Operations*Management*

& Operations&refer&to&the&business&processes&that&involve&transformation,&or&more&generally&production.&  In&manufacturing,&operations&refers&to&the&processes&involved&in&turning&raw&materials&and& resources&into&outputs&of&finished&goods&or&products.&  In&services.sector,&operations&refer&to&the&processes&involved&in&actually&carrying&out&the& service.& & & Example.of.manufacturing.operations:.. Example.of.service.sector.operations:.. & A&vehicle&manufacturer&turning&steel& The&provision&of&professional&advice&by&a& & into&cars&or&an&oil&refiner&converting& solicitor&and&the&washing,&cutting&and& & crude&oil&into&petrol&or¶ffin&for& styling&of&hair&by&a&hairdresser.& & candle&making.& & & Operations&involve:&  The&production&of&goods&and&services&  Production&controls&and&associated&quality&controls&on&processes&  Inventory&control&(monitoring&stock&levels)&  Supply&chain&management&(organising&who&supplies&your&raw&materials)&  Logistics&and&distribution&(delivery&of&products,&or&retail&set&up)&  Management&decision&making&in&terms&of&operational&processes& & Inputs&and&Outputs:& Business&inputs&include&tangible&things&such&as&raw&materials,&land,&labour&resources,&capital&in&the& form&of&machinery&and&technology,&as&well&as&intangible&inputs&such&as&ideas&and&information.& & Business&outputs&include&the&products&(goods&and&services)&made&for&the&processes&of&transformation& –&that&is,&operations.& & Strategic*Role*of*Operations* ‘Strategic’&means&the&longIterm&planning&performed&by&senior&managers&–&and&the&strategic&goals&are& to&improve&productivity,&efficiency&and&quality&of&outputs.&The&following&are&the&strategic&roles&of& operations&which&management&may&implement:& & Cost&Leadership:&involves&aiming&to&have&the&lowest&costs&or&to&be&the&most&price&competitive&in&the& market.&A&key&aspect&to&cost&leadership&is&that&although&trading&with&the&lower&cost,&the&overall& business&should&still&be&profitable.&This&means&that&operations&managers&must&find&ways&to&minimize& costs.& & Economies&of&scale:&refers&to&cost&advantages&that&can&be&created&because&of&an&increase&in&scale&of& business&operations.&Typically&the&cost&savings&from&being&able&to&purchase&lower&cost&per&unit&of& input&and&efficiencies&created&from&the&improved&use&of&technology&and&machinery.& & Product&Differentiation:&refers&to&distinguishing&products&in&some&way&from&its&competitors& & Product&Differentiation:&Goods&–&varying&the&actual&product&features;&varying&product&quality& and&varying&any&augmented&features& & Product&Differentiation:&Services&–&varying&the&amount&of&time&spent&on&a&service;&varying&the& level&of&expertise&brought&to&a&service;&varying&the&qualifications&and&the&experience&of&a& service&provider&and&varying&the&quality&of&materials/technology&used&in&service&delivery&

& Cross&Branding:&For&both&goods&and&services,&differentiation&can&be&created&from&crossI& branding&or&strategic&alliances.&This&approach&adds&value&to&products&by&offering&consumers& added&benefits&from&a&crossIbranding&arrangement.& & Goods*and/or*Services*in*Different*Industries* Operations&decisions&will&vary&for&goods&depending&on&whether&they&are&standardised&goods&or& customised&goods.& & Standardised&Goods:&are&those&that&are&massIproduced,&usually&on&an&assembly&line.&Standardised& goods&are&uniform&in&quality&and&meet&a&predetermined&level&of&quality.&E.g.&Toyota&produce& standardized&cars&for&the&customers&to&buy&outright&with&no&personal&changes.& & Customised&Goods:&are&those&that&are&varied&according&to&the&needs&of&customers.&These&goods&are& produced&with&a&market&focus&rather&than&a&production&focus.&E.g.&customized&furniture&is&possible& where&you&can&choose&what&colour,&what&cover&material&to&use&and&the&cushion&selection.& & Interdependence*with*Other*Key*Business*Functions* * The&operations&department&brings&together&the&materials&and&the&activities&needed&for&the&production& of&goods&and&services&to&meet&consumer&demand.&It&also&shares&ideas&across&the&business&about&how&to& improve&processes&or&achieve&cost&savings&to&bring&about&best&practice.&The&operations&manager&will& liaise&with&the&other&department&in&the&following&ways:& &  Discuss&staffing&and&training&and&development&needs&with&the&Human&Resources& department/manager.&  Discuss&financing&requirements&with&the&Accounting&and&Finance&department/manager.&  Discuss&product&design&with&the&Marketing&department/manager.& & Therefore,&it&can&be&seen&that&the&Operations&department&carries&out&a&coordinating&role&in&the& business&to&ensure&that&the&prime&function&(main&activity)&of&the&business&is&carried&out&efficiently&and& effectively&so&that&consumer&demand&is&met.&In&this&way&the&business&will&be&profitable.& * * * * * * * * * * * * * * * * * *

* * *

Influences*on*Operations* & & *

Globalisation&

Corporate&Social& Responsibility&

Environmentally& Sustainablity&

Technology&

InVluences&

Quality& Expectations&

Government& Policies&

Legal&Regulations&

CostIBased& Competition&

Globalisation* Globalisation&refers&to&the&removal&of&barriers&of&trade&between&nations.&Two&key&features&of& globalisation&include:&  Increasing&integration&between&national&economies&&  High°ree&of&transfer&of&capital,&labour,&intellectual&capital&and&ideas,&financial&resources&and& technology& & What.influence.does.globalisation.have.on.operations.management?. Globalisation&is&a&very&significant&influence&on&operations&management.&Large&businesses&are& increasingly&orienting&what&they&produce&and&how&they&produce,&towards&the&global&market,&with&a& view&to&meeting&the&needs&of&global&consumers.& & The&supply*chain&refers&to&the&range&of&suppliers&a&business&has&and&the&nature&of&its&relationship& with&those&suppliers.&For&large&global&businesses&the&integration&of&the&range&of&suppliers&creates&a& network&sometimes&called&the&global*web.& & Global*web*refers*to*the*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.& & The&global&web&strategy&is&one&in&which&the&business&aims&to&minimise&cost&across&the&range&of&its& suppliers.&Thus,&a&business&will&opt&for&a&location&that&places&it&in&appropriate&proximity&to&the& suppliers.&If&a&high&proportion&of&the&suppliers&are&in&one&particular®ion,&this&may&decide&the& location&of&the&main&operational&processes.& * * * * *

Technology* Technology&is&defined&as&the&design,&construction&and/or&application&of&innovative&devices,&methods& and&machinery&upon&operations&processes.& &  Technology&developments&strongly&influence&operations&and&production&management&  New&technologies&in&production&and&operations&have&redesigned&and&reduced&the&need&for& energy&and&raw&materials,&and&result&in&less&waste&and&faster&production& &

‘NEW&TECHNOLOGIES’&REFER&TO:& &

& & & &

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Computer*Aided*Design*(CAD)&is& software&that&allows&engineers&to& design&and&change&products.&CAD&is&the& use&of&computer&systems&to&assist&in& the&creation,&modification,&analysis,&or& optimization&of&a&design.&

Computer*Aided*Manufacture*(CAM)& is&software&that&allows&engineers&to& design&and&change&products.&CAM&is& the&use&of&computer&software&to& control&machine&tools&and&related& machinery&in&the&manufacturing&of& work&pieces.&

& * * * * * * * *

* Quality*Expectations* Quality&is&understood&to&be&a&specific&reference&to&how&well&designed,&made&and&functional&goods&are,& and&the°ree&of&competence&with&which&services&are&organised&and&delivered.&A&business&that&falls& short&of&the&customer&expectations&will&suffer&a&longIterm&damage&to&its&goodwill&and&reputation&in& the&market.&& & Quality*Expectations*with*Goods* Quality&of&design& Fitness&for&purpose& Durability& & & & & & & & & & & & & & & & & & *

Quality*Expectations*with*Services* Professionalism&of&the&service&provider& Reliability&of&the&service&provider& Level&of&customisation&

Government*Policies& Since&policies&can&inform&lawImaking,&and&also&lead&to&business&opportunities,&operations&managers& need&to&be&fully&aware&of&the&contemporary&government&policies&and&what&they&compromise.&Policies& below&all&impact&on&business&operations&in&terms&of&costs&and&opportunities:&  Taxation&rates&  Required&materials&handling&practices& EXAMPLES*OF*GOVT.*REGULATION*  OH&S&standards& Workplace&Health&and&Safety&Act&  Training&and&rules& &  Public&health&Policies& AntiIDiscrimination&Act&  Environmental&Policies& &  Employment&relations& Fairwork&Act&  Trade&and&industry&policies& & & & CostOBased*Competition* The&business&can&reduce&its&prices&lower&than&its&rivals.&Sales&and&market&share&should&increase&as& well&as&profit.&This&influence&may&force&a&business&to&seek&its&own&cost&advantages&through&sourcing& cheaper&inputs,&updating&technology&or&outsourcing.& & Legal*Regulation* Compliance&costs&are&the&expenses&associated&with& meeting&the&requirements&of&legal®ulations.&The&range& Achieve& economies&of& of&laws&with&which&a&business&must&comply&are& scale& collectively&termed&compliance.&The&relevant&laws:& & Use&automated& production& Bulk&buy&inputs& IWHS&in&the&use&of&machinery&and&in&interacting&with&the& systems& business&environment& & BUSINESSES& THAT& ITraining&and&development&in&the&use&of&technology& REDUCE& COSTS& & IFair&work&and&antiIdiscrimination&laws&& Produce&high& & Eliminate&waste& volume&output& IEnvironmental&protection&in&the&use&of&minimising& pollution,&etc& Standardised& & products&for&large& markets& IPublic&health&laws& & & & Environmental*Sustainability* Environmental&sustainability&refers&to&the&development&and&use&of&methods&of&production&that&allow& resources&to&be&used&by&producers&today&without&limiting&the&ability&of&future&generations&to&satisfy& their&needs&and&wants.&Managers&have&a&responsibility&to&protect&the&natural&environment&and&ensure& that&their&methods&of&production&incorporate&sustainable&resource&use.& & Corporate*Social*Responsibility*(CSR)* CSR&refers&to&open&and&accountable&business&actions&based&on&respect&for&people,&community/society& and&the&broader&environment.&It&involves&business&doing&more&than&just&complying&with&the&laws&and& regulations.& Crucial&to&the&concept&of&CSR&is&the&idea&of&the&triple*bottom*line.&Business&try&to&achieve&all&three& aspects&of&the&triple&bottom&line&including:& &  Profit&  Social&Justice&  Environmental&protection&

& What*is*the*difference*between*legal*compliance*and*ethical*responsibility?* Legal&compliance&is&the&requirements&that&a&business&follows&the&letter&of&the&law&–&the&prescribed& standards&of&behaviour.& & Ethical&responsibility&sees&businesses&meeting&all&of&their&legal&obligations&and&taking&it&further&by& following&the&intention&and&‘spirit’&of&the&law.& & Legal&compliances&include:&  Labour&law&compliance&(minimum&wages,&awards&etc.)&  Environmental&and&public&health&compliance&(minimum&pollution,&stopping&dumping,&etc.)&  Business&licensing&rules&(certain&level&of&training,&etc.)&  Taxation&(any&levies&and&duties,&etc.)&  Trade&practices&and&fair&market&dealings&  Migration&and&rules&around&the&use&of&offshore&skilled&labour&  Intellectual&property&  Financial&and&accounting®ulations&and&corporations&law&  Human&rights& & Environmental*Sustainability*and*Social*Responsibility* There&needs&to&be&a&balance&between&economic&concerns&and&environmental&concerns&–& environmental*sustainability.&Businesses&are&being&asked&to&take&increasing&responsibility&for&the& protection&of&the&environment.&Due&to&this,&businesses&have&adopted&policies&of&conservation,& recycling&and&restoration.& & Social*responsibility&is&good&business&–&customers&eventually&find&out&which&businesses&are&acting& responsibly&and&which&are¬.&Customers&can&react&and&stop&buying&a&business’s&product&if&they&learn& that&the&business&is&exploiting&employees,&accepting&bribes&or&polluting&the&environment.&At&the&same& time,&customers&will&reward&socially&responsible&businesses&by&purchasing&more&of&their&products.& & & & & & & & & & & & & & & & & & & & & &

* * *

Operations*Processes*–*Inputs* &

Inputs&are&the&resources&used&in&the&transformation&(production)&process.&Some&inputs&are&already& owned&by&the&business,&while&others&come&from&suppliers.& & &

& & & & & & & & & & & & & & &

TRANSFORMING* RESOURCES**

Inputs&

Human&resources&(labour)&& Facilities& * TRANSFORMED*RESOURCES** Materials&& Information&& Customers& &

TRANSFORMED&RESOURCES&

Transformed&resources&are&those&inputs&that&are&changed&or&converted&in&the&operations&process;&they& are&transformed&by&the&operations&process.& * Materials:&Materials&are&the&basic&elements&used&In&the&production&process&and&consists&of&two&types:& raw.materials&and&intermediate.goods.& & Information:&Information&is&the&knowledge&gained&from&research,&investigation&and&instruction,& which&results&in&an&increase&in&understanding.&Information&acts&as&a&transformed&resource&when&it&is& used&to&inform&how&inputs&are&used,&where&they&are&drawn&from,&which&suppliers&and&supplies&are& available,&and&so&on.&  External.information&is&information&that&comes&from&market&reports.&Stats&and&industry&bodies,& etc.&  Internal.information&comes&from&within&the&business&and&is&gathered&from&internal&sources& such&as&financial&reports,&quality&reports,&and&internal&key&performance&indicators&(KPI’s)&such& as&lead×,&etc.& & Customers:&Customers&become&transformed&resources&when&their&choices&shape&inputs.&The& customer&acts&as&an&input&and&their&desires&and&preferences&act&as&a&transformed&resource.& &

TRANSFORMING&RESOURCES&

The&other&collection&of&inputs&to&any&operations&processes&is&transforming&resources&that&are&those& inputs&that&carry&out&the&transformation&process.&They&enable&the&change&and&value&adding&to&occur.& & Human*Resources:&Staff&that&is&well&qualified,&hard&working&and&disciplined&can&bring&great& productivity&and&efficiency&to&business&operations.&The&effectiveness&with&which&human&resources& carry&out&their&work&duties&and&responsibilities&can&determine&the&success&with&which&transformation& and&value&adding&occurs& & Facilities:&Facilities&refer&to&the&plant&(factory&or&office)&and&machinery&used&in&the&operations& processes.&Major&decisions&include&the&design&layout&of&the&facilities,&the&number&of&facilities&to&be& used,&their&location&and&their&capacity.&

Operations*Processes*–*Transformation*Processes&

& The&main&concept&of&operations&processes&is&transformation,&which&is&the&conversion&of&inputs& (resources)&into&outputs&(goods&or&services).&The&operations&process&of&a&manufacturer&tends&to&be& highly&automated&or&mechanised.&  Manufacturers&use&machinery,&robots&and&computers&to&convert&inputs&into&outputs&  Service&providers&rely&heavily&on&interaction&with&the&customer& ELEMENTS*OF*THE*TRANSFORMATION*PROCESS:* o The&influence&of&volume,&variety,&variation&in&demand&and&visibility&(customer&contact)& o Sequencing&and&scheduling&–&Gantt&charts,&critical&path&analysis& o Technology,&Task&design&and&Process&layout& o Monitoring,&Control&and&Improvement& &

THE&4&V’S&INFLUENCES& InVluences&on&the& Transformation& Processes&

Volume&

Variety&

Variation&

Visibility&

Depending&on&which&of&the&4V’sis&considered&the&most&important&to&the&business,&this&will&affect&the& type&of&production&method&used.& &

Types&of&Production&

Job:&Producing&a&single& unique&item;&suits&those& products&and&services& that&require&more&than&a& standard&product& * *

Batch:&Producing&a&small& number&of&the&same&item;& using&the&same&process& and&produced&in&batches& of&50I200&

Flow:&Producing&a&large& number&of&items&at&the& same&time;&Products&tend& to&have&little&variation&

The*Influence*of*Volume& Volume&refers&to&how&much&of&a&product&is&made.&A&business&using&mass&production&will&produce&a& high&volume&with&a&high°ree&of&process&repetition.&A&low&volume&business&will&use&a&production& process&that&allows&lots&of&stoppages&and&adjustments.&  High&volume&=&large&amount&of&capital,&facilities,&technology&and&materials&  Low&volume&=&focus&more&on&multiIskilled&labour& & Volume*flexibility&refers&to&how&quickly&the&transformation&process&can&adjust&to&increases&or& decreases&in&demand.&The&responsiveness&to&the&required&changes&in&volume&is&essential&to&effectively& managing&lead×.&LeadOtime&is&the&time&it&takes&for&an&order&to&be&fulfilled&from&the&moment&it&is& made.&If&businesses&cannot&quickly&adjust&to&changes&in&market&demand,&it&can&over&produce,&which& will&lead&to&wastage&and&an&increase&in&inventory&costs.&Alternatively,&if&back&orders&cannot&be&quickly& fulfilled,&it&can&lead&to&lost&sales.& & The*Influence*of*Variety* Variety&refers&to&the&number&of&different&models&and&variations&offered&in&the&products&or&services.&&If& the&business&has&customers&with&different&needs,&goods&and&services&will&have&to&be&modified&or&a& wide&variety&of&models&and&options&will&be&provided.&& & Mix*flexibility&is&known&by&consumers&as&product&range&or&variety&of&choice.& & The*Influence*of*Variation* Where&demand&for&the&product&or&service&fluctuates&during&the&year,&variations&in&labour&inputs&may& be&needed.&Variation&can&change&according&to&time&of&day,&season,&holidays&and&time&of&year.& & An.increase.in.demand&will&require&increased&inputs&from&suppliers,&increased&inputs&from&suppliers,& increased&human&resources,&increased&energy&use&and&increased&use&of&machinery&and&technology.& & A.decrease.in.demand&will&also&require&operational&flexibility&as&staff&may&need&to&have&their&hours& reduced,&production&may&need&to&slow&to&avoid&inventory&build&up&and&suppliers&may&put&on&pressure& due&to&contractual&agreements.& & The*Influence*of*Visibility* Operations&will&also&be&influenced&by&the°ree&to&which&customers&can&see&the&operations&in&action.& Service&based&businesses&(e.g.&school)&will&have&a&high&level&of&visibility,&while&customers&will&rarely& see&the&operations&process&of&a&manufacturing&based&business.&If&a&business&is&of&high&visibility,&the& quality&of&labour&must&be&at&an&adequate&level&so&that&the&solid&customer&base&is&maintained.& &

SEQUENCING&AND&SCHEDULING& & Scheduling&and&sequencing&tools&are&used&to&identify&all&steps&in&the&operations&process&and&organise& them&into&the&most&efficient&order&to&complete.& * Sequencing&refers&to&the&order&in&which&activities&in&the&operations&process&occur.& & Scheduling&refers&to&the&length&of&time&activities&take&within&the&operations&process.&The&two&main& scheduling&tools&are:&  Gantt&Charts&  Critical&Path&Analysis&(CPA)& & TASK&ANALYSIS&IS&THE&BREAKDOWN&OF&EXACTLY&HOW&THE&MANUFACTURE&OF&A&GOOD&OR& ACTIVITIES&TO&PROVIDE&A&SERVICE&IS&TO&BE&ACCOMPLISHED.& & &

Gantt*Charts:&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.&There&are&two&main& advantages&of&using&Gantt&charts:&  Firstly,&they&force&a&manager&to&plan&the&steps&needed&to&complete&a&task&and&to&specify&the& time&required&for&each&task.&  Secondly,&they&make&it&easy&to&monitor&actual&progress&against&planned&activities.& & & & & & & & & & & & & & & & & & & & & & & & Critical*Path*Analysis*(CPA):&The&CPA&is&a&scheduling&method&or&technique&that&shows&what&task& needs&to&be&done,&how&long&they&take&and&what&order&is&necessary&to&complete&those&tasks.&The&critical& path&is&the&shortest&length&of&time&it&takes&to&complete&all&tasks&necessary&to&complete&the&process&or& project.& & &

& & & &

TECHNOLOGY,&TASK&DESIGN&AND&PROCESS&LAYOUT&

& Technology* Every&business&uses&some&form&of&technology&to&transform&its&inputs&into&outputs.&& * Why*use*technology*in*operations*processes*of*a*business?*  Technology&can&improve&the&competitiveness&of&operations&by&giving&it&more&flexibility&as&it& allows&the&business&to&respond&to&changes&in&the&market&more&easily.&  The&business&can&change&volumes&to&meet&a&sudden&increase&in&demand&or&produce&different& variations&of&products&to&satisfy&changing&consumer&demands&and&produce&nonIstandardised& versions&of&its&standard&product&to&satisfy&individual&clients.&This&is&to&improve&to&productivity,& less&waste&and&more&efficient&use&of&time.& & Business&technology&involves&the&use&of&machinery&and&systems&that&enable&business&to&undertake&the& transformation&process&more&effectively&and&efficiently&Business&technology&items&that&are& commonplace&today&includes:&  Computer&  Keyboard&  CD&ROM,&USB&  Modem&  Mobile/telephones&etc.& & Manufacturing&technology&can&be&used&to&speed&up&(shorten)&processes&and&enable&fuller&utilisation&of& raw&materials.&This&makes&the&operations&processes&more&cost&effective.&Key&manufacturing& technologies&include:&  Robotics&  ComputerIaided&design&(CAD)&  ComputerIaided&manufacturing&(CAM)& & In&the&services§or,&office&and&communications&technology&have&enabled&whole&markets&to&open&up& and&allow&for&a&small&to&medium&business&to&trade&globally.& & Task*Design&(Deciding&how&a&task&will&be&completed)& Task&design&involves&classifying&job&activities&in&ways&that&make&it&easy&for&an&employee&to& successfully&perform&and&complete&the&task.&Each&individual&task&is&analysed&and&broken&down&into& separate&steps&and&allocated&to&machines&and&employees&with&the&appropriate&skills,&knowledge&and& capabilities.& & Plant*(Factory/Office)*Layout* Plant&layout&refers&to&the&plan&of&the&physical&layout&of&the&business’s&factory&or&office&and&is&the& arrangement&of&equipment,&machinery&and&staff&within&the&facility,&which&obviously,&has&an&impact&on& the&efficiency&of&the&operations&function.& & Types&of&factory&layouts:& & * & & & & & & & &

PROCESS&LAYOUT&

PRODUCT&LAYOUT&

FIXED&POSITION&LAYOUT&

& Process&Layout:& The&process&layout&is&the&arrangement&of&machines&such&that&the&machines&and&equipment&are& grouped&together&by&the&function&they&perform.&& & Product&Layout:& Product&production&is&characterised&by&the&manufacturing&of&a&high&volume&of&constant&quality&goods.& An&assembly&line&is&the&most&common&layout&for&this&type&of&production.&This&type&of&layout&is&referred& to&as&product&layout.& & Fixed&Position&Layout:& Project&production&deals&with&layout&requirements&for&largeIscale,&bulky&activities&such&as&the& construction&of&bridges,&ships,&aircraft&or&buildings.&A&fixed&position&layout&is&where&a&product&remains& in&one&location&due&to&its&weight&or&bulk.& & Office&Layout:& The&focus&of&an&office&layout&is&to&enable&the&work&to&be&performed&efficiently&in&a&safe&office& environment.& &

MONITORING,&CONTROLLING&AND&IMPROVEMENT& & & & & & & & & & & & BUSINESS&SUCCESS& & Monitoring&

Controlling&

Improvement&

& &

& &

 The&purpose&of&monitoring&and&control&is&to&ensure&the&operations&process&runs&efficiently&and& effectively,&producing&the&goods&and&services&it&was&designed&to&do.&  Monitoring&is&the&process&of&measuring&actual&performance&against&planned&performance.& &  Control&occurs&when&KPIs&are&assessed&against&predetermined&targets&and&corrective&action&is& taken&if&required.&  Improvement&refers&to&the&reduction&of&inefficiencies&and&wastage,&poor&work&processes&and& the&elimination&of&any&bottlenecks.&  Improvement&through:& o Quality& o Speed& o Dependability& o Flexibility& o Cost&improvements&

Operations*Processes*–*Outputs*

* Outputs*are&the&final&goods&or&services&that&are&delivered&or&provided&to&the&consumer.&* &

OUTPUTS&FROM&DIFFERENT&INDUSTRIES& & Banking&

& Financial&services&such&as&home&loans&and&investment&advice,&security&for& savings.&

Education&

& Socially&responsible&young&adults&with&knowledge&and&skills&to&learn,&adapt,& work&and&related&abilities.&

&

&

& Construction&

Buildings,&homes,&roads&that&meet&the&specifications&of&architects,&designers& and&engineers&

Customer*Service** Customer&service&refers&to&how&well&a&business&meets&and&exceeds&the&expectations&of&customers&in&all& aspects&of&its&operations.& &  For&manufactured.goods,&customer&service&is&provided&through&replacing&the&good&if&it&is&faulty,& providing&education&on&its&use,&repairing&the&good&if&it&is¬&working&properly&and&maintaining& and&servicing&it.&  In&the&service.industries,&where&the&service&is&often&provided&and&consumed&at&the&same&time,& customer&service&will&reflect&more&how&the&service&is&customised&and&provided.& & Warranties* Warranties&are&businesses’&promises&to&correct&any&defects&in&their&products&or&in&the&services&they& deliver.& & Fair.Trading.Act.1987.(NSW)&and&Competition.and.Consumer.Act.2010.(Cth).require&businesses&to& ensure&that&the&goods&they&sell:& &  Have&a&level&of&quality&that&is&comparable&to&the&price&and&product&description&  Are&suitable&for&the&purpose&or&job&they&will&be&used&for&  Match&the&product&description&in&any&advertising&or&promotion&  Are&free&from&defects&or&faults& & Operations&managers&need&to&trace&the&source&of&the&fault&in&manufacturing&and&solve&it.&In&this&way,& the&warranty&claims&lead&the&business&to&improve&transformation&processes.& & & & & & & & & & &

*

Operations*Strategies& &

Performance& objectives& New&product& or&service& design&and& development&

Global& factors&

Overcoming& resistance&to& change&

Supply&chain& management&

Operations& Strategies&

Quality& management&

Outsourcing&

Inventory& management&

& & &

Technology&

PERFORMANCE&OBJECTIVES&

Performance&objectives&are&goals&that&relate&to&particular&aspects&of&the&transformation&processes.&The& six&main&performance&objectives&that&can&be&allocated&to&particular&key&performance&indicators&(KPIs)& are:&

Quality&

Speed&

Dependability&

Customisation&

Cost&

Flexibility&

Quality& As&a&performance&objective,&consumer&expectations,&which&are&used&to&inform&the&production& standards&applied&by&the&business&often&determines&quality.&Quality&performance&objectives&include:& &  Quality*of*design:&arises&from&an&understanding&of&consumers&and&their&preferences&–&also& includes&how&well&a&product&is&made&or&a&service&is&delivered.&  Quality*of*conformance:*focus&on&how&well&the&product&meets&the&standard&of&a&prescribed& design&with&certain&specifications.&  Quality*of*service:&In&this&sense&quality&refers&to:&how&reliable&the&service&is;&how&well&the&service& meets&the&specific&needs&of&the&client;&how&timely&or&responsive&the&service&delivery&is.&& & Speed* Speed&refers&to&the&time&it&takes&for&the&production&and&the&operations&processes&to&respond&to& changes&in&market&demand.&Speed&aims&to&satisfy&customer&demands&as&quickly&as&possible.&Therefore,& goals&for&speed&include:&  Reduced&wait×&  Shorter&lead×&  Faster&processing×& & Dependability* Dependability&refers&to&how&long&the&products&are&useful&before&they&fail.&One&measure&of& dependability&is&measured&by&warranty&claims.&In&respect&to&services,&dependability&refers&to& consistency&of&service&standards&and&reliability&–&a&measure&for&service&dependability&is&the&number&of& complaints&received.& & Flexibility* Flexibility&refers&to&how&quickly&operations&processes&can&adjust&to&changes&in&the&market.&Flexibility& can&be&best&achieved&by&increasing&the&capacity&of&production.&With&services,&flexibility&can&be& achieved&through&increasing&the&number&of&service&providers.& & Customisation& Customisation&refers&to&creation&of&individualised&products&to&meet&the&specific&needs&of&the& customers.& & Cost* Cost&refers&to&the&minimisation&of&expenses&such&that&operations&processes&are&conducted&as&cheaply& as&possible.&Over&time,&businesses&seek&to&become&more&efficient&and&thus&allocate&costs&better&by&  Acquisition&of&new&technologies;&use&inputs&better&and&minimise&wastage;&reduce& supplier/inventory/distribution&costs.&

&

NEW&PRODUCT&OR&SERVICE&DESIGN&AND&DEVELOPMENT&

A&business&needs&to&design&and&develop&new&products&and&services&–&the&designs,&development,&launch& and&sale&of&new&products&enables&a&business&to&grow&and&to&attain&a&competitive&advantage.& & Product*Design*and*Development* There&are&two&main&approaches&to&product&design&and&development:& &  Consumer*approach*–&the&preferences&and&desires&of&consumers&determine&which&products& are&designed&and&developed.& &  Changes*and*innovations*in*technology&–&they&enable&new&and&appealing&products&to&be& made&because&they&use&advanced&technologies,&which&give&products&greater&functionality.& & The&steps&in&the&product&design&and&development&process:&

Concept& Development&

Cost&BeneVit& Analysis&

Production& Design&

Product& Testing&

& Important&considerations&when&designing&and&developing&a&product&  Quality&is&a&factor&because&the&customers&will&demand&a&particular&quality,&and&certain& attributes&and&features.& &  Supply*chain*management&is&an&important&factor&because&a&new&product&will&draw&suppliers& and&may&extend&the&range&of&supplies&sought,&the&timing&or&the&volume&of&supplies.& &  Capacity*management&is&a&factor&as&a&new&product&may&increase&the&use&or&range&of&present& resources,&or&require&an&investment&in&new&technology&and&machinery.& &  Cost&must&be&considered&as&it&determined&from&the&amount&of&inputs,&time&and&energy&used&in& processing.& & Service*Design*and*Development* Service&design,&being&customised&in&nature,&has&always&taken&the&position&of&the&customer&or&client&as& the&starting&point&in&design.&In&services&design,&both&the&explicit&and&implicit&aspects&need&to&be& addressed.&& &  Explicit*service&is&also&known&as& the&tangible&aspect&of&the&service& being&provided&such&as:&the& application&of&time;&expertise;& skill&and&effort.& &  Implicit*service&is&based&on&a& feeling&and&is&therefore& intangible.&The&implicit&aspects& of&a&service&are&the&psychological& wellbeing&–&the&feeling&of&being& looked&after&–&that&comes&with& the&provision&of&the&service.& &

SUPPLY&CHAIN&MANAGEMENT&

Supplies&are&an&essential&input&into&operations&processes.&Supply*Chain*Management*involves:&  Integrating&and&managing&the&flow&of&supplies&through&the&inputs&  Transformation&processes&(Throughput&and&value&adding)&  Outputs&to&best&meet&the&needs&of&customers& & Throughput:&the&amount&of&material&or&items&passing&through&a&system&or&process& & & & The&supply&chain&includes&all&businesses&directly&linked&to&the&supply&of&goods&or&services&to&the& consumer.&Businesses&need&to&acquire&various&resources&necessary&to&produce&a&good&or&supply&a& service.&Suppliers&need&to&be&found&that&can&provide&the&most&appropriate&inputs&at&the&best&price&and& reliably&supply&the&required& quantity&with&the&appropriate& Transformation& Inputs& Outputs& quality.& Process& & The&key&aspects&to&supply&chain& • Sourcing&& • Throughput& • Finished&or& management&are:& semiIVinished& • EIcommerce& • Value&adding&  Sourcing& goods&or& • Raw&Materials&  EIcommerce& services& • Other&inputs&  Logistics&and& • Logistics& Distribution& (energy)& • Distribution& & & Sourcing* Also&called&‘procurement’&or&‘purchasing’,&sourcing&refers&to&the&purchasing&of&inputs&for&the& transformation&process.&& * In&recent&years,&there&have&been&four& particular&trends&in&SCM:& & Supplier.Rationalisation:&involves&a&business& assessing&the&number&and&diversity&of&its& Consumer& suppliers&–&helps&determine&which&suppliers& Demand& are&least&effective&and&which&can&be&better& utilised.& & BackwardsNVertical.Integration:&purchasing& through&mergers&or&acquisitions&of&suppliers.& Factors& As&a&strategy,&this&guarantees&supply&for&the& InVluencing& Quality&of& Cost&of& Inputs& Choice&of& transformation&processes,&as&the&supplier&is& Supplier& Sources/ Required& then&owned&by&the&business.& Suppliers& & Cost.Minimisation:&this&strategy&is&focused&on& cost&minimisation.&As&new&offshore&markets& develop,&there&is&increasing&access&to&lowIcost& resources/inputs& Flexibility&and& Timeliness&of& & Supply& Flexible.or.Responsive.Supply.Chain.Processes:& “lean&processes”&is&relevant&for& manufacturing&businesses.&A&lean& organisation&is&one&that&minimises&waste,& * seeks&to&continually&lower&costs&or&improve& * processes&and&processing&speed.& * &

Global*Sourcing* Global&sourcing&is&a&broad&term&that&refers&to&businesses&purchasing&supplies&or&services&without& being&constrained&by&location.&In&the&supply&chain&management&activity,&global&sourcing&means&buying& or&sourcing&from&wherever&the&suppliers&are&that&best&meet&the&sourcing&requirements.& & Benefits&of&Global&Sourcing:&  Cost&and&expertise&advantage&  Access&to&new&technologies&and&resources& & Challenges&Arising&from&Global&Sourcing:&  Possible&relocation&of&operations&  Increased&cost&of&logistics,&storage&and&distribution&  Managing&different®ulatory&conditions&between&nations&  Increasing&complexity&of&overall&operations&when&sourcing&from&diverse&locations& & EOCommerce* EIcommerce&involves&the&buying&and&selling&of&goods&and&services&via&the&Internet.&& & Business&Sourcing&and&EICommerce& EIprocurement,&or&the&use&of&onIline&systems&to&manage&supply,&allows&suppliers&to&direct&access&to& the&business’s&level&of&supplies.&When&stock&falls&to&a&preIdetermined&point,&the&supplier&will&supply& even&without&a&formal&request&from&the&buyer.&This&process&is&called&businessNtoNbusiness.arrangement. (B2B).& & B2B.=.allowing.the.supplier.to.assess.the.needs.of.the.buyer.and.meet.them.in.a.timely.manner. & EICommerce&and&the&Consumer& The&increasing&use&of&eIcommerce&by&consumers&also&has&an&effect&on&the&supply&chain.&A&business& that&sells&direct&to&consumers&(B2C)&via&the&internet&or&that&allows&other&internetIbased&businesses&to& do&so&clearly&must&be&able&to&manage&supplies&that&are&affected&by&this&diversity&of&ordering&options.& & Benefits(of(E+Commerce( • 24I&hour&advertisement&for&their&products& • Inventory&management&can&be&improved&also&with&eIcommerce&–&it&can&set&up&so&that&an& email&to&a&supplier&is&automatically&generated&when&inventory&levels&are&getting&close&to& buffer&stock&levels&(minimum&stock&business&likes&to&keep&at&a&time)& • Improves&efficiency&in&the&supply&chain&because&the&supplier&receives&the&message&and& can&deliver&more&stock&just&as&the&business&needs&it&for&JIT&inventory&management.& & Logistics* It&is&part&of&the&supply&chain&that&focuses&on&moving&inputs,&resources&and&outputs&through&the&supply& chain&as&quickly&as&possible.&Logistics&is&a&term&broadly&referring&to&distribution&but&also&includes:& • Transportation& • The&use&of&storage,&warehousing&and&distribution¢res& • Materials&handling&and&packaging& . Distribution&refers&to&the&ways&of&getting&the&goods&or&services&to&the&customer.& & Distribution.Centres&are¬&intended&for&long&term&storage&but&they&are&strategically&located&so&as&to& minimise&the&time&it&take&to&supply&stock&to&retail&outlets.& & Transportation&refers&to&the&modes&of&moving&the&goods&either&by&van,&truck,&train,&airplane&or&ship.& & Storage&involves&finding&a&secure&place&to&hold&stock&until&it&is&required.&

OUTSOURCING&

Outsourcing&involves&the&use&of&external&providers&to&perform&noncore&business&activities.&When&an& external&provider&that&specialises&in&a&particular&business&function&performs&a&service,&it&will&do&so&at&a& lower&cost&and&with&a&greater&effectiveness.&These&activities&include:& & & Transport& & & & & &&Security& Supply&Chain&Management& Logistics& Maintenance& Servicing&of&equipment& Producing&components& Supplying&materials& & Advantages*of*Outsourcing* Disadvantages*of*Outsourcing* Simplification& Breakdown&in&the&business&operations& Efficiency&and&cost&savings& Loss&of&control&over&quality,&reliability,&costs& Increased&process&capability& Slower&lead&time&and&response&to&changes&& Increased&accountability& Loss&of&corporate&memory&and&vulnerability& Access&to&skills/resources&lacking&within&business& Issues&with&communication&and&language& Capacity&to&focus&on&core&business&activities& & &

TECHNOLOGY&

Technology&may&be&defined&as&the& design,&construction&and/or&application& of&innovative&devices,&methods&and& machinery&upon&operations&processes.& The&thoughtful&application&of& technology&allows&businesses&to&gain&a& competitive&advantage.& & Leading*Edge*Technology* Leading&edge&technology&is&the& technology&that&is&the&most&advanced&or& innovative&at&any&point&in&time.&Using& leading&edge&technologies&can&help& businesses&to:&  Create&products&more&quickly& and&to&higher&standards&and&with&less&waste&  Operate&operations&process&more&effectively& & Established*Technology* Established&technology&is&the&technology&that&has&been&developed&and&widely&used.&Established& technologies&are&functionally&sound&and&help&to&establish&basic&standards&for&productivity&and&speed.& Examples&of&established&technologies:&  Barcoding&  Robotics&  CAD&  CAM&  ComputerIintegrated&manufacturing&(CIM)&  Flexible&manufacturing&systems&(FMS)& & BOTH&FORMS&OF&TECHNOLOGY&LEAD&TO&AN&EFFICIENT&AND&EFFECTIVE&OPERATIONS&PROCESS&& & & & &

INVENTORY&MANAGEMENT&

Inventory&or&stock&refers&to&the&amount&of&raw&materials,&workIinIprogress&and&finished&goods&that&a& business&has&on&hand&at&any&particular&point&in&time.& & Inventory&management&involves&making&decisions®arding&how&much&stock&to&have&on&hand&at&any& one&time&and&the&most&appropriate&systems&of&storage&and&methods&of&handling.& & Holding&stock&is&also&known&as&justOinOcase*(JIC)&or&buffer*stock&–&where&a&business&holds&a&certain& level&of&stock&as&a&reserve&to&cover&interruptions&to&supply&or&an&unexpected&increase&in&demand.& & Advantages*of*Holding*Stock*  Consumer&demand&can&be&met&when&there&is&stock&available&  Reduces&lead×&between&order&and&delivery&  Stocks&=&immediate&revenue&  Rapid&distribution&and&transportation&of&products&as&indicated&by&demand&  Making&products&in&bulk&=&reduction&in&costs&  No&need&to&rely&on&suppliers&for&prompt&deliveries& & Disadvantages*of*Holding*Stock*  The&costs&involved&including&storage&charges,&spoilage,&insurance,&theft&and&handling&expenses&  Products&may&come&obsolete&–&occurs&if&stock&remains&unsold& & Inventory*Valuation*Methods& ‘Last&in,&first&out’&(LIFO)&means&that&stock&purchased&most&recently&is&sold&first.&This&method&can&be& used&for&goods&that&have&no&useIby&date&such&as&machinery&parts&or&canned&food.& & ‘First&in,&first&out’&(FIFO)&assumes&that&the&first&stock&that&has&been&purchased&is&the&oldest&and&will&be& sold&first.&FIFO&is&more&appropriate&for&perishable& times&such&as&food&and&drink.& & ‘JustIinItime’&(JIT)&inventory&management&is&to&hold&as& minimal&stock&as&possible&and&only&bring&in&stock&from& suppliers&as&required.&Advantages&of&JIT&are:&  Reduced&costs&of&storage&and&securing&stock&  Increases&the&liquidity&of&working&capital&as& less&cash&is&tied&up&as&stock&  Reduces&the&chance&of&stock&becoming&obsolete&  Reduces&the&chance&of&perishable&food&spoiling&  Less&warehouse&space&allows&room&for&more& activities&  Less&time&is&spent&on&checking&products&& & The&disadvantage&is&that&if&a&supplier&experiences&a& problem&and&stock&is¬&delivered&on&time,&the&entire& production&schedule&is&disrupted.& & THE&METHOD&OF&VALUATION&AFFECTS&THE&CALCULATION&OF&THE&VALUE&OF&THE&GOODS&SOLD,& THE&VALUE&OF&THE&UNSOLD&STOCK&AND&THE&GROSS&PROFIT&IIII&SO&STUDY&AND&KNOW&HOW&TO& CALCULATE!& & & & & &

QUALITY&MANAGEMENT&

Quality&management&refers&to&those&processes&that&a&business&undertakes&to&ensure:&  Consistency&  Reliability&  Safety&  Fitness&of&purpose&of&product& & Quality*Control*–&(inspection,.measurement.and.intervention). Quality& Quality&control&reduces&problems&and&defects&in&the&product& Assurance& by&using&inspections&at&various&points&in&the&production& process.&& Quality& Quality&  PreIdetermined&quality&targets&would&be&set&and&any& Control& Improvement& failure&to&meet&the&targets&would&need&to&be&assessed& and&appropriate&action&taken&to&correct&any&issue&that& Approaches& has&caused&quality&standards&to&fall&below&expectation.& to&Achieving& Quality&  Quality&control&management&may&require&that&labour& be&appropriately&trained&to&apply&quality&standards& throughout&working&processes.& & Quality*Assurance*–*International*Quality*Standards* Quality&assurance&involves&the&use&of&a&system&to&ensure&that&set&standards&are&achieved&in& production.&This&is&done&through&taking&a&series&of&measurements&and&assessing&them&against&preI determined&quality&standards.& & Aspects&of&quality&that&are&important&to&QA&include:&  The¬ion&of&‘fitness&for&purpose’&or&how&well&a&product&does&what&it&is&designed&to&do&  The&desire&to&achieve&‘right&first&time’&so&that&products&do¬&need&to&be&reworked,&which& wastes&time,&energy&and&other&resources& & A&widely&used&international&standard&is&the&International&Organisation&for&Standardisation&9000&(ISO& 9000).& & Given&that&the&production&of&components&for&a&manufactured&good&such&as&a&TV&may&come&from& different&suppliers&from&different&countries,&such&standards&are&an&important&quality&control& mechanism&for&‘global’&companies.&This&ensures&that&the&quality&of&the&components&from&one&nation&is& also&equal&to&the&components&of&another&supplier&in&another&nation.& & Quality*Improvement* Quality&improvement&focuses&on&two&aspects:&continuous&improvement&and&total&quality&management.& & Continuous.Improvement:&is&an&ongoing&commitment&to&improving&a&business’s&goods&or&services.&That& is,&all&staff&is&encouraged&to&demonstrate&initiative&and&to&suggest&areas&where&improvements&can&be& made&in&improving&the&quality&of&the&products&being&produced.& & Total.Quality.Management:&this&concept&focuses&on&managing&the&total&business&to&deliver&quality&to& customers.&It&is&an&ongoing,&businessIwide&commitment&to&excellence&that&is&applied&to&every&aspect&of& the&business’s&operation.&To&achieve&TQM&objectives&requires&four&elements:&benchmarking,&employee& empowerment,&a&focus&on&the&customer&and&continuous&improvement.& & & Benchmarking:&evaluate&(something)&by&comparison&with&a&standard& & & & & &

OVERCOMING&RESISTANCE&TO&CHANGE&

All&businesses&are&subject&to&change&from&the&external&environment&such&as:& • Legislative&and®ulatory&changes& • Changes&in&economic&conditions& • Social&changes&over&time& • Technological&breakthroughs& & Changes&can&often&be&resisted&as&occasionally&change&causes&uncertainty&and&uncertainty&can&be& stressful.&Resistance&to&change&arises&from&two&principal&sources&with&a&business:&  Financial&  Psychological/emotional& & Financial*Costs* & Cost&of& purchasing& Purchasing.New.Equipment:&The&purchase&of& new& equipment& equipment&such&as&machinery&and&technology& is&considered&a&capital&cost.&Despite&the&high& costs,&there&can&be&advantages&from&making&the& capital&investment:&  Improved&processing&flexibility&  Improved&processing&speeds& Costs&of& Financial& Cost&of&  More&consistency& structural& redundancies& reorganisation&  Higher&overall&quality& Costs&&  Reduced&wastage&and&losses& & Redundancy.Payout:&Redundancy&is&defined&as& a&loss&of&work&arising&from&job&skills&that&are&no& longer&required&or&relevant&to&the&workplace.& Costs&of& Redundancy&payouts&is&the&money&that&is&given& retraining& employees& to&employees&when&they&are&forced&out&of&work& because&their&job&skills&are&no&longer&relevant.& & Retraining:&This&cost&arises&from&change&that&causes&a&reorganisation&of&the&business’s&internal& hierarchy&or&from&the&acquisition&of&technology.& & Reorganising.Plant.Layout:&There&can&be&high&costs&involved&when&reorganising&plant&layout,&such&as:&  Downtime&when&transferring&from&the&old&machinery&to&the&new&machinery&  Testing&new&equipment,&machinery&and&technology&  Transporting,&placing&and&bringing&power&to&new&plant&  Loss&of&productivity,&arising&from&reIorientation&of&staff&with&new&work&processes&etc.& & Psychological*Costs*  INERTIA&OF&OWNERS,&MANAGERS&AND&EMPLOYEES& Inertia&is&a&tem&that&describes&a&psychological&resistance&to&change.&A&feeling&of&uncertainty&or&fear&of& the&unknown,&when&change&is&about&to&happen&or&pressing,&can&lead&people&to&resist.& & & & * & Forces&driving&change& & & & & & Forces&resisting&change&

Overcoming*Resistance*to*Change* Step&1:&Identifying&the&need&for&change& It&is&important&to&identify&the&need&for&change&–&once&it&has&been&identified,&it&is&necessary&to&develop&a& plan&for&how&to&change&the&change&will&be&achieved.&To&do&so&the.need.for.change.needs.to.be. communicated.to.all.relevant.stakeholders.& & Step&2:&Setting&achievable&goals& A&key&aspect&of&the&plan&will&be&the&setting&of&achievable&objectives.&The&goals&need&to&be&realistic,. measurable.and.achievable.&A&number&of&things&need&to&be&done&in&setting&the&objectives:& &  Preparing&people&for&the&change&and&trying&to&get&acceptance&for&the&need&to&change&from&as& many&staff&as&possible.&This&is&called&‘unfreezing’.&  Including&the&changes&that&will&have&to&take&place&in&people’s&behaviour&and&the&values&they& share&  Include&in&the&objectives,&the&resources&and&support&systems&that&will&be&needed.& E.g.&implementing&a&new&computer&system&will&require¬&just&the&computers&but&continuing& technical&support&while&staff&adjust&to&and&learn&the&new&skills&required&to&operate&the&new&system.& Step&3:&Creating&culture&of&change&(encouraging&teamwork&approach&using&change&agents)& Change&agents&are&the&key&group&of&influential&people&in&a&business&who&much&be&convinced&to&support& the&change&and&who&then&manage&the&change&process&–&change&agents&facilitate&the&change&process&as& they&effectively&lead&and&influence&other&workers&along&the&desired&path&for&change.& & Some&things&to&effectively&target&these&people:&  Convince&them&of&the&need&for&change&  Get&these&people&to&agree&on&the&nature&of&the&changes&that&have&to&happen&  Give&these&people&the&power&to&implement&the&change&effectively& & Step&4:&The&use&of&change&models& (i) ForceIfield&analysis& Refers&to&an&environment&in&which&there&is&continuous&and&unexpected&change.&This&system&has&two& sets&of&forces:&  Driving&forces&–&forces&pushing&for&the&change&  Resisting&forces&–&forces&against&the&change& & FOR&CHANGES&TO&OCCUR,&THE&DRIVING&FORCES&NEED&TO&BE&STRONGER&THAN&THE&RESISTING& FORCES.&THIS&CAN&BE&ACHIEVED&BY&EITHER&ACCEPTING&THE&NEED&FOR&CHANGE&OR&REMOVING& RESISTING&FORCES.& & (ii) Unfreeze/change/refreeze&model& Unfreezing&is&establishing&readiness&for&change.&The&change&has&to&be&made&attractive&that&people& accept&it.& & Change&is&implementing&the&change.&For&the&change&to&be&affective,&employees&will&have&to&adopt&new& values&and&behavioural&patterns.& & Refreezing&is&locking&the&new&behaviour&into&place&by&means&of&supporting&mechanisms&such&as& training&and&incentives&to&ensure&that&employees&do¬&return&to&their&old&ways.& & ADAPTING(TO(CHANGE(THROUGH(OVERCOMING(THE(FINANCIAL(AND(PSYCHOLOGICAL( RESISTANCE(CAN(HELP(BUSINESSES(TO(CREATE(SUSTAINABLE(COMPETITIVE(ADVANTAGE(EVEN( WHEN(FACEDD(WITH(WHAT(APPEAR(TO(BE(THREATS.( (

GLOBAL&FACTORS&

There&are&several&global&factors&that&present&opportunities&when&assessing&the&operations&strategies& available&for&operations&managers.& & Global*Sourcing* Global&sourcing&is&a&broad&term&that&refers&to& businesses&purchasing&supplies&or&services&without& being&constrained&by&location.&Global&sourcing&as&an& Global& Sourcing& operations&strategy&involves&the&sourcing&of&any& business&operations&that&gives&the&business&cost& advantages.& & Benefits:&  Cost&advantages& Research&and& Economies&of&  Access&to&new&technologies& Development& Scale&  Advantages&of&expertise&and&labour&  Specialisation&  Access&to&other&resources&  Ability&to&operate&extended&hours& & Scanning&and& Disadvantages:& Learning&  Storage&and&distribution&  Different®ulatory&conditions&between&nations&  Increasing&complexity&of&overall&operations& & & Economies*of*Scale* Economies&of&scale&refer&to&cost&advantages&that&can&be&gained&by&producing&products&on&a&larger& scale.&This&means&that&business&can&lower&their&per&unit&input&costs&and&therefore&increase&their& profits.& & There&are&clear&production&advantages&of&producing&high&volumes.&Typically&the&cost&savings&come& from&being&able&to&purchase&lower&cost&per&unit&input&costs&due&to&bulk&purchases&of&stock,&and&the& efficiencies&created&from&the&improved&use&of&technology.& & Scanning*and*Learning* All&businesses&can&benefit&from&scanning&(searching&or&looking)&the&global&environment&and&learning& from&the&best&practice&of&businesses&around&the&world.&People&and&places&to&learn&include:&  Management&journals&  Industry&and&business&associations&  Conferences&  Other&forums&  Staff&members&  Managers& & Research*and*Development* R&D&helps&businesses&to&create&leading&edge&technologies,&and&to&create&innovative&products&and& solutions.&&A¢ral&aspect&of&R&D&is&ascertaining&what&consumers&want&and&assisting&to&create& products&that&meet&their&needs.& & & & & &

Global& Factors&

OPERATIONS*TOPIC*GLOSSARY* & &

TERM! Inputs! Capital=Labour!Substitution! Transformed!Resources! Materials! Raw!Materials! Intermediate!Goods! Information! KPIs! Govt.!Relations!Management!

Transformation!Process! Transforming!Resources! Human!Resources! Facilities! Volume! Mix!Flexibility! Lead!Time! Predicting!Demand! Sequencing! Scheduling!

DEFINITION! Are!the!resources!used!in!the!transformation!process! Means!that!machinery!and!technology!displace!(put!out!of!place)!people! by!doing!the!work!they!do! Are!those!inputs!that!are!changed!or!converted!in!the!operations! processes!such!as!materials,!information!and!customers! Are!the!basic!elements!used!in!the!production!process!and!consist!of!two! types:!raw!material!and!intermediate!goods! Are!the!essential!substances!in!their!unprocessed!state! Are!finished!or!semi=finished!products!that!are!used!in!further! manufacturing!or!processing! Is!the!knowledge!gained!from!research,!investigation!and!instruction,! which!results!in!an!increase!in!understanding! Are!specific!measures!used!to!assess!the!efficiency!and!effectiveness!of! the!business’s!performance! Refers!to!the!systems!that!businesses!use!to!maintain!customer!contact! to!improve!customer!service,!increase!competitiveness!and!identify! changes!in!customer!tastes! Is!the!conversion!of!inputs!(resources)!into!outputs!(goods!&!services)! Are!those!inputs!that!carry!out!the!transformation!process!such!as! human!resources!and!facilities! The!employees!of!a!business! Refer!to!the!plant!(factory!or!office)!and!machinery!used!in!the! operations!processes! Refers!to!how!much!of!a!product!is!made! Is!the!mix!of!products!made,!or!services!delivered!through!the! information!process! Is!the!time!it!takes!for!an!order!to!be!fulfilled!from!the!moment!it!is! made! Is!forecasting!demand!so!that!adjustments!can!be!anticipated!and!a! business!can!act!accordingly! Refers!to!the!order!in!which!activities!in!the!operations!process!occur! Refers!to!the!length!of!time!activities!take!within!the!operations!process!

Gantt!Charts!

Is!a!type!of!bar!chart!that!shows!both!the!scheduled!and!completed!work! over!a!period!of!time.!It!is!often!used!in!planning!and!tracking!a!project!

Critical!Path!Analysis!

A!scheduling!method!or!technique!that!shows!what!tasks!need!to!be! done,!how!long!they!take!and!what!order!is!necessary!to!complete!those! tasks! Is!to!commute!or!travel!to!work!electronically.!This!means!that!home!or! another!location!becomes!the!worksite!and!work!is!delivered!via!email! or!the!internet.! Are!highly!specialised!forms!of!technology!that!can!shape!transformation! processes!so!that!they!are!very!high!quality,!efficient!and!minimise! waste.! Is!a!computerised!design!tool!that!allows!businesses!to!create!product! possibilities!from!a!series!of!input!parameter!(limitation)!

Telecommute!

Robotics!

CAD!

CAM!

Task!Design! Skills!Audit!

Plant!Layout! Process!Layout! Product!Layout! Product!Production! Product!Production! Fixed!Position!Layout! Workstation! Monitoring! KPIs! Controlling! Improvement! Bottleneck!

&

Is!a!software!that!controls!manufacturing!processes,!and!can!be!used! more!broadly!to!calculate!how!much!of!each!input!recourse!would!be! required! Is!breaking!down!the!work!into!a!series!of!jobs!that!make!it!easy!for!an! employee!to!successfully!perform!and!complete!the!task.! Is!a!formal!process!used!to!determine!the!present!level!of!skills!and!any! skill!shortfalls!that!need!to!be!made!up!either!through!recruitment!or! through!training! Is!the!arrangement!of!equipment,!machinery!and!staff!within!the!facility! Is!the!arrangement!in!which!machines!and!equipment!are!grouped! together!by!the!function!they!perform! Is!when!the!equipment!is!arranged!into!sequence!of!tasks!performed!in! manufacturing!a!product! Is!the!manufacturing!of!a!high!volume!of!constant!quality!goods! Deals!with!layout!requirements!for!large!scale!bulky!activities!such!as!the! construction!of!bridges!or!aircrafts!and!ships! Is!where!a!product!remains!in!one!location!due!to!its!weight!or!size,! employees!and!equipment!are!brought!to!the!site! Are!the!desk!areas!required!by!office!workers!usually!fitted!with!all!the! office!work!equipment!such!as!a!computer,!telephone!and!printer!etc.! Is!the!process!of!measuring!actual!performance!against!planned! performance! Are!predetermined!variables!that!are!measured!so!appropriate!controls! to!operations!processes!can!be!made! Occurs!when!KPIs!are!assessed!against!predetermined!targets!and! corrective!action!is!taken!if!required! Refers!to!systematic!reduction!of!inefficiencies!and!wastage,!poor!work! processes!and!the!elimination!of!any!bottleneck! Is!an!aspect!of!the!transformation!process!that!slows!down!the!overall! processing!speed!or!creates!an!impediment!(obstruction)!leading!to!a! back!of!incompletely!processed!products.!