HSC Operations Topic 1

The achievement of cost leadership and product/service differentiation in pursuit of creating a competitive advantage

Acknowledges the mutual dependance that KBF's have on one another, this means the various KBF's work best when together

1. KBF 1 IS RELIANT ON KBF 2 as KBF 2 does ______ enabling KBF 1 to achieve _____ (KBF 1 Objectives)
OR
2. KBF 1 CONTRIBUTES TO KBF2 as KBF 1 does _____ enabling KBF 2 to achieve ______ (KBF 2 Objectives)

E - Environmental Sustainability
L - Legal Regulations
E - Expectations of Quality (Quality Expectations)
C - Cost-Based Competition
T - Technology

G - Government Policies
G - Globalisation
+
CSR

the process by which barriers of trade between nations are removed and thus businesses develop international influence and start operating on an international scale.

Government policies are those decisions and rules made by a higher power affecting a businesses operations, they include taxation rates, WHS standards, trade and industry policies

External factors that affect the operations function of a business, they include relevant laws relating to labour/labour management and environmental/public health

- Work Health And Safety Laws (WHS)
- Fair Work + Anti-Discrimination laws
- Enviornmental protection eg; minimising pollution

All businesses must comply with certain laws and regulations. These shape business practices and procedures.

The costs associated with meeting/adhering to legal requirements are known as 'compliance costs'

It is concerned with business operations shaping their practices around practices that consume resources today without comprimising access to those resources for future generations.

Businesses are affected by changes in the technological environment
- Technological change offers risks, opportunities and threats to businesses.
- Can provide a competitive advantage BUT is often expensive

Technologies enable people to communicate more easily and allow for improved business operations

The open and accountable business actions based on respect for people, community/society and the broader environment.

All businesses should comply with all applicable laws and regulations. (Legal compliance)
•
However, Some businesses go much further than simply adhering to the minimum requirements set out under the law; they demonstrate a commitment to ethical responsibility.

Stresses the need for a balance between economic concerns and environmental concerns

Inputs that are changed or converted in the operations process. Eg; Materials, information and customers*

*Customers choice shape the production of inputs

inputs that carry out the transformation process. Eg; Human resources (labour), facillilties

Refers to how much of a product is made
- Aim to achieve voulme flexibiliity*
*(how quickly to react to increases or decreases in demand)

Refers to the mix of products made, the product range and variety of choice for customers
- In 2001 MA had 20 menu items, Since 2007 McDonalds has experienced a 70% increase in variety

Refers to changes in demand for product

Visibility refers to the contact a business has with its customers in relation to the operations process.
McDonald’s achieves visibility through:
 My Maccas’ App
 Online surveys and feedback
 In store feedback

Order of occurrence; The process of following an order to ensure quality (ex: production-line sequencing requires that bottles of soda be filled before the caps are secured).

Refers to the length of time activities take within the operations process

- Allow for sufficient time to complete all activities

Gantt Charts and Critical Path Analysis (CPA)

A horizontal bar chart which records the number of tasks involved in each particular project and the estimated time needed for each task.

Provides a graphical illustration, to help plan, coordinate and track specific tasks in a project

A project analysis & management method that allows a project to be completed in the shortest possible time, involving the use of sequencing and scheduling

Technology may be defined as the design, construction and/or application of innovative devices, methods and machinery upon operations processes

Robotics - Highly specialised/programmable machinery capable of completing tasks

Computer Aided Design (CAD) - A design tool allowing businesses to create product possibilities

Involves the classification of jobs to ensure performance and completion of the task.
- It states what needs to be done and how

The arranagement of machines so that the machines and equipment are grouped together by the function they perform.
EG; Having departments in an assembly line

A product layout is where the equipment, tools, and machines are located according to how a product is made.

Monitoring - Involves measuring business performance over a period of time
(comparing business pefromnace with planned perfomance)

Controlling - Involves taking corrective action based on information gathered from monitoring

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

Any aspect of a business in the transformation process that slows it down and creates a dillema (backlfow)

The end result of a business's efforts — the good or service that is delivered or provided to the consumer

how well a business meets and exceeds the expectations of customers in all aspects of its operations

a promise made by a business that they will correct any defects in the goods they produce or services they deliver

POGO SQIuNT
P - Performance objectives
O - Outsourcing
G - Global factors
O - Overcoming Resistance to change
S - Supply Chain Management
Q - Quality Management
I - Inventory Management
N - New product/service design
T - Technology

Quality (Q)
Flexibiilty (F)
Customisation (C)
Cost (CO)
Dependability (DE)
Speed (S)

The actions taken to meet consumer desires and preference. Key concerns of developing a product are; Quality, SCM, Cost and capacity managament

Some services are:
Explicit - The tangible aspects of a service eg; the application of time, skill and expertise
Implicit - The feeling of being looked after

Refers to the integration and management of the flow of supplies throughout the transformation process

- Mcodnalds outsources its SCM to Martin Brower

Sourcing refers to the purchasing of inputs for the transformation process

Global sourcing is the purchasing of inputs from overseas at the cheapest cost or where they best meet the needs of production or consumers

Logistics refers to the coordination and distrubution of goods and services to customers and the collection of materials from suppliers

Eg; Transportation, Storage/Warehousing, Handling and packaging

Conducting business on the internet (buying/selling on the internet)

Heavily assocuated with Global sourcing

The use of external providers to perfrom business functions. The external providers perform tasks at a lower cost and with greater effectiveness than when done within the business

Advantages:
- Efficiency and Cost savings
- Gaining outside expertise
- Maintaining a focus on core competencies
- Accessing outside technology
Disadvantages:
- Increased logistics and inventory costs
- Loss of Knowledge and control - control of standards and infotrmation security (flexibility)
- Negative impact on employees
- Can cause organisational change or redisgn

1. Whether it is applied to improve inputs, the transformation processes and outputs
OR
2. Whether it makes the managerial and administrative functions smoother

Leading edge technology - the technology that is most advanced or innovative at any point in time eg; nanotechnology, robotics and Ai

Established technology - Technology that has been developed and widely used and accepted/expected in an industry eg; CAD or conveyer belt technology

A systematic approach to recieving, storing and selling inventory to meet competitive priorities of the business

Advantages:
- generate immediate income
- reduces lead time
Disadvantages:
- costly (storage charges)
- cost of obsolescnece (outdated stock)

A strategy used to increase efficiency and decrease waste by only recieving goods as they are needed in the production process, thereby reducing inventory costs

Last-In-First-Out (LIFO) assumes the last stock bought by the business is sold first and therefore the cost of each unit sold is the last cost recorded.
Eg; products without a use by/due date

First in First Out (FIFO) assumes the first stock bought by the business is sold first and therefore the cost of each unit sold is the first cost recorded. FIFO is often used by businesses who have perishable goods.

Involves all activities to ensure that the outputs of the business are consistent, durable and reliable.

Takes into account Quality of Design, conformance and Speed (CODES)

involves the use of inspections at various points in the production process to check for problems and defects

(REACTIVE APPROACH)

involves the use of a system so that a business achieves set standards in production

(PROACTIVE APPORACH)

The CONTINUOUS improvement that a business makes to improve the quality over time, for example, technology upgrades, higher quality inputs

Resistance to change is the unwillingness to adapt to new circumstances or ways of doing things. It can happen with individuals, relationships, or within organizations

Financial costs, such as:
- Cost of purchasing new equipment
- Cost of redundancies
- Cost of retraining employees
- Costs associated with structural reorganisation of the business (reorganising plant layout)

Financials costs that coulde cause resitance to change Include the purchasing of new equipment, retraining of employees and redundancies (and redundancy payments)

Financial compensation for a a newly redundant worker

Reorganising plant layout requires major financial resources as it needs to account for the transport, placement and the provision of power to a plant or new equipment

Refers to the psychological resistance to change or the negative emotions in response to change

- Usually a feeling of uncertainty and fear that comes from the unknown

- Identiying the source of change and assessing if there is truly a need to change
- Clear, effective communication and positive leadership
- Creating a culture of change (a supportive environment which can easily adapt to change)

someone who acts as a catalyst and assumes the responsibility for managing the change process.

This done by working to create a positive and supportive workplace culture

Martin Brower is Mcdonald's dedicated distrubution and logistics provider in which Mcdonalds outsources its SCM to.

1) Cheaper Resources
2) Lower cost of inputs ➡️increased profit margin

1) Loss of control of quality
2)Increased Competition
3) The complexities of managaing global supply chains

1. Global Sourcing
2. Economies of scale
3. Scanning and Learning
4. Research and Development

The cost advantages achieved through producing on a larger, more efficient scale, resulting in a lower cost per unit.

Refers to management being prepared to look at the practices of other businesses and to recognise that there may be better, more efficient ways of operating

An innovation strategy associated with the creation of new products and/or the improvement of existing ones.