Documente Academic
Documente Profesional
Documente Cultură
STUDY
BUDDY
1
H S C S t u d y B u d d y
www.hscstudybuddy.com.au
info@hscstudybuddy.com.au
Operations
Notes
Goods Services
Each
business
function
has
a
strategic
component
affecting
all
key
business
areas
strategic
role
of
operations
involves
operations
managers
contributing
to
the
strategic
direction
or
plan
of
the
business
LONG
TERM
Generally
the
overarching
goal
of
a
business
is
to
maximise
profits
operations
function
is
a
COST
CENTRE
(attracts
cost
but
does
not
bring
about
income)
- Therefore
a
strategic
aspect
of
operations
management
is
reducing
costs
Cost Leadership
Economies
of
Scale
Control
Produccon
Costs
-->
Labour,
raw
materials
and
overheads
(equipment)
Technology
-->
up
to
date
Good/Service
Differentiation
Goods
Only
Services Only
Tangible
Can
be
stored
Output
produced
before
consumption
Intangible
Cannot
be
stored
Production
and
consumption
simultaneously
High
customer
contact
Cannot
be
transported
Quality
difficult
to
examine
Goods
Varying
product
features/design
-
colour,
ingredients
Angus
Burger
-
100%
Angus
Beef
Varying
product
quality
-
price/quality
interaction
Maccas
Angus
positioned
as
a
premium
product
Varying
any
augmented
features
-
add-
ons
or
additional
benefits
associated
with
goods
Reversing
camera
for
Toyota
Rav4
Wheel
Drive
Services
Varying
amount
of
time
spent
on
a
service
Prior
tutoring
offering
free
workshops
Varying
the
qualifications/experience
of
the
service
provider
-
level
of
specialisation
affects
the
quality
Varying
the
quality
of
technology
used
in
delivery
-
i.e.
quality
of
phone
networks,
internet
service
etc
Perishable
High
standards
of
quality,
safety
and
cleanliness
in
all
operating
processes
Short
lead
times
and
distribution
that
is
quick
and
effective
Appropriate
robust
packaging
and
cold
storage
processes
both
through
production
and
distribution
Non-perishable
Manage
all
aspects
of
quality
in
the
process
from
sourcing
through
to
production
and
distribution
Implement
effective
inventory
management
strategies
and
be
highly
responsive
to
market
demand
in
order
to
NOT
over
produce
Services
Services
can
also
be
standardised
and
customised
- fast-food
industry
aims
to
standardise
service
- Differs
from
professional
services
that
are
customised
(legal/medical
services)
Self-service
-
means
encouraging
the
customer
to
take
the
initiative
to
help
themselves
shown
through
self-service
checkouts
in
Coles/Woolworths
- Online
booking
for
travel
industry
lowers
costs
+
increase
efficiency
Although
a
business
can
separate
key
business
functions
into
departments
that
perform
their
distinct
roles
the
functions
are
interdependent
relies
on
the
coordination
of
others
to
perform
effectively
cross-coordination!
Interdependence
-
refers
to
the
mutual
dependence
that
the
key
functions
have
on
each
other
each
must
work
towards
common
goals
and
depends
on
the
support
of
others
Technology
Quality
Expectations
Cost-Based
Competition
Legal
compliance
involves
strictly
observing
the
laws
and
adhering
to
all
minimum
standards
Ethical
responsibility
goes
further
than
that
they
follow
it
by
their
own
intentions
and
it
is
the
'spirit'
and
'culture'
of
the
business
it
is
about
what
is
morally
right.
- Acts
with
integrity
and
honestly
to
community
standards
Firms
must
legally
comply
with;
- Labour
laws
-
Fair
Work
Act
- Environmental
and
public
health
compliance
- Business
licensing
rules
- Taxation
- Trade
practices
- Intellectual
property
laws
- Financial
and
accounting
regulations
- Human
rights
To
be
ethical:
- Code
of
ethics
- Corporate
culture
change
- Role
model
appropriate
behaviour
This
requires
a
lot
of
compliance
costs
therefore
many
businesses
opt
for
the
lowest
levels
of
compliance
that
is
permissible
BUT
NOT
RECCOMMENDED
-
can
damage
a
firms'
reputation
The
Body
Shop
gives
staff
two
days
paid
leave
a
year
devoted
to
community
projects
leads
to
content
staff
who
enjoy
their
work
benefits
the
business
Ethical Responsibility
Involves
businesses
going
beyond
the
law
and
taking
into
account
broader
social,
community
and
environmental
concerns
however
with
differing
laws
between
nations
it
is
hard
to
determine
whether
a
business
is
ethical
or
not
Therefore,
businesses
may
follow
guidelines
set
by
international
bodies
e.g.
International
Labour
Organisation
(ILO)
Operations Processes
Inputs
Input Classification
Transformed
Resources
-
are
those
inputs
that
are
changed
or
converted
in
the
operations
process
Materials
Transforming
Resources
-
are
those
inputs
that
carry
out
the
transformation
process
enables
change
and
value
adding
to
occur
Human
Well
qualified,
disciplined
+
hard
working
staff
can
bring
great
productivity
Resources
and
are
valuable
inputs
operate
on
machinery
that
makes
G/S
Effectiveness
of
HR
can
determine
the
success
of
transformation
and
value
adding
ensuring
staff
motivation
remains
high
This
can
improve
the
performance
of
operations
processes
good
job
design,
training,
flexible
work
practices
and
good
communication
Qantas
cleaners,
baggage
handlers
+
pilots
Facilities
Facilities
-
refer
to
the
plant
(factory
or
office)
and
machinery
used
in
the
operations
processes
efficient
plant
design
is
crucial
Ultimately
determines
the
firms
capacity
to
transform
nature
of
the
operations
environment
achieves
the
core
function
-
producing
output.
Facilities
which
integrate
modern
technologies,
well
designed
and
are
labour
friendly
will
promote
productive
operations
Qantas
terminal
buildings,
aircraft,
computers,
maintenance
facilities
Transformation Processes
Variety
Variation
in
Demand
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
- They
assist
in
structuring
and
ordering
the
transformation
process!
- With
careful
sequencing
and
scheduling
costs
of
operations
can
be
minimum
Qantas
uses
Sabre
Air
Flight
Suite
Systems
(a
complex
scheduling
software)
which
automates
its
flight
scheduling
ensures
there
is
adequate
time
for
cleaning,
catering
and
engineering
support
before
arrival
and
take-off
Gantt
Charts
Gantt
Chart
-
is
a
bar
chart
that
shows
both
the
scheduled
and
completed
work
over
a
period
of
time
used
in
planning
and
tracking
projects
- Outlines
activities
that
need
to
be
performed,
the
order
to
be
performed
and
how
long
they
are
expected
to
take
Advantages
1. Forces
a
manager
to
plan
the
steps
needed
to
complete
a
task
and
specify
time
required
Critical
Path
Analysis
-
is
a
scheduling
technique
that
shows
what
tasks
need
to
be
done,
how
long
they
take
and
what
order
is
necessary
in
a
sequence
- Some
tasks
need
to
be
completed
before
others
can
begin
Therefore,
a
manager
can
see
what
needs
to
be
done
and
allows
the
timing
of
tasks
to
be
considered
a
business
can
see
in
what
order
activities
need
to
be
done
Gives
the
firm
a
sense
of
direction
and
organisation
to
operations
processes,
provides
overall
coordination
and
ultimately
a
means
of
control
Critical
path
is
the
shortest
length
of
time
to
complete
all
tasks
necessary
shortest
time
possible
to
complete
the
operations
process
In
this
case,
the
shortest
path
is:
(1)
day
Quality
Test
Materials
+(15)days
+(1)
day
+(2)
days
+(1)
day
Make
Paint
Final
Quality
Components
Components
Assembly
Test
Product
+(1)
day
Dispatch
=21
DAYS
Technology
Business
technology
involves
the
use
of
machinery
and
systems
that
enable
businesses
to
undertake
the
transformation
process
more
effectively
and
efficiently
Firms
need
to
acquire
up-to-date
technology
to
compete
speeds
up
processes
and
enables
fuller
utilisation
of
resources
more
cost-effective
operations
processes
Initial
capital
cost
of
technology
is
quite
high
businesses
may
decide
to
lease
it
(tax
deductible)
- May
lead
to
the
displacement
of
workers
or
new
costs
involved
with
training
Qantas
technology
such
as
online
check-in/booking
and
electronic
bag
tags
have
increased
productivity
and
have
replaced
human
capital
Office
People
have
begun
to
telecommute
emails
checked
from
home,
Technology
Skype
meetings,
paperless
trading
Manufacturing
These
include
robotics
on
assembly
lines
-
efficient
and
minimise
Technology
waste
- Don't
demand
higher
wages/working
conditions
favourably
better
than
labour
Computer-aided
design
(CAD)-
allows
firms
to
create
products
from
inputs
on
computers
useful
in
transformation
processes
- Generates
3D
pictures
which
assists
the
designer
to
visualise
the
product
- Also
can
allow
users
to
modify
materials
used
in
order
to
change
the
cost
of
production
Computer-aided
manufacturing
(CAM)-
allows
manufacturing
process
to
become
computer
controlled
factory's
etc..
Task Design
Task
Design
-
involves
classifying
job
activities
in
ways
that
make
it
easy
for
an
employee
to
successfully
perform
and
complete
the
task
- Overlaps
the
employment
functions
of
job
analysis,
job
description
and
person
specification
- An
example
of
the
interdependence
between
HRM
and
operations
Plant
Layout
-
is
the
arrangement
of
equipment,
machinery
and
staff
within
the
facility
has
a
huge
impact
on
efficiency
of
operations
Must
conform
with
legal
regulations
(OHS),
adequate
stock
levels,
space
and
lighting
Process
Layout
Qantas
is
one
of
the
few
airlines
in
the
world
that
own
their
own
terminals
A
MAJOR
EXPENSE
for
Qantas
Intermittent
Process
Production
-
deals
with
high-variety,
low-volume
production
Production
Each
product
has
a
different
sequence
of
production
that
is
intermittent
i.e.
moving
from
one
department
to
another
Involves
team
based
works
through
'work
cells'
Product
Product
layout
-
where
the
equipment
arrangement
matches
the
Layout
sequence
of
tasks
performed
in
manufacturing
a
product
Here
an
assembly
line
is
common
Fixed
Fixed
Position
Layout
-
is
where
a
product
remains
in
one
location
due
Position
to
its
weight/bulk
Layout
Project
Production
-
deals
with
layouts
for
big
activities
i.e.
construction
of
bridges
every
stage
of
production
is
in
one
area
Office
Workstations
-
common
in
service
based
sectors
Layout
Needs
to
have
smooth
workflow
provide
space
for
breaks
Monitoring,
Control
and
Improvement
Monitoring
Control
Outputs
Output
-
refers
to
the
end
result
of
the
business
efforts
-
the
G/S
that
is
provided
or
delivered
to
the
customer
Should
always
be
responsive
to
customer
demands
issues
of
quality,
efficiency
and
flexibility
must
be
balanced
against
the
resources
and
strategic
plan
of
the
business
Customer
service
and
warranties
imply
that
the
inputs
and
transformations
processes
are
subject
to
scrutiny
as
the
outputs
will
be
assessed
by
customers
Customer
Service
Operations Strategies
Performance
Objectives
Quality
-
Being
RIGHT
-
meecng
customer
expectacons
Dependability
-
Being
On
Time
Speed
-
Being
FAST
Flexibility
-
being
ABLE
TO
CHANGE
Customisacon
-
being
able
to
prodivde
MORE
OPTIONS
THIS
ALL
LEADS
TO
AN
INCREASE
IN
COMPETITIVENESS
Cost
-
Being
PRODUCTIVE
(cost
leadership)
Quality
Speed
Must
consider:
- Quality
-
attributes
and
features
- Supply
Chain
Management
-
where?
what?
how
much?
timing?
- Capacity
Management
-
may
require
new
resources
or
technology
- Cost
-
dependent
on
inputs,
time
and
energy
Product
Utility
-
is
the
usefulness
and
value
that
a
product
has
from
the
consumer's
point
of
view
Apple's
continued
success
is
because
they
understand
the
power
of
product
design
and
development.
Apple
has
established
a
reputation
as
a
company
that
produces
extraordinary
products
that
grab
the
attention
and
loyalty
of
customers
Services
Supply
Chain
Management
(SCM)
-
involves
integrating
and
managing
the
flow
of
supplies
throughout
the
inputs,
transformation
processes
(throughput
and
value
adding)
and
outputs
in
order
to
best
meet
the
needs
of
customers
Influenced
by
what
is
sold
and
what
is
returned
involves
both
sourcing
(supply)
as
well
as
logistics
and
distribution
Sourcing
E-
Commerce
Logistics
Advantages
Simplification
-
reducing
number
of
activities
performed
within
the
business
Efficiency
and
cost
savings
-
cheap
resources
and
specialised
businesses
KPI
of
speed
Improvements
to
quality
of
process
due
to
operational
expertise
Disadvantages
Huge
start-up
costs
Communication
and
language
barriers
can
cause
misunderstandings
Loss
of
control
of
standards
and
information
security
o Virgin
Blue
check-in
issue
Sept
2010
$20
million
lost
-
400
flights
disrupted
50,000
passengers
Loss
of
customer
face-face
contact
Leading
Leading
Edge
Technology
-
is
the
most
advanced
and
innovative
Edge
technology
at
a
point
in
time
e.g.
Nanotechnology
Technology
- Helps
businesses
create
products
more
quickly
and
to
higher
standards
with
less
waste
competitive
advantage
- Allows
operations
to
be
more
effective
- Generally
very
expensive
short-term
loss
of
productivity
with
training
staff
to
use
technology
but
useful
(usually)
in
long-term
- There
is
a
lack
of
competent
technical
support
since
product
is
new
Yarra
Precision
Engineering
used
a
combination
of
innovative
CAD/CAM
to
create
more
intricate
component
designs
cost
was
$5.5
million
but
the
breakeven
point
is
within
24
months
beneficial!
Established
Established
technology
-
is
the
technology
that
has
been
developed
and
Technology
is
widely
used
e.g.
computers,
software,
mobile
phones
etc..
- Help
achieve
basic
standards
for
productivity
and
speed
- Due
to
the
universal
availability
of
established
technologies,
they
may
not
necessarily
result
in
a
competitive
advantage
BUT
the
absence
of
their
use
will
result
in
competitive
DISadvantage
o Use
of
Bar-coding,
IT
and
robotics
are
common
today
Inventory Management
Inventory
valuation
methods
allow
people
to
see
the
VALUE
OF
UNSOLD
STOCK
and
the
VALUE
OF
SOLD
STOCK
to
determine
COGS,
gross
profit
and
closing
inventory
level
on
balance
sheet
At
the
end
of
an
accounting
period,
it
is
important
to
determine
the
value
of
unsold
stock
methods
of
valuation
affect
the
calculation
of
COGS,
gross
profit
and
inventory
Last-
In
- Last-In-First-Out
(LIFO)
-
assumes
that
the
last
goods
that
were
purchased
First-
Out
by
the
business
are
the
first
goods
sold
(LIFO)
- Unit
sold
is
the
last
cost
the
was
incurred
and
the
stock
left
on
the
shelf
is
the
older
stock
that
was
bought
first
IMPACT
Prices
used
to
calculate
COGS/Gross
profit
are
the
more
recent
prices
and
more
closely
reflect
their
economic
value
but:
- High
Inflation
-
(inflation
has
already
kicked
in
and
brings
up
price!)
THEREFORE
LIFO
overstates
COGS,
understates
profits
and
minimises
taxes
and
undervalues
inventory
in
balance
sheet
First-In-
First-In-First-Out
(FIFO)
-
assumes
that
the
first
goods
that
were
purchased
First-Out
by
the
business
are
the
first
goods
sold
(FIFO)
- Unit
sold
is
the
first
cost
that
was
incurred
and
the
stock
that
is
left
on
the
shelf
is
the
newer
stock
that
was
bought
last
- Products
are
bar
coded
and
date
coded
to
assist
with
inventory
management
when
goods
have
a
'use
by'
or
perishable
date
o E.g.
Milk
at
Coles
and
Woolworths
IMPACT
Prices
used
to
calculate
COGS
and
gross
profit
are
the
older
prices
so
that:
- High
Inflation
-
(inflation
only
kicks
in
AFTER!)
THEREFORE
FIFO
understates
COGS,
overstates
profits
and
maximises
taxes
and
overvalues
inventory
in
the
balance
sheet
Weighted
Weighted
Average
Cost
(WAC)
-
uses
the
average
cost
of
the
inventory
Average
purchased
to
calculate
the
COGS,
gross
profit
and
inventory
valuation
Cost
- Neither
LIFO
nor
FIFO
is
better
businesses
report
different
(WAC)
profit/inventory
levels
during
price
changes
- Footnotes
to
the
financial
statement
disclose
the
inventory
valuation
method
used
Just-In-
Just-In-Time
(JIT)
-
ensures
that
the
exact
amount
of
material
inputs
arrive
Time
only
as
they
are
needed
in
the
operations
process
(JIT)
This
allows
a
'lean'
production
method
with
minimal
waste
makes
only
enough
products
to
meet
demand
- Saves
money
-
no
expensive
holding
and
insurance
costs
HOWEVER
-
requires
very
flexible
operations
function
with
flexible
processing/supply
chain
management
Toyota
uses
JIT
and
ensures
parts
arrive
2
hours
before
they
are
needed
Quality Management
Qantas
has
always
been
marketed
as
a
high
quality,
perfect
safety
record,
full
service
airline
and
commanded
premium
fares.
On
the
other
hand,
Jetstar
has
traded
quality
for
price
and
been
marketed
as
a
no
frills
low
cost
airline.
During
2011
Qantas'
marketing
plan
has
taken
a
battering
with
mechanical
breakdowns
and
the
sudden
shutdown
of
all
services
has
had
serious
consequences
on
customer
satisfaction
and
perception
Quality
Control
All
businesses
are
subject
to
change
from
the
internal
and
external
environment
- External
(most
common)
-
legislation,
economic
conditions,
social
changes,
technological
etc
- Internal
-
initiative
of
staff,
application
of
technology
and
innovation
Resistance
to
change
-
is
the
perception
that
a
change
will
threaten
an
individual
or
group
can
be
a
major
obstacle
to
the
realisation
of
operations
goals
overcoming
this
resistance
is
a
necessary
aspect
of
change
management
- Change
can
often
be
resisted
as
it
causes
uncertainty
and
risk
Resistance
to
change
arises
from
2
sources:
1. Financial
2. Psychological
(inertia)
- Managers
must
put
in
place
strategies
to
overcome
this
resistance
Factors
such
as
September
11
terrorist
attacks
2001,
SARS
epidemic
2003,
rapid
increase
in
fuel
costs
and
emergence
of
low-cost
carriers
have
prompted
change
within
Qantas
Redundancy
Payout
Retraining
costs
arise
from
change
that
causes
a
reorganisation
of
business
hierarchy
or
from
new
technology
Job
roles
may
change
requiring
new
skills
Purchase
of
technology
requires
training
on
new
software
Qantas
new
reservation
system,
annual
security
training,
engineering
and
maintenance
for
new
aircrafts
are
examples
of
training
Reorganising
Plant
-
refers
to
the
facilities
in
which
the
machinery
is
arranged
Plant
Layout
Major
changes
such
as
re-engineering
systems
often
require
extensive
reorganisation
of
the
plant
MAJOR
COSTS
Transporting/placing
the
new
equipment
Transferring
old
machinery
and
testing
new
equipment
Temporary
losses
of
productivity
with
new
training
etc
In
long-term
these
costs
should
translate
into
greater
efficiencies
and
profits
Jetstar
is
replacing
Boeing
717s
with
Airbus
A380s
new
heavy
maintenance
becomes
necessary
Retraining
Change
is
constant
and
in
small
ways
business
processes
are
continually
being
refined
and
adapted
over
time
- Even
though
change
is
continuous,
sometimes
major
change
can
act
as
a
discontinuity
Successful
managers
must
anticipate
and
adjust
to
changing
circumstances
rather
than
being
passively
swept
along
or
being
caught
unprepared
- Must
be
PROACTIVE
-
initiate
change
themselves
- NOT
REACTIVE
-
those
who
wait
for
change
to
occur
and
then
respond
to
it
Changes
must:
- Occur
at
a
steady
pace
so
they
can
be
integrated
into
the
business
- Be
evaluated
thoroughly
to
assess
their
overall
impact
poorly
managed
changes
result
in
employee
resistance,
tension
and
lost
productivity
- Be
introduced
into
the
workplace
culture
Change
Management
Strategies
1.
Idenccacon
of
Change
2.
Seung
Achievable
Goals
3.
Creacng
a
Culture
of
Change
4.
Using
Change
Agents
Global
Factors
Global
Sourcing