OPERATIONS- BUSINESS STUDIES YEAR 12 WITH VERIFIED SOLUTIONS 2024.

ROLE OF OPERATIONS MANAGEMENT -strategic role of operations management - cost leadership, good/service differentiation - goods and/or services in different industries - interdependence with other key business functions Strategic role of operations management Turning raw materials into goods. Brainpower Read More Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:14 / 0:15 Full screen Cost Leadership When a business tries to keep their operations at the lowest cost possible. If a business does this, it will help them maximise profits and therefore allowing them to gain a competitive advantage. The way a business can lower its costs of operations to gain cost leadership is by: outsourcing, buying cheaper raw materials and finding cheap suppliers. CASE STUDY: McDonald's have cheap suppliers, which means they have pay for cheaper ingredients in order to gain cost leadership. They also sell their products cheaper than other fast food outlets which attracts more consumer allowing them to gain a competitive advantage. Goods/service differentiation When a business tries to make their goods/service different from its competitors. This can be done by: increasing the quality, faster delivery, more technology advancements and advertising. This allows a business to build up their brand loyalty and maximise their products leading to the capture of greater market share. CASE STUDY: McDonald's differentiates their products from their competitors by their advertising methods and the delivery of their products. This allows them to capture greater market share. Goods and/or services in different industries Making outputs are tangible which means they can be stored and distributes to customers. Services are intangible and require interaction towards consumers. CASE STUDY: Mcdonald's goods are their food products and their service includes customer service and the cooking of their products. Interdependence with other key business functions MARKETING: Helps the business know how their goods will be distributed. Research and development must be taken into consideration to create better products, which links with how the product is going to be made- operations. FINANCE: The cost of the operations. HUMAN RESOURCES: The making of the product helps the business know how many employees they need to help operate it. CASE STUDY: Apple cut the production of their iPhone X due to the decrease in profits and less demands which demonstrates the link between Operations and Marketing. INFLUENCES - Globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability corporate social responsibility - the difference between legal compliance and ethical responsibility - environmental sustainability and social responsibility Globalisation The breaking down of barriers between nation states allowing for the trade fo goods and services. This has allowed businesses to locate raw materials quicker and easier, creating cheaper labour. It also is enabled by reduced transportation costs (for example, container shipping). Global businesses A business that sells its products to more than one country. This is different from an international business, which sells products worldwide but has facilities only in its home country. Depreciation When a product depreciates in value. This is due to poor economy performance. Technology Globalisation is assisted by technology. E.g. Phones and the internet. It has allowed businesses to access cheaper, faster and higher quality production methods. Businesses must keep up with the newest technologies in order to capture a greater market share and earn maximised profits. Businesses have robotic programmed machines to perform certain tasks instead of employees. - The advantage includes: They are productive 24/7, they do not need to payed hourly wages and they make less errors. - The disadvantages include: Costs more to purchase than regular employees and high maintenance. CASE STUDY: Mcdonald's uses technology in many areas including: training, services and research. This has allowed them to create a faster service whilst making customers happy. Quality expectations Consumers expect certain quality towards certain products, which is based on the price and brand. They expect the product to be: - Durability: Refers to how long it can be used for. - Reliability: Refers to how long product functions with repair and maintenance. - Fit for purpose: Refers to how well it completes the desired function. CASE STUDY: Apple ensures that its iPhones continue to meet the expectations of customers who value quality above price. This increases market share and consumer loyalty. Cost-based competition Businesses can gain a price advantage if they use cost-leadership strategies (advertising, update their technology, good differentiation). Once they use these strategies they can become a cost leader, which impacts on their operations management allowing them to attract competition into their market. Fixed costs: They are costs Variable costs: They are costs which vary. Economies of scale: Refers to cost advantages due to larger businesses operations scale. Government policies The government encourages businesses to become more competitive and innovative as well as keeping the business environment safe. This helps guarantee economic performance and growth. The impact this has on a business is it encourages them to make decisions that will help them become more innovative. CASE STUDY: Mcdonald's implement the 'Fair Work Act' which guarantees certain employees rights, therefore increasing the cost of operations. Legal regulation Legal regulations are put into place to promote safe and fair practices for businesses. Some legal acts include: - Occupational Health and Safety Act: Forces workplaces to provide safe work environments for their employees and for them to include training and equipment. - Competition and Consumer Act 2010: Ensures that consumers are protected from dangerous business activities. Ethical and social responsibility The term 'ethics' refers to doing something right. A business can showcase this through: supporting charities, or promoting human and civil rights. Many businesses adopt a 'code of conduct' which provides ethical behaviour allowing them to increase consumer awareness. The code of conduct includes: minimising environmental impact, reducing waste, increasing customer service. CASE STUDY: Woolworths stopped offering plastic bag which created more consumer awareness allowing them to maximise profits. Environmental sustainability It is when a business uses its resources efficiently so that they do not get destroyed for future years. This prevents waste and pollution. Since consumers are more aware of environmental sustainability. Businesses must adopt this strategy to encourage customer loyalty. CASE STUDY: Mcdonald's monitors the amount of supply they receive as they track them. This allows them to use its resources efficiently providing environment sustainability. PROCESSES inputs - transformed resources (materials, information, customers) - transforming resources (human resources, facilities) transformation processes - the influence of volume, variety, variation in demand and visibility (customer contact) - sequencing and scheduling - Gantt charts, critical path analysis - technology, task design and process layout - monitoring, control and improvement Inputs They are resources that go into production to turn into outputs. They can be tangible or intangible. Transformed resources They are inputs which are converted into something else. - Materials: Raw ingredients used in the operations process. CASE STUDY: For Mcdonald's it includes their materials, beef, chicken, fish, salad, buns, milk, etc. - Information: It is used by a business to control how the materials will turn into products. - Customers: They are an input as they make the business operate. CASE STUDY: consumers of all ages, from children to the elderly. Transforming resources They are resources used to help transform the inputs into outputs. - Human resources: They are people who have the skills and knowledge to help operate the business. CASE STUDY: Restaurant staff, restaurant management, office and franchise staff. - Facilities: The machinery, buildings, land and technology to help transform the input into an output. CASE STUDY: kitchen equipment, the buildings, service desks for Mcdonald's. Transformation process They are the activities that determine how value will be added through the combination of inputs. These processes can add value in four ways: - Physical altering of the physical inputs or the changes that happen to people. - Transportation of goods or services. E.g. it costs more to have them delivered. - the protection of the product giving customers information about the product. Influence (4V's) Volume: the quantity of goods and services provided by operations. CASE STUDY: McDonalds, they are a well known example of high volume low cost hamburger and fast food production. Variety: The number of different versions of the product. Less variety is usually because of mass production Variation: Sometimes the demand for a product is high and sometimes its low. Variation refers to the change in demand. To helps a business predict the variations of demand they must use financial reports from past years. Visibility: Sometimes businesses allow their consumers to see their operations process. E.g. bakeries at Woolworths. This could attract more consumers. Scheduling and sequencing All the steps in the operations process that helps a business organise them more efficiently. Sequencing: the order in which activities occur during the operations process which helps with the efficiency of making the product. Scheduling: The length of time different activities take during the operations process. Gantt charts Records all the activities that need to be completed with the time it takes. Businesses use gantt charts to carefully plan the operations process, breaking each big task into smaller ones. Critical path analysis A type of diagram which shows the tasks that need to be completed, how long for and the order. The critical path os the shortest time to complete all tasks. Technology, task design and process layout Technology: It will give a business a big competitive advantage in the market place but is very expensive. It is more efficient as it faster and does not require human resources. Technologies in manufacturing include: - Computer aided Design (CAD): which is when an individual designs the product on their computer. - Computer aided Manufacturing(CAM): When the CAD is linked to a machine and is then manufactured. CASE STUDY: McDonald's has implemented various technologies into their businesses, which include: Drive-Thru, where customers can order McDonald’s meals on the go, online/phone ordering & delivery 24/7, EZ link payment over counter and credit card payment for online and phone ordering, free Wi-fi connection at all McDonald’s branches and online Networking (Facebook) Task design: The categorisation of jobs in a way which makes it easy for an employee to complete tasks. Different jobs are allocated to specific employees with specific skills. Process layout: For high variety and low volume. It is when machines and equipment are grouped together on how they perform.