Extensive Notes: Role of Operations Management

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Business Studies Notes
Role of operation management:
Strategic role of operations management-
Operations refer to the business processes that involve transformation or, more generally, ‘production’. Applies both to the manufacturing and services sector. Turning raw materials and resources into outputs of finished goods or products. Qantas operations are strategically important because most organizational activity comprises the day to day activities within the operation function. * Cost leadership- Cost leadership involves aiming to have the lowest costs or to be the most price-competitive in the market. Qantas; Economies of scale, these are minimizations of cost because of the size of the business. Standardization, the more variations Qantas’ services like the types and frequency of the routes the higher production cost per unit. Technology, the adoption and application of advances in technology directly impact on production costs, reduction in labour costs. Waste, minimizing waste will deliver the lowest production costs, excess production, underutilization of labour or equipment, faulty or defective production and excess inventory. * Goods/service differentiation- this approach does not mean competing on cost but by adding features to differentiate its products or service from its competitors. Qantas, Australia’s largest airline offering the most comprehensive domestic and international coverage. City flyer express service means that there are flights every 30 minutes in peak periods between the major capital cities in Australia. Also 76 international destinations. Qantas budget airline Jet star. Goods and services in different industries- manufacturing- standardized or customized products, perishable or non-perishable products, intermediate goods service- standardized (fast food) or customized (doctors, legal services etc.) or even self-service. Interdependence with other key business functions- human resources, finance and marketing –exist because of and to support the operations function. However, operations cannot succeed with out their contribution to and direct participation in the transformation of inputs into the final outputs. Qantas recruitment- for everyone from pilots to baggage handlers and cleaners. Training and development- newer planes need to retrain pilots, maintenance crews and cabin staff to effectively integrate the new craft. Retained staff- invested heavily in training pilots and maintenance staff to the high level required in this industry, so they want to retain them.

Influences
Globalization; refers to the removal of barriers of trade between nations, creating new market opportunities. Characterized by integration between national economies, transfer of capital, labour, financial resources and technology. Qantas- launching new airlines in Asia, cost minimization to be more internationally competitive Technology: innovation of devices. Communication, keeping up with competitors, supply chain management, quality expectations. Qantas- newer planes, newer operational processes, more training required Quality expectations- how well designed, made and functional goods are, and the overall degree of competence with which service are organized and delivered. Qantas- new generation check in, new Q bad tags, newer planes, specially designed menus Cost-based completion; recognizes that prices cannot keep increasing and reducing cost is a way to maximize profits when revenues are fixed. Qantas- outsourcing, reform to HR practices employing more labour saving techniques, online bookings Government policies; political decisions affect the businesses rules and regulations, which in turn, directly affect the management of various key business functions. Qantas- more resources devoted to compliance Legal regulation; the regulations that shape business practices and procedures must be followed at the risk of penalty, hence the term compliance. Environmental sustainability; environmental...
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