Extensive Notes: Role of Operations Management

Business Studies Notes enjoyment of operation instruction Strategic role of operations management- Operations refer to the tune assistes that involve mutation or, much mostly, adjoinion. Applies both to the manufacturing and assistants sector. Turning stabbing materials and resources into outputs of washed-up goods or ingatherings. Qantas operations argon strategically important because most organizational activity comprises the day to day activities within the operation mesh. * apostrophize leadership- Cost leadership involves aiming to have the lowest equals or to be the most price-competitive in the market bug out.Qantas Economies of scale, these argon minimizations of cost because of the size of the business. Standardization, the much variations Qantas services like the types and frequency of the routes the higher slaying cost per unit. Technology, the credence and application of advances in engine room acquitly repair on output signal costs, reduction i n sweat 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 that by adding features to differentiate its products or service from its competitors. Qantas, Australias largest air atmosphere offering the most comprehensive field of study and world(prenominal) coverage. City flyer express service room that there ar flights e real 30 minutes in peak periods between the major(ip) capital cities in Australia. Also 76 international destinations. Qantas budget air hose 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 discern business functions- human resources, finance and marketing follow because of and to support the operations function. However, operations slewnot surveil with out their contribution to and direct participation in the shifting of inputs into the final outputs.Qantas recruitment- for everyone from pilots to baggage handlers and cleaners. Training and development- tonicer planes use up to retrain pilots, support crews and cabin provide to effectively integrate the new craft. Retained faculty- invested heavily in preparation pilots and maintenance staff to the high level required in this industry, so they want to reserve 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(prenominal) internationally competitive Technology i nnovation of devices. Communication, keeping up with competitors, supply chain management, tincture expectations. Qantas- newer planes, newer operational processes, more training required tint expectations- how well designed, made and functional goods argon, and the overall degree of competence with which service atomic number 18 organized and delivered.Qantas- new generation check in, new Q bad tags, newer planes, specially designed menus Cost-based consummation recognizes that prices bottomlandnot keep increasing and cut down cost is a way to maximize profits when revenues argon fixed. Qantas- outsourcing, cleanse to HR practices employing more labour saving techniques, online bookings Government policies political decisions ask the businesses rules and regulations, which in turn, directly affect the management of various key business functions.Qantas- more resources devoted to conformance Legal regulation the regulations that haoma business practices and procedures mus t be followed at the risk of penalty, hence the term compliance. Environmental sustainability environmental sustainability means that business operations should shaped around practices that consume resources today without compromising access to those resources for future generations. Qantas- get new, environmentally sensitive aircraft, recycling, fire conservationCorporate social responsibility (CSR) is an important influence on business and its integrates financial social and environmental goals. Qantas- health surveillance program, energy and water conservation, recycling. * The difference between legal compliance and good responsibility legal compliance refers to business abiding by the word of the law, where as ethical responsibility encompasses a much broader integration of social community and environmental concerns * Environmental sustainability and social responsibly. Businesses argon macrocosm asked to take increasing responsibility for the protection of the environment. The Earth is a fragile form, and of necessity high levels of support and informed intervention so that it may sustain itself. Qantas cultural diversity, reconciliation implement plan is a program, which straines on employing indigenous Australias. Also new aircraft straightway being delivered use slight fuel per passenger. Social responsibility is good business nodes eventually find out which businesses are performing responsibly and which are not. Customers can react and stop buying a businesss product if they learn that the business is exploiting employees, accepting bribes or polluting the environment.Operations processes Inputs labour, Energy, raw materials, machinery and technology (capital equipment) * Transformed resources materials, culture and guests. Are those inputs that are kindd or converted in the operations process. The operations processes transform them. Transformed resources are also considered the resources that enforce the operations process its purpos e or goal * Materials Are the basic elements used in the production process and consist of two types raw materials and intermediate goods. Raw normally substances in their natural asseverate such as mineral ore, timber oil and water. Qantas is the expensive fuel they use. * Intermediate good which are goods manufactured and used in further manufacturing or processing. Qantas examples are the food and ingredients for their catering services, stationary and computers * training is the knowledge gained from research, investigation and instruction, which result in an increase in understanding. The value of information lies mainly in its ability to influence behavior or decision-making.Qantas in individual bookings (information) made by the customers are study and transformed into decision as to which aircraft to use, which services are to offer. * Customers Customers are generally thought of as being relevant to outputs, not inputs. Customers become transformed resources when their choices shape inputs. Qantas customers are transformed by having their location veerd from their scratch range to the new destination. * Transforming resources (human resource, facilities) which are those inputs that carry out the teddy process.They enable the change and value adding to go on * Human resources These are the people who assemble the inputs, go away and maintain the machinery and equipment used in the processes, fulfill the sales function, distribute the output and deal with the customers. Qantas this means everyone from cleaners and baggage handlers to the pilots and sales managers. * Facilities (capital) 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. Qantas this includes the terminal buildings and their contents, maintenance facilities, spare parts holdings, aircraft, and even computers and motor vehicles. * Transformation processes The main concept of operations processes is transformation, which is the conversion of inputs (resources) into outputs (goods or services). * The influence of volume, variation in demand and profile (customer contact) * Volume Volume refers to how much of a product is made.Volume flexibility refers to how quickly the transformation process can adjust to increases or decreases in demand. Standardized products. * transmutation The influence of variety on transformation processes is the greater the variety made, the more the operations process unavoidably to allow for variation. * Variation in demand a variation in demand can impact significantly on transformation resources. An increase in demand will require increase inputs from suppliers, increased human resources, increased energy use and increased use of machinery and technology.Predicting demand. Qantas, experiences a predictable major increase in demand for school holidays and specia l events. * Visibility Customer contact may be direct or indirect. Direct contact takes the form of customer feedback given by dint of surveys, interviews, imprimatur claims, letters, Indirect feedback comes through a review of sales data that gives an indication of customer preferences and market share data, through an bill of peoples decision-making processes and through consumer reviews.Because businesses try to maximize sales, customer contact is essential and ultimately shapes the transformation processes. Qantas is high visibility because there is customer contact throughout the whole process. * Sequencing and scheduling Sequencing and scheduling are two very important aspects that assist with structuring and prepareing the transformation processes. 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.Qantas flight schedule that a customer sees shows devian ce and arrival times. It also includes making sure that each flight has crews. (pilots, cabin, catering) * Grantt 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 * Critical path abstract The Critical Path Analysis (CPA) is a scheduling method or technique that shows what tasks need to be through, how long they take and what order is inevitable to complete those tasks. Technology, task design and process layout Qantas a major business expense for Qantas is the terminal, hanger and maintenance space is which the operations process takes nonplus. Optimum process layout at Qantas is where machines and equipment are grouped unitedly by function. This enables Qantas to utilise space and labour efficiently and eliminate bottlenecks. * Technology technology is the application of science or knowledge that enables people to do new things or perform formal tasks in new and better ways.Qantas has facilitated increase productivity, very often by directly replacing human capital. Examples include online check in, online booking, and electronic bag tags. * Task design Task design involves classifying job activities in ways that make it easy for an employee to successfully perform and complete the task. Qantas the break down of the full transformation process into the individual tasks to be preformed. * Process layout The process layout is the ar ladderment of machines such that the machines and equipment are grouped together by the function (or process) they perform. Monitoring, controlling and improvement Monitoring and control lead to improvements when there is a focus on lumber and standards. Qantas involve detecting and discrepancy between planned and actual activity, taking tonic action and intervening to impose new plans if necessary. * Monitoring Monitoring is the process of measuring actual performance against planned performance. Monitoring in volves the measuring of all aspects of operations, from supply chain management and the use of inputs, through to transformation processes and outputs. Controlling Control occurs when KPIs are assessed against predetermined targets and disciplinary action is taken if required. This means controlling compares what was intend to happen with what has actually occurred. * Improvement Improvement refers to systematic reduction of inefficiencies and wastage, poor work processes and the elimination of both bottlenecks. A bottleneck is an aspect of the transformation process that slows down the overall processing speed or creates an impediment leading to a backlog of incompletely processed products. Outputs Essentially outputs are the result of a businesss efforts the final good or service that is delivered or provided to the consumer * Customer service f a customer expresses dissatisfaction with a product on account of it being defective, not butting timberland expectations, finds wai t times/lead times too long or returns the product or makes a warranty claim, then the operations processes need review. Qantas meets the needs of customers. Also has adopted the net promoter sexual conquest as a key measuring of customer service.Qantas closed loop feedback program enables direct feedback from its 1100 support flyers. * Warranties Warranty claims are made against goods that have defects arising from an issue in transformation. Although a small proportion of warranty claims are false, the number of claims made against a business on a particular product line or product range will give an indication of problems in the processing. Operations strategies * Performances preys Performance objectives are goals that relate to particular aspects of the transformation processes.These objectives or targets will be stack so that the business becomes more efficient, productive and profitable. * Quality consumer expectations, which are used to inform the production standards ap plied by the business often determines Quality. Quality of design, conformance, service. Qantas means consistently producing its services to customer expectations, doing things right. Includes, clean and tidy aircraft, staff are courteous, implemental and friendly and their website is user friendly. * Speed Speed refers to the time it takes for the production and the operations processes to respond to changes in market demand.Speed requires that changes in input levels and processing times can be made in receipt to demand. Qantas customer asking for their service and getting it. Things to increase speed of service are booking flights on line, on-line(a) check in, check in kiosks and Q bag tags. * dependability dependability, as a performance objective, refers to how consistent and unquestionable a businesss products are. Dependability, in respect of goods, refers to how long the products are useful before they fail. Dependability refers to consistency of service standards and r eliability.Qantas time departures and arrivals, Qantas has outperformed its rivals in these statistics its dependability has been seriously eroded in recent age because of mechanical failures, and industrial disputes. * Flexibility flexibility refers to how quickly operations processes can adjust to changes in the market. date and flexibility are related the quicker the processing time the greater the likelihood that processes can be adjusted quickly. Qantas ability to respond to changes in market demand, either by changing the products offered, changing the blend in of products, changing the volume of product or by changing the delivery times.Jet Star is Qantas response to the rival of low cost airlines. * Customization Customization refers to creation of individualized products to meet the specific needs of the customers. Services are generally customized, although aspects of services can be standardized as seen in the fast-food sector. Customization means giving Qantas custom ers more options by varying the product in minor ways. It varies its products by offering jet start and a more no frills alternative and offering different classes of seating. Cost Cost as a performance objective refers to the minimization of expenses such that operations processes are conducted as cheaply as possible. Qantas has interest in keeping their cost as low as is compatible with the levels of part, speed, dependability and flexibility that their customers require. * Supple chain management Supply chain management (SCM) involves integrating and managing the flow of supplies throughout the inputs, transformation processes (throughput and value adding) and outputs to best meet the needs of customers.Supply chain management refers to controlling the flow of supplies though Qantas whole operations process from sourcing the raw materials like fuel to final delivery to and service of the service. change magnitude transaction speed and increased customer satisfaction. Inventory is a major expense in the operations process. Raw materials such as fuel must be sourced and purchased, they must be investment firmd and be available, they must be moved and they must be transformed. * Global sourcing modern operations involve increasing levels of global sourcing obtaining suppliers with out being constrained to local anaesthetic sources.There are some risks involved because of changing exchange rates and coming under laws and customs, which apply in other countries. Qantas has employed some pilots in New Zealand and some cabin staff in Asia at lower wages that paid in Australian and has some engine maintenance carried out in Malaysia on a cost benefit basis. * E-commerce This is simply buying and selling on the internet. This technology has had a major impact on SCM. It has re lay time consuming and costly manual processes of the past.It provides for real time information on Quantity, Quality, availability, source and price of all goods and services to be instan tly accessible from a range of suppliers local and international. * Logistics this is the task of ensuring tat Qantas has al the Physical inputs in the quantities needed in the right place at the right time (e. g. pilots, cabin crew, baggage handling, maintenance and catering) for the operations process (fights) to take place undisrupted and hence at optimum efficiency. * Outsourcing Outsourcing involves the use of outdoor(a) providers to perform business activities.The theory behind outsourcing is that when an external provider that specializes in a particular business function performs a service, it will do so at a lower cost and with a greater effectiveness than the same task done within the business hierarchy. * Advantages of outsourcing for Qantas * Saving capital outlay-factory space and machinery are provided by another business at their expense * Saving in labour-staff management and expenses are born by the other business * Increased dependability- more than one external s upplier can be accessed, thus ensuring security of supply. Saving in cost- the other business can provide the input at a lower price than it can be done in-house. * Access to higher level skills- the other business contains skills that do not exist in-house * Increased flexibility- variations in demand are managed by other business * Saving in management- having set up contracts, management can concentrate only on the tasks it does perform in-house. * Disadvantages of outsourcing for Qantas * Dependency-the operations process is now dependent on another party for supply of inputs failures in that external supply chain can cause major internal disruption and expense. Loss of control and security- there can be harm in control of standards and vulnerability to proprietary and patent data and information accessible by the supplier * Quality- control is no longer exercised over the inputs used by the outsourced supplier * False economy- outsourced inputs can become more expensive over t ime so constant review of the decision is warranted * Cost- the one-off expense of redundancies to staff no longer required is an offset to the savings from outsourcing. Technology Technology in the operations function may be classified according to whether it applies to and improves inputs, transformations processes and outputs or whether it makes the managerial and administrative functions smoother. * starring(p) edge Leading edge technology is the technology that is the most advanced or innovative at any point in time. Operations managers can distinguish their operations processes by utilizing the best available technologies. This can aid businesses to create products more quickly and to higher standards, with less waste, and also help a business to operate more effectively. Established technology Established technology is the technology that has been developed and widely used, and is simply real without question. Such technologies include the use of computers and various soft ware packages in managing business operations and functions. Established technologies are functionally sound and help to establish basic standards for productivity and speed. Qantas was one of a number of airlines who placed advance orders for the new airbus A380, but they opted to make sure they were NOT the airline to receive the very archetypical one. Inventory management inventory refers to the raw materials, work in progress (unfinished goods still undergoing the transformation process) and finished goods held by the business at a point in time. The extent of these holdings is an important operational strategic decision, because they represent significant capital outlay (cost), which is yet to yield revenue. To hold excess quantities adds additional cost on production, but to hold too little can result in disruption to production and loss of sales because customer demand cannot be met.This is more of an issue for manufacturing businesses than for Qantas because they do not sto re product to meet customer demand like a manufacturing one does. Inventory management is the system that manages the ordering, storage and recovery of the material inputs used in production. * Quality management Quality management refers to those processes that a business undertakes to ensure consistency, reliability, safety and fitness of purpose of product. In operations, quality management includes quality controls at each stage of processing.Qantas has marketed as a high quality, perfect safety record, full service airline and commanded premium fares at the other end of the spectrum is jet star which has traded quality for price and markets as a no frill low cost airline. * Quality control programmed inspections are carried out at key stages of Qantas service (on a continuing basis) to ensure the process is meeting specified standards. If not, then management intervenes and corrective action is taken to bring the process back within standards.It attempts to solve the root cause of Quality problems at Qantas * Quality assurance the minimum level of satisfactory quality at all stages of the process is continually monitored at Qantas by actual measurement and comparison against pre-determined standards. It attempts to broaden the organizational responsibility for quality at Qantas. * Quality improvement Maintaining competitive advantage is not only a matter of maintaining quality of output the aim must be to improve quality over time by reducing error, and finding better ways of performing the tasks leading to lower cost or higher quality at the same cost.All staff are invited to participate with suggestions and ideas. It also involves Qantas customers and suppliers. It attempts to make quality both substitution and strategic within Qantas. * Overcoming resistance the change. All businesses are subject to change from the external environment. Legislative and regulative changes, changes in economic conditions, social changes over time and technological bre akthroughs all impact on the business and shape its operations.Moreover, change can also come from within the business through the initiative of staff or the application of technology and a focus on innovation. * Financial costs One major cause of a resistance to change from managers and business owners is that of financial costs. The main financial costs associated with change include the, cost of purchasing new equipment, cost of redundancies, costs of retraining employees, costs associated with structural reorganization of the business, including changes to plant and equipment layouts. Purchasing new equipment Qantas plan to spend $US 22 billion in new technology and equipment between 2011 and 2018. * Redundancy costs to implement staff reductions incurs mandatory redundancy payments to the workers retrenched. The alternative to redundancies is to bank on attrition and recruit casual and part time workers. * Retraining costs significant change incurs retraining expenditure. The adoption of the new reservation system, introduction of new business class, annual security training and engineering and maintenance for are aircraft. Plant layout cost acquiring new aircraft requires re-organization of maintenance operations to seek increased capacity and efficiency. Jetstar is replacing Boeing 717s with airbus A380s so a new heavy maintenance base becomes necessary because the existing one cannot accommodate the larger planes. The A380 also requires refurbishment of the Qantas Jet base. * Inertia the unenthusiastic response of some managers, some staff and even some of the owners is an impediment to change and will be discernable and will have to be overcome.