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Operations Examples & Case StudiesRole of Operations ManagementStrategic role of Operations Management – cost leadership, good/service differentiation Cost leadership = Displayed by Apple. Reduced operating costs by outsourcing the majority of its operations to manufacturers in China (Foxconn). Cheaper labour, less money spent on expenses. Also displayed by Ikea. Sources good from low-wage countries (ethical issue) and only offers a basic level of surface. Does not assemble the furniture in-store. Allows Ikea to offer lower prices. InfluencesGlobalisation Apple outsources its operations process to other countries, I.e Foxconn in China. Most of the materials and electronics are developed in other countries. Aldi was created in Germany in 1948. It moved around the world, opening a store in Sydney in 2001. Currently there are over 200 stores across Australia. Global opportunities enticed Aldi to open stores overseas. TechnologyMicrosoft: The market for PC-related tech (hardware/software) is always expanding and changing, and Microsoft must continue to innovate their products to entice customers, also to differentiate products. Quality ExpectationsMountain H20: Customers expect the same tasting water and quality from every purchase. Certified as organic. DICE/EA: Because of previously released products, customers expect high quality products, with a high degree of customer support and community support from the company. This company has continually tried to raise the quality of products by conducting surveys and trial periods (BETAS) Cost-based competition Virgin airlines, tiger airways and Qantas: Competing against each other to supply a low-cost product to attract customers. Government policies & Legal RegulationsGovernment may increases taxes for a business, making the production of goods and services more expensive. Government can also ban some products. Mountain H20: The carbon tax was introduced, and the weights of all bottles had to be reduced (less weight, less waste). All water produced must also comply with quality standards set by the Food standard of Australia and New Zealand.CSR + Environmental sustainabilityMountain H20: Runs a program called ‘Thank you Water”. Where water is donated to organisations that require support, usually communities in third-world countries. E.g the red cross. EXAMPLE: Billabong demonstrates CSR by constantly ensuring its activities are complying by often changing government policies and laws + regulations Operations ProcessesInputs Mountain H20: Uses a number of transformed and transforming resources as inputs. EXAMPLES – Plastic bottle preforms, 36 different bottle labels, 6 different bottle caps, fresh spring water sources. Transformation Process Mountain H20: Water is transported from springs, then tested for quality in a labPlace in tanks, then pumped into a filtration system Filtered through a membrane, treated with oxygen, treated with UV lights. Preforms are heated to 105 deg, placed inside a mould to form the bottles shape. Pressurised air is blown inside the preform to create the bottle shape. Bottles are then labelledFilled at a rate of 60 bottles every 1.5 minutes. Capped then weighed, etched with a use by date, then boxed and placed on pallets for transportation. Technology - Process of automated by machines, fully reliant on techPlant/process layout – Plant is laid out in a way that all components are needed to create the final product. All production lines in the end product the final product. Control, quality, improvement – Quality control system in place. 4 V’s for Mountain H20: Volume: Produces approx. 25000 bottles every hour. Variety – Labels many different bottles to sell to different companies. All the same products however (water).Variation in demand – No variation, only small amounts Visibility – Factory setting with no storefront. 4 V’s: Volume (Coca-Cola), Variety (Dressmakers, Jewellery), Variation in demand (EA, shopping during the Christmas season), visibility (banks, online stores). VOLUME: Leapfrog gaming system, more games were available than actual consoles. During the Christmas period, couldn’t keep up with demand. Operations StrategiesPerformance Objectives Quality: Mercedes Benz looks at the high quality expectations of customers to create a high quality good. This satisfies the target market, achieving the performance objective. Dependability: A company like EA has recently let down its customers in the past few years with buggy products, failed releases and an emphasis on micro-transactions (which has been viewed negatively). Delays have been evident, but have been viewed as positive (more time to produce a high quality good.). EA must change and develop high quality good to increase its dependability as a company. Customisation: Alien ware has high customisation, customers are able to change the parts inside their laptops, its colour scheme and apps installed. This caters towards customer’s individual wants/needs. New product of service design and development New products are developed to entice and attract customers. Apple: Develops new products (iphones every year) and innovates (ipads) DICE: New games ever 2 years (Battlefield, New Star Wars game) Supply Chain Management Mountain H20: Sources resources from springs and the preforms from a company in Sydney. Transports the finished good to distributors via trucks. Outsourcing – advantages& disadvantages Mountain H20: Plastic caps & plastic preforms are created by suppliers in Sydney, shipped down to the business in Albury. Also outsources water from fresh water springs in Myrtleford. Labelling created by a small designer in Albury. TechnologyIGA Norris Park – Using up-to-date computer systems to scan items for customers. Inventory Management Supermarkets use FIFO (first in first out) on perishable goods like fruit. LIFO is used by businesses selling machinery, tools for example. JIT may be used by technology companies. Overcoming resistance to changeGlobal Factors Apple: Outsourcing materials and labour from cheaper countries like China (Foxconn) Most of Apples operation process is based in China. McDonalds – Scanning & Learning: McDonalds now provides customized menus in different menus, based on what ................
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