Hi, I was just wondering if someone would be able to give me any feedback/mark this response. My teacher is great but always forgets to give back the things I submit and I'm worried that I'm falling behind because it's difficult to get feedback and am not sure how to improve. The essay is in reponse to the 2019 HSC Section 4. Any feedback, advice or if theres anything I'm doing well to keep doing would be much appreciated!
Also I wrote it on paper and used voice to text to upload it so ignore if there is any odd errors.
Thank you!!!
Analyse of relationship between performance objectives and operations strategies (20 marks)
Executive summary
The functioning of a business’ operations involves complex processes and tasks being undertaken in order to transform inputs into outputs. This system is supported by a range of operations strategies employed by a business to improve their effectiveness and efficiency, and give them a better chance of success. Additionally, performance objectives are a strategy used within operations to evaluate the performance of the business and identify areas for improvement allowing the business to obtain a competitive advantage and maximise sales. The performance objectives and operational strategies have a highly interdependent relationship as they were cooperatively to allow the business to achieve success. The close relationship between performance objectives and strategies has been demonstrated by businesses such as Apple, Amazon and McDonald’s. In particular the relationship between outsourcing and cost, new product or service design and flexibility, as well as supply chain management and speed, allows businesses to increase productivity efficiency and effectiveness, to achieve success.
Outsourcing and cost
The operations strategy of outsourcing has a strong relationship with the performance objective of cost. Outsourcing involves the use of external providers to perform business activities, and is commonly done in offshore locations. This is central to the performance objective of cost, which involves minimising expenses so that operational processes are completed as cheaply as possible as outsourcing is associated with an array of cost benefits. This means it can be used as a means of achieving this objective thus maximising the profitability of the business. For example, outsourcing allows businesses to access cost benefits in foreign locations, such as cheaper labour and regulatory differences. International markets typically have a significantly lower minimum wage than Australia, therefore allowing businesses to minimise costs by outsourcing. Similarly Australia has much more strict and costly business regulations, meaning that by outsourcing businesses can reduce compliance costs as they are not subject to these strict laws such as the Work Health and Safety Act 2011, and also can reduce the risk of costly fines if they fail to comply. To achieve these advantages allowing businesses to meet the cost performance objective, a business may outsource operations tasks, such as manufacturing, to countries with lower expenses such as China, India or the Philippines. Furthermore the interdependent relationship of outsourcing and the cost performance objective is evident as outsourcing can give firms access to skills/resources they lack internally, such as highly skilled and disciplined workers, therefore meaning they can reduce costs by not spending money on internal training and development. overall outsourcing and cost have a close relationship, as they work together to give businesses a competitive advantage and make them more profitable.
Apple
The relationship between the strategy of outsourcing and the cost KPI is illustrated by the operations processes of Apple. Apple is an American multinational technology company that designs and sells user-friendly consumer electronics. Apple uses outsourcing to reduce costs associated with domestic property/facilities, high US labour costs, training expenses and costly legal compliance. For example, the manufacturing of products such as iPhones, iPads, and MacBooks is done by third-party companies, primarily located in China, Taiwan, and other parts of Asia. Key partners including Foxconn, Pegatron, and Wistron are responsible for these functions, each handling different stages of production independently, allowing Apple to target the cost performance objective by leveraging off of inexpensive offshore locations, thus allowing them to establish cost leadership. The evidently indivisible relationship between outsourcing and cost assists Apple in achieving success by reducing operational expenses, improving their profitability and competitive advantage.
New product or service design and flexibility
The strategy of new product or service design and the performance objective of flexibility also have an interdependent connection as by developing new products. A business is able to improve the flexibility of their product range, thus better catering to consumer needs and tastes, helping them maximise sales. New product or service design and development involves the creative process whereby a business undertakes research, designs, tests, refines, produces and launches a product/service. This operations strategy is heavily connected to flexibility as it is scented around a business’ capacity to meet the changing needs of society. flexibility refers to how quickly operations processes can adjust to changes in the market. The performance objective of flexibility can be attained through new product/service design and development. For example, in order to maintain flexibility in the face of market changes, a business may use the new product/service design and development strategy. This may be done through market research used to determine which products are developed based off consumer preferences. Alternatively, it may be done utilising changes and innovations in technology, allowing the business to stay up-to-date. The interdependent relationship between flexibility and new product or service design allows the business to continually assess and adapt their total product range to meet changes in the market. This has the effect of assisting the business in maximising sales by meeting consumer needs, and gaining a competitive advantage by capitalising off of new innovations, thus contributing to success.
McDonald’s
The close relationship between new product or service design and development has been illustrated by McDonald’s, as they continue to innovate and develop new products and services in order to avoid stagnation and maintain market share, by prioritising flexibility. McDonald’s has strived towards flexibility in response to diverse and evolving consumer preferences in different markets by developing new products. For example, to meet the needs of their Australian market, McDonald’s created seasonal and exclusive to Australia products, such as the NSW blues ice cream and the McOz. Similarly, to cater to the taste of the Japanese market, McDonald’s sold a teriyaki burger in their stores in Japan. By designing and developing these products, McDonald’s has been able to quickly adjust to diverse markets, therefore evidencing the interdependence of flexibility and new product design and development. Additionally the significant relationship between flexibility and new service design and development is demonstrated by McDonald’s drive-through system which was first introduced in the US in 1975, and later their implementation of kiosks in stores in 2003. These innovative new services used by McDonald’s allowed them to maintain superior flexibility, having a positive impact on the business by; satisfying consumer demands for efficiency, using innovation to gain a competitive advantage, replacing human labour and thus saving wage expenses, and simplifying operational processes.
Supply chain management and speed
The performance objective of speed and the strategy of supply chain management (SCM) also have a significant relationship, as one of the primary focuses of SCM is efficiency. Supply chain management involves integrating and managing the flow of supplies throughout the inputs, transformation process, and outputs, in order to best meet customers’ needs. Therefore speed and SCM are strongly connected as supplies must be transported and delivered efficiently, to meet customers needs by reducing delays. Speed is particularly relevant to the logistics facet of SCM, which involves the distribution of supplies - including transportation, storage/housing, and the handling/packaging of materials. For example, speed is prioritised in distribution processes as by maximising speed a business is able to optimise customer satisfaction, reduce lead times, and save costs by shortening processes. Due to this interdependence between speed and SCM, a business may choose to refine their logistics by choosing a simple distribution channel, such as delivering goods directly from the producer to consumer, to maximise speed by eliminating the handling times of third parties/other stakeholders, to contribute to business success. The importance of the speed objective in SCM is further highlighted by the global sourcing component of this strategy. Global sourcing refers to the purchasing of inputs for the transformation process at a global scale. This is heavily related to speed as when determining a supplier. It is important for a business to assess the timelines of supply and delivery, and the likelihood of delays arising. This allows businesses to maximise speed in SCM, contributing to success by meeting consumer demands and reducing costs.
Amazon
The strong relationship between the speed performance objective and supply chain management is prevalent in Amazon, as the business uses efficient systems and processes to achieve the objective within SCM, which in turn leads to a range of benefits contributing to the success of the business. Amazon is an American multinational company primarily recognised for their e-commerce used for online shopping, and is known to be the world’s largest online retailer. Amazon has prioritised the strong relationship between speed and SCM through their use of “ fulfilment centres”, which are big warehouses with close proximity to major cities. This SCM system allows Amazon to achieve the speed objective by ensuring extremely efficient logistics by streamlining SCM procedures and reducing the physical distance for transportation, allowing them to complete same day delivery. This is a crucial aspect of Amazon‘s business model, and has been a major contributing factor to their success by improving customer satisfaction, and increasing sales as their renowned status of extremely fast delivery attracts customers. Additionally, Amazon has further highlighted the importance of the relationship between speed and SCM by taking measures to maximise the efficiency of their warehousing. For example, Amazon uses data to predict demand in order to maintain inventory, achieving the speed objective by eliminating the risk of inventory shortages, which would cause delays. Furthermore they also use warehouse robotics as opposed to human labour to ensure logistical efficiency within their SCM. Overall, the systems in place with the SCM of Amazon demonstrates the strong relationship between speed and SCM, which works to ensure the success of the business.
Conclusion
To conclude, the performance objectives and operations strategies have an extremely strong relationship, by cooperating to improve the performance of a business, thereby contributing to their success. Outsourcing and cost have a close relationship as outsourcing business tasks invites significant cost opportunities. New product/service design and development and flexibility also have a close relationship as this strategy is used by businesses to achieve flexibility by continually evolving their total product range. Finally, supply chain management has a strong relationship with speed as efficiency is crucial to the effectiveness of this strategy.
