1.9: Operations Management Flashcards
1.9.1: Production, Productivity and Added Value 1.9.2: Methods of Production 1.9.3: Capacity Utilisation 1.9.4: Technology 1.9.5: Lean Production 1.9.6: Quality 1.9.7: Purchasing and Stock Control 1.9.8: Research and Development
What is Productivity
A measure of the level of output against a fixed input (Labour and Capital Productivity)
How do you measure productivity
Labour = Output / No of employees
Capital = Output / Capital Employed
State 3 advantages of productivity
Increased Economies of Scale, Lower Unit Costs and Performance bonuses to workers
State 4 methods of improving productivity
Training, Workplace Reorganisation, Technological Investment and Lean Production
What is Added Value
Increasing the worth of a resource by modifying it in some way.
Value of Output - Value of Input (cost)
State 3 ways you can add value to a good or service
Reducing the price paid for their inputs (raw materials), Raise selling price (depending on elasticity) & Improve Lead Times (Customers will pay premium for faster delivery)
Evaluate Added Value
Helps a firm differentiate which can protect their market share but more training maybe required and it doesn’t always guarantee profit
What is Job Production
A labour intensive one off delivery of a product specified to customer requirements such as Kate M’s wedding dress
State 3 benefits and 3 drawbacks of Job Production
Flexible, High Motivation and High Quality
No EOS, Low Volume and Time Consuming
What is Batch Production
Small Quantities of Identical Products for example: Bakeries
State 3 benefits and 3 drawbacks of Batch Production
Low Cost, Fast Times and Some EOS
Repetitive, Increased Storage Requirements and Machinery breaks
What is Flow (Mass) Production
A continuous process of large volumes of identical products eg: Car Assembly Plant
State 3 benefits and 3 drawbacks of Flow (Mass) Production
Fast, Consistent and Large EOS
Expensive, Repetitive and Job Losses (bad rep)
State 4 factors that influence a businesses choice of production method
Size of Firm, Technological Impact, Labour Impact (what skills are needed to produce the product) and The Level of Demand and Costs (Equipment & Production Costs)
What is Capacity Utilisation
The max no of units a frim can produce with existing resources so it is the extent to which the company’s maximum possible output is being reached
What is the formula for Capacity Utilisation
Actual Output x100 / Maximum Possible Output (As a %)
State 3 problems with Spare Capacity
Idle Staff/Low Motivation, Increased Costs and Under-Utilised Machinery
State 3 ways in which you can solve spare capacity
Subcontract (No P costs but less direct control over quality), Rationalisation (Shrinking) and Increase Asset Use (New Markets and Products and Sales Promos)
State 3 advantages and 3 disadvantages of Full Capacity
Lowers Unit Costs, Economies of Scale and No wastage
Pressure on Machinery, Demotivated Staff and Decline in Quality
State 3 ways in which a firm can manage capacity shortage
Overtime/Longer Hours for staff, Hiring and Building or Extending factories/plants
How does CAD help the manufacturing process
It eliminates human error, lower cost designs speed up development however training is required, software needs updating and it is expensive
How does CAM help the manufacturing and retailing process
Machines are controlled by computers, they can minimise waste and cut costs, they are fast and accurate but it is expensive, inflexible and time due to coding
What is CNC and CIM
CNC is Numerically controlled machines which is given instructions by the operator
CIM is Integrated manufacturing where a computer is used to guide the guide and control production
What is collaborative robotics and how do they help with Manufacturing and Logistics
They have the ability to avoid unwanted collisions (Amazon have Kiva), The bots can function outside of safety cages (work with humans) and provide a second dexterous pair of hands
State 3 ways how technology is used in Manufacturing and Retailing
RFID, Outsourcing (Remote workers) and Internet (Online shopping)
Does Technology actually help
It depends on capability of existing systems and the cost of implementation also the staff
What is Lean Production
The elimination of waste from the production process (waste is anything that doesn’t add value)
State 4 different wastage elements
Inventory (Excess), Waiting (Time), Defects and Over Production
How does a business implement lean production
They have to change philosophy which is not quick, simple or cheap then it requires a cultural change which is re-educating and retraining
What is Just-In-Time (JIT)
Components are delivery when they are required minimising stock but maintaining a close relationship with the supplier. JIT cannot be implemented in isolation
State 3 benefits and 3 drawbacks of Just-In-Time (JIT)
Elimination of Waste, Lower Costs and Greater Flexibility to demand changes
Loss of EOS, Reliant on Suppliers and Expensive
What is Kanban and what are the benefits of Kanban
A system of order cards as a part of a JIT system, the benefit is it is supposed to help limit the build-up of excess inventory
What is Kaizen and what are it benefits and drawbacks
Combining teams of employees to continuously improve the business
Improved comms, Better Quality and More Motivated employees
Requires commitment, Training Cost and Time
What is Time-Based Management
Speed adds value giving a first mover advantage using JIT, Tech and Critical Path Analysis which requires Effective Communication and Training
What is Cell Production
Involves the division of the production line focusing on multi-skilling providing opportunities for job enrichment and enlargement to make a continuous flow
Why does Quality matter
It provides assurance, it sets expectations and its key benefits are reduced waste, customer satisfaction and increased sales
What is the difference between Quality Control and Quality Assurance
Quality Control seeks to inspect out faults whereas assurance aims to have no faults get it right every time (but staff require more training = investment cost)
What is the main problem with Quality Standards
They drive down quality to meet the basic standard, customers look for quality standards marks to decide
What is Total Quality Management (TQM)
Creation of a culture of quality though a quality chain in the workforce, this methods has 4 pillars: Customer Focus, Continuous Improvement, Zero Defects and Shared Responsibility
What is Benchmarking
Measuring your performance versus a competitors performance to identify areas of weakness but it has to be like for like and such data is hard to come by
What is the difference between a Quality Chain and a Quality Circle
Chains aim to integrate both internal and external customers whereas Circles are employees meting to discuss improvement methods
What is Purchasing and Why is it so important
Acquiring external stock for a fee it has to be carefully managed to be a success because a firm will seek to build a relationship with suppliers
What is the difference between Centralised and Decentralised Purchasing
Centralised is one department purchases for the whole business (Quality & EOS’s achieved)
Decentralised is individual department purchasing (Reduced Cost & More responsibility may be motivating)
What factors go into Selecting a supplier and then choosing a supplier
Selection: Flexible, Reliable and Competitive
Choice: Price, Payment Terms, Quality, Capacity, Reliability and Flexibility
What are the 3 main aims of Stock Control
Minimise Levels, Reduce Customer Lead Times and Lower Waste Levels
What are the 4 stages of the Product Design Process
1: Identify the problem
2: Design Solution(s)
3: Develop Prototypes
4: Manufacture (Launch and Review)
What is Product Innovation
Intro of a good or service that is new or significantly improved advantages of this include: Added Value, Increased Market Share and Marketing benefits
What is Process Innovation
Implementation of a new or significantly improved production or delivery method advantages of this include: Reduce Costs, Flexibility and Improved Quality but Job loses and retraining are necessary
