2.3.1 Business Operations Flashcards
Production processes:
methods of businesses providing goods and/or services which are made to meet customer wants/needs and are produced to a high enough standard
The purpose of business operations:
- to provide goods
- to provide services
Job production:
when individual products are made one at a time to meet specific customer preferences
Pro’s of job production:
- Employees may gain enjoyment from using their specialist skills
- High profit margins for bespoke products
- Focus on customer needs and individual service
- Can customise orders
- Workers involved in entire production process from start to finish
Con’s of job production:
- Highly skilled staff are required, which increases costs
- Highly skilled staff may not be available, which can make training staff/recruiting staff very expensive
- Longer production process - longer time
- Investment in machinery may be higher as specialist equipment may be needed
- Production costs likely to be high – economies of scale
Batch production:
batch production involves making a set quantity of identical products
Pro’s of batch production:
- Can produce larger volume of products than job production
- Can be partially automated
- Able to make a variety of sizes or flavours
- Allows some flexibility in production
- Inventories of part-finished goods can be stored and completed later
Con’s of batch production
- As batch production is not fully automated, costs may be higher than in flow production
- Not as flexible regarding customers’ tastes as job production
- Making many small batches can be expensive
- If production runs are different there may be additional costs and delays in preparing equipment
- Productivity reduced when switching between batches
- Semi-skilled workers
Flow production:
- involves continuously making identical products
- this allows the production process to be heavily automated
Pro’s of flow production:
- Able to make far larger quantities
- High volumes and low margins (with high productivity)
- Consistency in production means products are identical, which means customers know exactly what they are buying - standardised production
- Highly automated process – automated assembly lines saves time and can decrease costs
- Economies of scale can be achieved as cost per unit will be low
- Quality systems can be built into the production at each stage
- Lower skilled workforce required - lower costs
Con’s of flow production:
- In competitive markets for similar mass-produced goods, profit margins can be very low
- Customers like products that are tailored to their specific preferences - flow production can’t do this
- High initial set-up costs of automated assembly lines – high costs to buy machinery
- Standardised product produced
- Workers may find work repetitive and boring
Impact of different types of production:
keeping productivity up and costs down and allowing for competitive prices
How can a business improve productivity?
- Investing in up-to-date machinery – this can help workers to produce more products in the same length of time - it can also reduce the need for employees by replacing them withautomatedmachinery
- Providing incentives to encourage workers to work harder and faster – there are several ways this can be achieved, such as throughpromotion opportunities or pay incentives
- Providing training to staff to improve their skills so they can work more efficiently - encouraging staff to come up with time-saving ideas that allow them to work more efficiently – many businesses have suggestion boxes where staff can provide ideas on how the business could operate better
Impact of technology on operations:
- speeds up the production processes
- keeps businesses in touch with their customers
- faster production processes
- ensures fewer mistakes and defects
- can involve a costly initial development
- can quickly become obselete
- requires employees to be trained to use new technology
Technology used in business operations:
- computer-aided design (CAD)
- supply chain management (SCM)
- geographical positioning systems (GPS)
- electronic point of sale (EPoS)
- 3D printing
- E-commerce
Productivity:
- output per worker
- it measures how much each worker produces over a period of time
How can productivity be improved?
productivity can be improved by increasing output or by lowering the costs of production (inputs) while maintaining output
Economies of scale:
- the situation where average costs of production fall as the volume of production increases
- advantage as businesses grow in size
How can technology impacts costs of production?
Technology costs money to purchase, but reduces the cost of producing products
How can technology impact productivity in production?
- Using machinery to mechanise or automate parts of the production process leads to an increase in productivity
- This means a business can either reduce its prices to increase its competitiveness in a market or increase its profit margins
How can technology impact quality in production?
- Businesses need to be consistent in the quality of the products they produce
- Mechanising or automating parts of production can help with this
How can technology impact flexibility in production?
- Businesses often need to balance technology with human flexibility
- Automation is good for mass production but it doesn’t work so well for products that will be personalised to meet individual customers’ preferences
