2.4 Flashcards
Resource management definition
The process of creating the product or service and delivering it to the customer ensuring the customer needs are met
What are the 5 steps in resource management
Design - product is designed to meet customer needs
Establishing the supply chain - the steps taken to get the parts from suppliers, to the factory and then to the customers
Working with suppliers - need to ensure supplers are reliable
Managing quality - having quality objectivies
Achieving high levels of efficiency - maximising outputs whilst minimising inputs
Factors to consider when picking a supplier
Cost of materials/products
Payment terms
Delivery - speed , cost and reliability
Quality
Availability of necessary quantities
Level of trust/relationship
How will complaints/issues be dealt with
Production definition
The process a product takes from being transformed from inputs to outputs
The key methods of production
Job
Batch
Flow
Cell
Automation definition
Machines/robots do the work
Job production definition
The production of one off items to meet the needs of each individual
e.g. cake maker
Pros and cons of Job production
Pros:
Low set up cost initially
Products can be tailored to suit individual needs
Premium price
High quality
Allows to differentiate from competitors
Cons:
Difficult to achieve economies of scale
Requires skilled labour
Time consuming
Goods are expensive so may limit the market
Output will be limited
Batch production definition
Identical items are produced in groups each item passing through the production process at the same time
e.g. Baker , clothers manufactur
Pros and cons of Batch production
Pros:
Increase flexibility - can vary the product that is produced with the same machinery
Can produce large quantities
Economies of scale
Cons:
Downtime when switching production to a new product
Can be high levels of waste
Flow production definition
Organised so that the items to be made flow round the factory in a continuous process until finished
Cell production definition
Organised into groups and then teams are set at workstations and see a product through to completion
Productivity definition
The output per unit of input per time period
Labour productivity definition
The output per worker per period of time
Capital productivity definition
The output produced per machine over a period of time
Factors affecting productivity
Specialisation and the division of labour
Education and training
Motivation of workers
Working practices
Labour flexibility
Capital productivity
Efficiency definition
Producing a level of output where av erage cost is minimised
Factors influencing efficiency
Introducing standardisation
Outsourcing
Relocating
Downsizing
Delayering
Investing in new technology
Lean production
Kaizen
Pros and cons of capital intensive strategies
Pros:
Generally more cost effective if large quantities are produced
Macinery is often more precise and consistent
Machonery can operate 24/7
Easier to mange then people
Cons:
High set up costs
High delays and costs - high maintance and repairs
Could be inflexible
Pose a threat to workforce and morale
Pros and cons of labour intesnsive strategies
Pros:
More flexible
Cheaper for smaller scale production and place with lower wages e.g. China
People are creative and can help solve issues
Cons:
More difficult to manage
People can be unreliable
Cannot work without breaks and holidays
People sometimes need to be motivated to improve performance
Capacity utilisation definition
The use that a business makes of its resources
Capacity utilisation formula
current output / maximum output x 100
Under utilisation definition
A business is producing less than capacity
Over utilisation definition
A business is running at full capacity and straining resources
Ways capacity utilisation can be increased
Reduce max capacity
Increase sales
Increase usage
Outsourcing
Redeployment
Stock definition
Anything the business keeps that it is going to sell
e.g. raw materials/components , semi finished products and finished goods
Why manage stock
Help manage costs
Meet customer needs
Respond to changes
Will not waste money
Two main ways businesses manage stock
Just in case stock management / bar gate stock graph
Just in time stock control
Buffer stock definition
Extra stock a business has which is emergency stock which the business can use in case there is ever a stock shortage
Lead time definition
The difference between the time when an order was placed and the time the order was received
Maxium level definition
The total amount of stock a business can hold
Minimum level definition
The lowest amount of stock a business can operate with
An amount of stock a business can still use if the reorder is late
Re order level definition
The amount of stock a business has before it reorders it to get it back to maximum before it falls bellow minimum level
Ways to reduce waste in stock control
Proper storage units e.g. refrigerators for perishable goods
Do not overestimate
Use suitable stock rotation methods
Use a computer to manage stock
Reduce prices when products are getting old
Increase transport and delivery speed
Find a good way to dispose of waste
Pros and cons of bar gate stock graphs / just in case-
Pros:
Allows business to meet fluctuations in demand and make sure customers are satisfied
Always has items in stock
Never have to stop making products
Cons:
Has to pay to hold the stock
Perishable stock might go off
Technology products might become outdated
Could be left with products not in demand
Pros and cons of just in time
Pros:
Costs are lower
No wastage as they are ordered when needed
Cons:
Harder to meet fluctuations in demand due to no buffer stock
Will have no stock if suppliers fail
Lean production definition
Production method which aims to use fewer resources in production
Minimise waste
Examples: Kaizen , cell production , flexible manufacturing , JIT stock control , team working and empowerment
Results of lean production
Raises productivity
Lowers production costs
Reduces costs and cuts lead times
Lowers the number of defective products
Improves reliabilioty and speeds up the design time
Quality definition
Features of a product that allow it to satisfty customer needs
How well a product is made
Quality control definition
Making sure the quality of a product meets the specified quality performance criteria
Quality of the product is checked at the end of the process
Benefits of offering high quality
Charge premium prices
Develop competitive advantage
Control costs / less waste
Quality control methods
Quality assurance
Quality circles
Total quality management
Kaizen
Quality circles definition
Small group of workers in the same area of production meet regulary to study and solve production problems
TQM defintion
Business is designed to minimise erros
Manufacturing process is investigated at every stage
Every department organised in a way to make sure they take note of the quality
Pros and cons of TQM
Pros:
Focuses on the needs of customers
Achieve quality in all aspects of the business
Analysis and remove waste in the business
Constant improvement
Cons:
Training and development costs of the new system
Regular audits take a lot of time and administration
Stress is placed on the process not the product
Kaizen definition
Workers at the end of every day say way the business can be improved
Competitive advantage from quality management
Increase sales
Can cut costs if faults are identified early
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