2.4 Flashcards
What is production
The process of making or manufacturing goods and products from raw materials
What is job production + adv, dis
Manufacturers produce one product at a time as ordered by the customer
High quality product
Motivated and highly skilled workers
Customised products can be produced
Production is slow
Labour costs are high
Flow production defintion + adv dis
Continuous manufacturing of standardised products, usually on a production line
Low unit costs due to economies of scale
Rapid production
Usually highly automated (capital intensive)
Customisation is difficult
Capital equipment can be expensive to purchase
Batch production defintion + adv dis
Groups of the same product are produced as a batch e.g. 1000 Blueberry muffins
Workers can specialise
Production can take place as the previous ‘batch’ starts running out
Requires careful coordination to avoid shortages
Money is tied up in stock
Completed products need to be stored
Cell production def + adv
Invloves producing a familt of products in a small contained unit (cell) within a factory eg Tailor made suits
Group working allows ideas to be generated within cell to improve effieceny -kaizen + group work motivation - mayo
What is productivity / labour productivity definitions
Productivity is the output per input (person or machine) per hour
The labour productivity of a business is measure of the output per worker during a specified period of time
Labour productivity is calculated using the formula-
Output /Number space of space Workers
how motivation of employees affects productivity
Motivated workers tend to be more productive
Financial incentives linked to output may increase worker productivity
Non-financial incentives may include workers in decision-making, increase their commitment and productivity
How capital productivity influences productivity
Increased automation can improve levels of output and quality
Well chosen machinery is less likely to make mistakes than humans
Machinery and technology can operate for long periods without a break as long as it is properly maintained
How specialisation influences capital productivity
Workers are able to focus on a few or even one task so becoming more effienct and so productive
How education and training influences productivity
Skilled staff can produce things faster, while experience brings knowledge of how to complete tasks effiently to a high quality
How labour flexibility influences productivity
Allows companies to make decisions about their labour force in response to market changes and help boost production
How working practices influences productivity
Practices such as flexible working hours increases workers motivation and so productivity
What is standardisation + how it affect efficiency
Occurs when all staff use the same components and techniques in the production process
Training of workers is minimised
Bulk-buying of components reduces variable costs
Production lead time is reduced
BUT customisation of products is not usually possible
What is relocating or downsizing and how does it affect efficiency
Moving production to a cheaper or smaller location can reduce fixed costs
Labour-intensive businesses may look for lower wage locations
Capital-intensive locations may look for lower rents or land costs
However, relocation is very disruptive and will incur significant short-term costs
What is investing in new machinery + how it affects efficiency
Purchasing or upgrading machinery and technology can increase the rate of output, lower costs and improve quality
What is organisational restructuring and how does it affect efficiency
Reducing the level of staff or reorganising staff can better match labour to output needs
Delayering reduces labour costs as levels of management are removed
Redeployment can motivate workers by providing opportunities for staff to take on a new role which will develop their skills and experience
What is outsourcing and how does it affect efficiency
Tasks may be given to other specialist businesses that can complete it at a lower cost
Outsourcing allows a business to focus on improving the efficiency of its core competences
What is adoption of lean techniques and how does it affect efficiency
An approach to production that involves the reduction of all types of wastage (time, resources and space)
Kaizen means that improvements are made continuously
Just in Time involves the holding little or no stock which minimises storage costs
What is kaizen and how does it affect efficiency
Kaizen is about decreasing waste by eliminating overproduction, improving quality, being more efficient, having less idle time, and reducing unnecessary activities. All these translate to cost savings, and can turn potential losses into profits.
What is JIT and how does it affect efficiency
By recieving inventory as they are needed for production, thus cost of storage falls and so efficiency increases
Difference between labour and capital intensive
Labour-intensive production predominantly uses physical labour in the production of goods/services
The delivery of services is usually more labour-intensive than manufacturing
In countries where labour costs are low (e.g. Bangladesh) labour-intensive production is common
Small-scale production is likely to be labour-intensive
Capital-intensive production predominately uses machinery and technology in the production of goods/services
Large-scale production of standardised products is likely to be capital-intensive
Manufacturing in developed countries where labour costs are relatively high is likely to be capital intensive
Capital intensive pros and cons
Low-cost production where output is high
Machines are usually consistent and precise
Machines can run without breaks
Significant set-up and maintenance costs
Breakdowns can severely delay production
May not provide flexibility in production
Labour intensive pros and cons
Low-cost production where labour costs are low
Provides opportunities for workers to be creative
Workers are flexible (e.g. they can be retrained)
Workers may be unreliable and need regular breaks
Incentives may be needed to motivate staff
Training costs can be significant
What is capacity utilisation + formula
Capacity utilisation is measure of the level to which a businesses assets are being used to produce output
It compares current output to the maximum possible output a business can produce using all of its assets and is expressed as a percentage
( Current output/ Maximum Possible Output ) x 100