2.4 Flashcards

1
Q

What is production

A

The process of making or manufacturing goods and products from raw materials

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2
Q

What is job production + adv, dis

A

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

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3
Q

Flow production defintion + adv dis

A

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

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4
Q

Batch production defintion + adv dis

A

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

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5
Q

Cell production def + adv

A

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

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6
Q

What is productivity / labour productivity definitions

A

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

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7
Q

how motivation of employees affects productivity

A

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

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8
Q

How capital productivity influences productivity

A

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

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9
Q

How specialisation influences capital productivity

A

Workers are able to focus on a few or even one task so becoming more effienct and so productive

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10
Q

How education and training influences productivity

A

Skilled staff can produce things faster, while experience brings knowledge of how to complete tasks effiently to a high quality

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11
Q

How labour flexibility influences productivity

A

Allows companies to make decisions about their labour force in response to market changes and help boost production

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12
Q

How working practices influences productivity

A

Practices such as flexible working hours increases workers motivation and so productivity

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13
Q

What is standardisation + how it affect efficiency

A

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

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14
Q

What is relocating or downsizing and how does it affect efficiency

A

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

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15
Q

What is investing in new machinery + how it affects efficiency

A

Purchasing or upgrading machinery and technology can increase the rate of output, lower costs and improve quality

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16
Q

What is organisational restructuring and how does it affect efficiency

A

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

17
Q

What is outsourcing and how does it affect efficiency

A

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

18
Q

What is adoption of lean techniques and how does it affect efficiency

A

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

19
Q

What is kaizen and how does it affect efficiency

A

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.

20
Q

What is JIT and how does it affect efficiency

A

By recieving inventory as they are needed for production, thus cost of storage falls and so efficiency increases

21
Q

Difference between labour and capital intensive

A

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

22
Q

Capital intensive pros and cons

A

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

23
Q

Labour intensive pros and cons

A

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

24
Q

What is capacity utilisation + formula

A

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

25
Drawbacks of over utilisation
Staff will be under a lot of pressure to produce high levels of output Overworked staff may be inclined to leave increasing staff turnover Machinery may be pushed to its limits and prone to breakdowns which disrupts production and increase costs
26
Benefits of over utilisation
High capacity utilisation will minimise average total costs and increase business competitiveness If workers are busy they are likely to feel secure in their employment A business that is busy is likely to be well thought-of and is likely to attract customers who are willing to wait for products to be delivered
27
3ways of improving capacity utilisation
1. Increase usage - encouraging sales when demand is usually lower stabilises capacity utilisation - but prices may need to be lowered 2. Outsourcing - subcontracting some tasks to outside business can increase the level of output - but profit margins may be reduced 3. Reduce capacity - sell fixed assets or reduce staffing to remove excess capacity - but flexibility to respond to increased demand is reduced
28
On a stock control diagram what is the - Maximum stock level The reorder level Minimum stock level Lead time
he maximum stock level is the maximum amount of stock a business is able to hold in normal circumstances The reorder level is the level at which a business places a new order with its supplier The minimum stock level is also known as the buffer stock level and is the lowest level to which a business is willing to allow stock levels to fall The lead time is the length of time from the point of stock being ordered from the supplier to it being delivered
29
adv and dis of buffer stock
Stability in supply Buffer stocks ensure a stable supply of goods which is able to respond to unexpected customer demand leading to competitive advantage of having a reputation for being reliable BUT Cost Holding buffer stocks can be expensive, as it requires storage facilities and inventory management systems Opportunity cost Holding buffer stocks ties up capital that could be invested in other areas of the business
30
2 adv and 2 dis of JIT
Stockholding costs including storage costs are minimised Cash flow is improved as money is not tied up in stocks BUT Bulk buying economies of scale are not generally possible The ability to respond to unexpected increases in demand is reduced
31
How does lean production lead to competitve advantage
Lower unit costs are achieved due to minimal wastage so prices may be lower than those offered by competitors Better quality of output is likely as a result of supplier reliability and carefully managed production processes
32
What is quality control + 2adv and dis
Inspecting the quality of output at the end of the production process ADV Quality specialists are employed to check standards An inexpensive and simple way to check that output is fit for purpose DIS The rejection of finished goods is a significant waste of resources There is little focus on the cause of defects
33
Quality assurance def + 2adv 2 dis
Inspecting the quality of production throughout the process ADV Quality issues are identified early so products may be reworked rather than rejected The cause of defects is the focus so future quality issues may be prevented DIS Staff training and a skilled workforce is required so labour costs may be increased Reworking may lengthen the production process
34
Quality circles def + 2adv 2 dis
Groups of workers meet regularly to solve quality problems identified in the production process ADV Workers may be motivated as they are involved in decision making Relevant and focused solutions are likely as workers are familiar with processes DIS Management need to have trust in workers’ views and solutions Meetings and structures must be organised regularly
35
Define Total quality management 2 adv 2 dis
Organisation of the business with quality at its core and with every worker responsible for quality ADV Quality in all aspects of the business improves efficiency A culture of constant improvement exists within the business DIS All workers must be committed and receive significant continued training Careful monitoring and control is required
36
2 competitve advantages from quality management
Unit costs are likely to be low if a business takes a preventative approach through the use of quality assurance or TQM Low costs may allow a business to reduce its selling price to better compete with or undercut its rivals Successfully developing a USP for quality can ease expansion into new markets as a result of the positive reputation it creates