2.4 Flashcards
Definition of Production
The transformation of resources into finished goods
Definition of Job Production
Products are made one at a time
Definition of Flow Production
Continuous manufacturing of standardised products
Definition of Batch Production
Groups of products are produced as a batch
Definition of Cell Production
Where teams are formed to be responsible for a particular part of the production process
3 Advantages of Job Production
-High Quality
-Motivated workers
-Customisation
2 Disadvantages of Job Production
-Production is slow
-High labour costs
3 Advantages of Flow Production
-Low unit cost = economies of scale
-Rapid production
-Usually automated
2 Disadvantages of Flow Production
-Hard to customise
-Expensive for capital equipment
2 Advantages of Batch Production
-Reduced unit costs
-Can be more efficient time wise
2 Disadvantages of Batch Production
-Needs coordination
-High stock of raw materials
3 Advantages of Cell Production
-Greater motivation
-Workers become multi skilled
-More efficient
2 Disadvantages of Cell Production
-High recruitment and training
-Team efficiency needed
Definition of Productivity
The output per input
Definition of Labour Productivity
The measure of output per worker in a specified time
Formula of Labour Productivity
Output / Number of workers
Definition of Capital Productivity
The measure of output of capital employed in a specified time
Formula of Capital Productivity
Output / Number of Machines
4 Factors affecting Productivity
-Employee Motivation
-Skills, Education and Training Staff
-Business Organisation and Practises
-Investment in capital equipment
Definition of Competitiveness
The ability of a business to maintain or grow its sales and market share given the presence and actions of rivals
Definition of Efficiency
The ability of a business to use its production resources as cost-effectively as possible
Formula for Average Cost Per Unit
Total Costs / No. Units
6 Factors Influencing Efficiency
-Standardisation of production
-Relocation or downsizing
-Investment in capital equipment
-Organisational restructuring
-Outsourcing
-Lean production techniques
Definition of Labour-Intensive Production
Predominantly uses physical labour in the production of goods
Definition of Capital-Intensive Production
Predominantly uses machinery in the production of goods
3 Advantages of Capital Intensive
-Low cost production
-Machinery are consistent
-Machinery are precise
3 Disadvantages of Capital Intensive
-High set up and maintenance costs
-Breakdowns cause severe delay
-May not provide flexibility
3 Advantages of Labour Intensive
-Low cost production
-Provides opportunities to be creative
-Workers can be flexible
3 Disadvantages of Labour Intensive
-Workers may be unreliable
-Incentives may need to be given
-Training costs are significant
Definition of Capacity Utilisation
The measure of the level that a businesses assets are being used to produce output
Formula of Capacity Utilisation
(Current Output / Maximum Output) * 100
Definition of Under-utilisation
A business will not be making the most of its resources and have increased unit costs
2 Benefits of Under-utilisation
-Respond to sudden increase in demand
-Engage in maintenance tasks
2 Disadvantages of Under-utilisation
-High unit costs
-Possible fears of job security
Definition of Over-utilisation
A business its operating at a high level of output with the resources it has
2 Disadvantages of Over-utilisation
-No backup if machinery breaks
-Lead to high labour turnover
2 Advantages of Over-utilisation
-Increase competitiveness
-Minimise average total costs
5 Ways of Improving Capacity Utilisation
-Increase sales
-Increase usage
-Outsourcing
-Reduce capacity
-Redeployment
Definition of Buffer Stocks
The quantity of goods kept in case of stock shortages
3 Advantages of Buffer Stocks
-Stability in supply
-Price stability
-Competitive advantage
3 Disadvantages of Buffer Stocks
-Cost
-Risk of obsolescence
-Opportunity cost
2 Problems with holding too much stock
-Opportunity Cost
-Storage Cost
2 Problems with holding too little stock
-Risk of stockout
-Unexpected demand cannot be met
Definition of JIT stock management
The process in which raw materials are not held onsite but ordered as required and delivered just in time
3 Advantages of JIT
-Improved cash flow
-Low stockholding costs
-Teamwork encouraged
3 Disadvantages of JIT
-Unreliable supplies
-Admin costs
-Can’t respond to unexpected demand
3 Ways to Minimise Waste
-Storage (protected and safe)
-Planning (stock control, training)
-Sales Tactics (pricing, obsolete stock)
5 reasons why Lean Production is important
-Less time
-Fewer materials
-Less labour
-Space required reduced
-Small number of trusted suppliers
2 ways Lean Production impacts a competitive advantage
-Lower unit costs
-Better quality
Definition of Quality Control
Inspecting the quality of output at the end of production
Definition of Quality Assurance
Inspecting the quality of production throughout the process
Definition of Quality Circles
Groups of workers meet regularly to solve quality problems identified in the production process
Definition of Total Quality Management
Organisation of the business with quality at its core and with every worker responsible for quality
2 Advantages and Disadvantages of QCo
+Specialists are hired
+Inexpensive
-Significant wastage
-No look for cause
2 Advantages and Disadvantages of QA
+Identified early
+Cause is identified
-Training and skilled workforce
-Time
2 Advantages and Disadvantages of QCi
+Motivation
+Relevant and focused solutions
-Must be trusted
-Meetings need to be organised regularly
2 Advantages and Disadvantages of TQM
+Improves Efficiency
+Culture of constant improvement
-Workers must be committed
-Careful control and monitoring
Definition of Kaizen
The continuous steps to improve productivity through eliminating waste
6 Possible elements of Kaizen
-TQM
-JIT
-Team working and Quality Circles
-Zero Defects
-Automation
-Cooperation between workers and management
3 Ways Quality Management can gain a Competitive Advantage
-Unit costs lower
-Create USP
-Build Reputation
