2.4 Resource management Flashcards
What is Batch production?
a method that involves completing one operating at a time on all units before performing the next
-bread production and furniture making
What is Capital intensive?
production methods that make more use of machinery relative to labour
What is the definition of Capital productivity?
the amount of output each unit of capital (e.g. one machine) produces
What is Cell production?
involves producing a family of products in a small self-contained unit (a cell ) within a factory
- furniture manufacture
What is division of labour?
specialization in specific tasks or skills by an individual
What is downsizing?
the process of reducing capacity, usually by laying off staff
What is efficiency?
producing a level of output where average cost is minimised
What is Flow production?
large-scale production of a standard product, where each operation on a unit is performed continuously one after the other, usually on a production line
- e.g. car manufacture
What is job production?
a method of production that involves employing all factors to complete one unit of output at a time
e.g. ship building and construction to making birthday cakes
What is Kaizen?
a Japanese term that means continuous improvement
What is Labour intensive?
production methods that make more use of labour relative to machinery
What is meant by labour productivity?
the amount of output each unit of labour (e.g. one worker) produces
What is lean production?
an approach to operations that focuses on the reduction of resources use
What is outsourcing?
giving work to subcontractors to reduce costs
What is production?
the transformation of resources into goods or services
What is the definition of productivity?
the output per unit of input per time period
What is Specialisation?
in business, the production of a limited range of goods
What is standardisation?
using uniform resources and activities or producing a uniform product
What is production?
-Production takes place when resources, raw materials or components, are changed into finished products.
-Land, labour, capital and enterprise are used in the production process.
-The use of land, and a tractor, to grow crops is an example of primary production.
-Secondary production would be the assembly of parts to make a car in a factory.
-A large part of our economy operates in the tertiary industry. This is defined as ‘bringing a product into being’, ie retail sales and the sales of services such as banking and hair dressing.
What are the advantages of job production?
-quality is high because workers are skilled
-Workers are well motivated because work is varied
-What is Products can be custom made
-Production is easy to organise
What is the disadvantages of job production?
-high labour costs due to skilled workers
-production may be slow - long lead times
-a wide range of specialist tools may be needed
-generally an expensive method production
What is advantages of batch production?
-workers are likely to specialise in one process
-Unit costs are lower because output is higher
-Production is flexible since different orders can be met
- more use of machinery is made
What is disadvantages of batch production?
-more complex machinery may be needed
-Careful planning and co-ordination is needed
-Less motivation because workers specialize
-If batches are small, costs will still be high
- Money may be tied up in work-in-progress
What is the advantages of flow production?
-Very low unit costs due to economies of scale
-output can be produced very quickly
-modern plant and machines can allow some flexibility
-production speed can vary according to demand
What are the disadvantages of flow production?
-products may be too standardised
-huge set-up costs before production can begin
-worker motivation can be very low -repetitive tasks
-Breaks in production can be very expensive
What are the advantages of cell production?
- Less space needed as no need for linear production lines
-Product flexibility improved as areas can adapt their production to meet customization requests
-Team working encouraged as the cell productivity will improve
-Allows pooling of skills workers with particular skill sets can be put to work in areas suiting them
What are the disadvantages of cell production?
-limiting aspirations people may feel they are ‘locked in their cell’ and cant move to other, particularly in low skilled cells
- Loss of awareness workers may feel isolated from other teams and as such not feel part of the organisation
-Waiting on other cells there will be times where production from one cell is required for another to work, delays affect whole business
What is productivity?
-Productivity measures the output, per unit of input, per time period.
-Therefore, output can be increased if productivity is raised. If more can be produced in the same period, or with the same raw materials, then this will make the business more efficient.
-Productivity is measured in 2 ways:
-Labour Productivity
-Capital Productivity
How do you calculate labour productivity?
labour productivity = number of units produced/ number of workers
What can labour productivity calculation tell you?
-By monitoring this measure you can assess the ongoing efficiency of your workforce.
-Whilst this is helpful as a measure of productivity, there are drawbacks. Unless each worker is producing units individually, with no external input, how do you identify the more efficient workers in a group?
-How do you know which workers to include? All staff, or just the ones involved in the process?
How do you calculate capital productivity?
capital productivity = number of units produced/ units of capital
What can the capital productivity calculation tell you?
-It can be easier to identify the productivity of each unit as usually machines can have built in counters that we collate information on production as it goes. Scrap would need to be deducted from this total.
-It would be expected that newer machines would be more efficient, but the business would have to weigh up the cost of the machinery versus the increased output levels
How is productivity linked to competitiveness?
If a business can raise productivity, then this means it can produce more output with the same levels of resources. ie workers can produce more in the same time or you can produce more units from the same raw materials, or both.
The UK has a very poor record on productivity, this is being said to influence our overall competitiveness, particularly in a post Brexit market.
What factors influence productivity?
-Specialization and division of labour
- Education and training
-Motivation of workforce
working practices
-Labour flexibility
-Capital productivity
How does specialisation and division of labour influence productivity?
-focusing on certain products/markets
- better in that area and more productive
How does education and training influence productivity?
- more trained workforce –> produce more quickly
- learning new processes and machines
How does motivation of workforce influence productivity?
-motivation = happier - more productive
- longer, faster and better workforce
How does working practices influence productivity?
-trying new processes and practices to increase productivity –> if some workers come up with a quicker process they get rewarded – ( can lead to more motivation)
-Kaizen
-Marginal gains
How does labour flexibility influence productivity?
- shift pattern or turning the machines off at night and on in the morning
-more efficent if going 24/7 or longer
How does Capital productivity influence productivity?
- machines productivity
-are they more productive then humans
-buy a more efficient machines
-production vs. machines costs
What is the definition of Capacity Utilization?
the use that a business makes of its resources.
What is Excess or Surplus Capacity?
when a business has too many resources, such as labour and capital, to produce its desired level of output.
What is Full Capacity?
the point where a business cannot produce any more output.
What is Mothballing?
leaving machines, equipment or building space unused, but maintained, so they could be brought back into use if necessary.
What is Over-utilization?
the position where a business is running at full capacity and ‘straining’ resources.
What is Rationalization?
reducing the number of resources, particularly labour and capital, put into the production process, usually undertaken because a business has excess capacity.
What is Under-utilization?
the position where a business is producing at less than full capacity.
What is Capacity Utilisation?
-Capacity Utilisation is the use the business makes of its resources.
-If a business is not able to increase output, it is said that they are running at full capacity, and its capital utilisation will be at 100%.
-If a business is able to increase more output and use up more of it’s resources than it currently is, it is said to have excess, surplus or unused capacity.
-Businesses aren’t all able to work at full capacity all of the time, so therefore they aim to operate as close to capacity as possible, at 90% for example.
-In some cases businesses choose to operate at less than full capacity to make themselves more flexible.
How do you Calculate measuring capital utilization?
Capacity utilisation can be measured by comparing actual or current output with the potential output at full capacity.
Capacity Utilisation = Actual Production Level/Maxium Production Level x 100
What are the implications of under-utilization?
-A business may be under-utilising capacity if it has experienced a drop in demand, for example it may have lost customers to a market competitor.
-Some businesses have to deal with seasonal demand where at certain times of year the demand is expected to be low.
-There are both drawbacks and benefits of under-utilisation, and these will be discussed more in the following slides
