2.4 Resource Management Flashcards
production and types
primary industry- land and tractor
second industry - wood plastic glue, labour
tertiary industry - services
job
batch
flow
cell
what is job production
production of a single product at a time
products are bespoke
eg: cakes, wedding dresses, large ships
found in manufacturing and service industries
+ quality is high because workers are skilled
+workers motivated because work is varied
+charge high price
-high labour costs
-production may be slow; long leaf time
what is batch production
demand for product is regular
production divided into a number of operations, particular operation is carried out on all products in a batch then moves onto next operation
eg: furniture, armchairs with same design and baker
+ workers are likely to specialise in one process
+ production is flexible since different orders can be met
- careful planning and coordination is needed
- less motivation because workers specialise
- money may be tied up in work-in-progress
what is flow production
different operations can be carried out one after the other in continuous sequence
production of large quantities of standardised product
large amounts of machinery and equipment
eg: newspapers, food
+ very low unit costs due to economies of scale (large raw materials)
+ out put produced quickly
+production speed can vary based on demand
-huge set up costs
- repetitive tasks lower motivation
-breaks can cause huge expense
what is cell production
divides workplace into cells. each cell occupies an area of the factory and focuses on the production of a product family (group of products which require a sequence of similar operations)
+floor space increased because cells use less space
+lead times cut
+less work-in-progress
productivity
is the amount of output that can be produced with a given input of resources
labour productivity- output per worker per period of time
capital productivity- output/amount of capital employed in a given period
ways to increase productivity
specialisation and division of labour
education and training
motivation of workers
labour flexibility
capital productivity - spend money on new technology
efficiency + factors influences efficiency
making best possible use of all a businesses resources
use costs as an indicator of efficiency
introducing standardisation- using uniform resources and activities or producing a uniform product. applied to tools, components, equipment etc BUT can be somewhat inflexible as customisation is more difficult
outsourcing specific activities
investing in new technology
lean production (developed by Toyota) aims to use fewer resources in production (factory space, materials, stocks, labour, capital, time)
= raises productivity, reduce costs and cut lead times, reduce defective products, improves reliability
(eg: JIT, cell production, team working, Kaizen)
Kaizen production
“continuous improvement”
workers are always coming up with ideas to improve quality, reduce waste, increase efficiency
Just in time production
minimising/ eliminating the amount of stock held by a business= reduce all costs
differences with labour and capital intensive production
labour intensive - using larger proportion of labour than capital
+ people are creative = solve problems and make improvements
+ more flexible to changes
- people can be unreliable
- need motivation
capital insentive- involving employing more machinery relative to labour
+ can operate for long periods of time
+ more precise and consistent
- set up costs
- delays if machinery breaks down
depends on:
nature of the product
prices of the two factors
size of the firm
capacity utilisation
use that a business makes of its resources.
not able to increase output = full capacity
but may not be possible because cant keep all resources and machinery fully employed all the time + not full = can be flexible to cope with increased orders
calculation capacity utilisation
current output/ maximum possible output x 100
outcome of under utilisation
have experienced a drop in demand
= may not be making most of its resources and unit costs are not minimised
BUT would be able to cope more easily with sudden increases in demand and less work related stress = reduce sickness and absenteeism
outcome of over utilisation
average costs are lower
BUT resource can be over utilised as resources are stretched uncomfortably
- pressure of constantly working = strain on resources = absenteeism , risk of accidents and machines overworked (very bad for flow production)
- cant respond to an increase in demand
- insufficient time for staff training and maintenance work
ways of improving capacity utilisation
reduce capacity - by rationalising; reducing excess capacity and getting rid of resources that are not needed
- reduce staff
-sell unused fixed assets
- move premises
increase sales = will have to produce more
outsourcing- hiring other businesses ton complete work
redeployment
what is stock
raw materials and components
work in progress
finished goods
buffer stock - emergency stock held incase there is a stock shortage to meet increased demand
implications of poor stock control
holding too much:
storage
opportunity cost- capital tied up in stocks earn no rewards, money could of used for something else
spoilage costs - stock may deteriorate over time
unsold stock
shrinkage- opportunities of theft
holding too little:
cant cope with increased demand
stock delivery delays
loose discounts on bulk buying
Just in time stock management
part of lean production and kaizen approach
+ improves cash flow as no money tied up in stocks
+ reduce waste and damaged stocks
- lot of faith placed in the realisfiblity and flexibility of suppliers
-lost of bulk buying advantages
- difficult to cope with sharp increase in demand= customers can be let down
waste minimisation
due to failure to control stock adequately
-store goods appropriately
- diligently forecast demand for products
- stock rotation (first in first out)
- adjustable pricing strategies
- quick transportation
competitive advantage to lean production
- raises productivity
-reduce costs and cut lead time - lowers number of defective products
- speeds up design time
what is good quality elements examples
physical appearance
reliability and durability
suitability
after sales service
what is quality assurance and difference with quality control
a preventative approach
inspection is carried out during the production process = can be prevented before final production= proactive task
involves all employees of a business and making them responsible for ensuring quality at all stages
different to quality control- aim to identify defects in the finished product = reactive task
what are quality circles
small groups of workers in the same area of production who meet regularly to study and solve production problems + intended to motivate and involve workers
allow workforce to directly improve nature of the work
only work if they have support of management and employees
