2.4 resource management Flashcards
what are the 5 steps to resource management?
- design
- establishing the supply chain
- working with suppliers
- managing quality
- achieving high levels of efficiency
what is the process involved in step 1 design in resource management?
Starts by designing a product/ service to meet the needs/ desires of a particular type of customer
what is the process involved in step 2 establishing the supply chain in resource management?
where the collection of materials and parts are made into a final product. Also deciding on what is a waste of money - like production line errors leading to wastage or breakdowns due to faulty maintenance
what is the process involved in step 3 working with suppliers in resource management?
making sure all suppliers reach the business on time and when needed so that products can be sold
what is the process involved in step 4 managing quality in resource management?
providing quality means providing what the customer wants
With effective resource management it requires certain quality objectives, what are they:
- the product/ service must do what the customer has been promised
- it must arrive on time and in good condition
- it must last as long as the customer expects
- customer service should be effective
- after sales service should be effective too.
definition of enterprise resource planning (ERP):
planning that logs all of a firms costs, working methods and resources within a piece of software, this provides a model of the business that can be used to answer questions (such as what is needed for the Christmas period)
definition of supply chain:
the whole path from suppliers of raw materials through production and storage on to customer delivery
what are the 4 methods of production?
- batch production
- mass/ flow production
- job production
- cell production
what is batch production? (where could it be used)
where groups of items are made together. Each batch is finished before starting the next block of goods. For example this could be used in a bakery with loaves
Give 3 pros and 2 cons of batch production:
pros - products are consistent - lower capital costs - met group orders easily cons - time lost between batches - need to keep stocks of raw materials
what is mass/ flow production? (where could it be used)
where identical, standardised items are produced in assembly line. For example this can be sued for manufacturing cars, using conveyor belts and robot arms
give 3 pros and 3 cons to mass/ flow production?
pros- high proportion of machines (no statutory rights)
- less workers salaries
- production costs lower as can be produced overnight/ at weekends
cons - production is inflexible
- workers come demotivated at lack of variation
- huge initial capital investment for equipment
what is job production? (where could it be used)
items are made individually and each item is finished before the next one is started. Its a unique production method which makes customised bespoke products. For example with designer dresses
give 2 pros and 2 cons to job production
pros - product high quality work
- producer meets individual customer needs - tailored requests
cons - labour is intensive
- cost of production of 1 unit is higher
what is cell production? (where could it be used)
Its a form of team working and ensures worker commitment as each cell is responsible for a complete unit of work. For example in technology
give 2 pros and 2 cons of cell production:
pros - workers become multiskilled
- greater worker motivation as more responsibility and team work
- May have to invest in new materials for cell production
- may not allow a firm to use machinery as intensely as flow production
what 5 factors are there when deciding on the production method?
- demand
- type of product
- quantity
- skill required
- finance available
what is the calculation for productivity?
total output/ number of workers
give three ways which productivity can be improved:
- maximise capacity utilisation
- improve training
- machine/ staff/ investment increase
what are three pros and three cons of labour intensive production (human):
pros- more people have jobs - quality could be better - charge higher price cons - expensive to employ people - takes longer to produce - have to tell people what to - time consuming
what are 3 pros and 3 cons of capital intensive production (equipment/ machinery)
pros- less mistakes
- quick to produce lots
- high standard/ quality
cons - really expensive to install machines
- doesn’t employ many people at factories
- machines could fail and stop production immediately
what are 6 different types of economies of scale?
- networking economies of scale
- technical economies of scale
- marketing economies of scale
- managerial economies of scale
- financial economies of scale
- purchasing economies of scale
what are examples of diseconomies of scale? (4)
- poor communication
- co-ordination problems
- low motivation
- company comes too big too quickly and overtrade
what is the importance of productivity?
The output per employee is a very important measure of a firms performance. If the productivity increases then the labour cost per unit will fall
what 3 factors influence productivity?
- the level of investment in modern equipment
- the ability level of those at work
- improve employee motivation
Difficulties of increasing productivity:
Many managers don’t focus on productivity, many focus on profits or efficiency.
what are 3 factors influencing efficiency?
- level of wastage in the production process
- whether the right technology is being used
- whether managers have achieved the right balance between the variable factors that affect efficiency
barrier to entry definition:
factors that make it hard for new firms to break into an existing market
Gross domestic product definition:
the value of all the goods and services produced in a country in a year
job enrichment definition
giving people the opportunity to use their ability
lean production definition
focusing on minimising wastage of resources throughout the supply process
why does a capacity in a business change? (5)
- technology improvements with innovation
- trends
- demand
- price change
- seasonal
what is the calculation of capacity utilisation?
(actual capacity/ max capacity) x100
what are three ways a firm may measure the quality of operations?
- returning customers
- number of returned items/ products
- customer reviews
why is a returning customer a good measure of quality?
It shows that customers are likely to have enjoyed their previous visit and are becoming loyal to the brand
Definition of capacity shortage:
The capacity of a business which isn’t enough in a given period
Why does subcontracting help a business’ capacity utilisation problems?
It means the business can employ more people to get the job done so that the business can meet demand
Definition of a non-standard order:
orders for products which a business doesn’t usually produce
What are three ways a business can increase its capacity to supply the non standard order:
- improve technology used
- employ more workers
- Go to 100% capacity utilisation for a while
Definition of capacity utilisation:
It measures a firms output levels as a percentage of the firms maximum output level
Give 2 reasons why capacity is important:
- Difficult balance between using your factory capacity efficiently and having room to go higher with high orders
- capacity may need to be increased to meet demand and if it doesn’t it will lose market share. However a capacity increase can take years to develop so a business needs to be careful that it will actually be needed after that time
what are 3 factors which capacity depends on:
- Quantity of buildings
- machinery
- labour available
What are 3 risks of over-utilisation of capacity
- If demand rises further, you will have to turn it away, enabling competitors to benefit
- struggle to service machinery and train staff. this may be costly in the long term
- Employees feel demotivated and stressed as they are over worked
what are 2 risks of under utilisation of capacity:
- fixed costs don’t change depending on output, then when under utilised fixed costs will become a huge burden
- Its inefficient
what are 3 ways of improving capacity utilisation:
- increase in demand - marketing
- have some downtime for machinery - for maintenance
- rationalisation - reorganising in order to increase efficiency
What are three ways a business can operate above full capacity:
- overtime
- employ more staff
- update technology
what is the definition for downtime:
any period when machinery is not being used in production, some downtime is necessary for maintenance but too much may suggest incompetence
excess capacity definition:
When there is more capacity than justified by current demand
Definition of rationalisation:
reorganising in order to increase efficiency. This often implies cutting capacity to increase the percentage utilisation
subcontracting definition:
where another business is used to perform or supply certain aspects of a firms operations
What are the three types of stock?
- raw materials and components
- work in progress
- finished goods
what are the four lines usually shown on a stock control chart, and what do they mean?
- stock levels - how they change over the time period
- Maximum stock level - shows the largest amount that the firm is willing/ able to hold
- re-order level - when stocks fall to this level, a new order will be sent to the supplier. it is reached before the delivery as the supplier will need some lead time
- minimum stock level - want to keep a min level so there is something to fall back on if supplies fail to arrive on time
What four things can too much stock lead to?
- opportunity cost
- cash flow problems
- increased storage costs
- increased stock wastage
what three things can too little stock lead to?
- lost orders if customer orders cannot be met
- worker downtime- delayed products from suppliers
- loss of the firms reputation
what does lean production do?
- creates higher levels of labour productivity
- requires less stock, less factory space and less capital equipment than a mass producer of comparable size
- creates substantial marketing advantages - far less defects, improving quality and reliability for the consumer
what is the definition of buffer stock?
the desired minimum stock level held by a firm just in case something goes wrong
what is the definition of competitive advantage?
a feature that gives ones business an edge over its rivals
what is the definition of competitiveness?
the extent to which a firm can stand up to or beat its rivals
what is the definition of opportunity cost?
the cost of missing out on the next best alternative when making a decision
what is the definition of stockholding cost?
the overheads resulting from stock levels held by a firm
what are three methods of improving quality?
- quality control
- quality assurance
- total quality management
what is another name for continuous improvement?
kaizen
what are two elements to kaizen?
- most kaizen improvements are based around people and their ideas rather than investment in new technology
- Each change on its own may be of little importance, but if hundreds of small improvements are made the cumulative effects can be substantial
why should a business hold high levels of stock? (4)
- if there’s a problem with the supplier, the business will still have stock (buffer stock)
- meet demand
- bulk buying - benefit from economies of scale
- if there’s a cash flow problem, they can hold off buying a product for a while until the flow is resolved.
What is the overall objective to stock control charts?
is to maintain stock levels so that the total costs of holding stocks are minimised
what are two effects of stock out?
- lower revenue as no produce can be sold
2. lower customer satisfaction
what is the quality control definition?
a system of maintaining standards in manufactured products by testing a sample of the output produced against what was required. it is checking the product for faults, they can either test every product, samples from a batch or random samples
what are two advantages of quality control?
- inspection helps faulty products from reaching the markets and therefore preventing negative reviews or complaints
- helps find wide spaced problems from across the organisation
what are two disadvantages of quality control?
- individuals who produced the work aren’t encouraged to take responsibility if there is a fault
- rejected products are expensive for the business as they have paid the full cost of production but may not be able to sell it.
what is the definition quality assurance?
The process which ensures production quality meets the requirements of customers. its approach is to achieve quality the first time with little room for mistakes, known as the zero defect approach
what are two advantages of quality assurance
- costs are reduced as there is less wastage as products are constantly checked
- help improve worker motivation as they have more ownership and recognition for their work
what are two disadvantages of quality assurance?
- can be expensive as workers constantly test their products so produce less
- takes lots of time to complete
what is the definition of a quality circle?
when groups are brought together to identify potential improvements. its a management technique which uses employees to solve problems related to their own job
what are two advantages of quality circles?
- increased employee motivation as they help solve problems and are listened to with their ideas
- increased team work
what are two disadvantages of quality circles?
- could be conflict with two opposing ideas
2. may not come up with any ideas and so could be time wasting
what is total quality management?
a method of ensuring quality where everyone in the business is committed to achieving quality. it means the quality is being checked at every stage of the production process so employees check their own work
what is quality benchmarking?
Its a general approach to business improvement based on best practice in the industry. it enables a business to identify where it falls short of the current best and determine what action is required. If its done correctly then it can provide a useful quality improvement target for a business
Give two reasons why quality management is important?
- higher quality adds value
2. ensure all products have the same quality for consumers
what is the importance of quality to a consumer? (2)
- customer loyalty - repeat purchase
2. so they don’t return it - expensive
why has there been an increase in awareness about the importance of improving quality? (2)
- research and development
2. innovation in technology
What are two marketing advantages coming from quality reputation?
- more loyal customers
2. larger market share
what are the four stages of quality management?
- measure quality
- set objectives
- planning decisions
- implement the strategy
what are the costs involved in quality problems in a business? (3
- wastage
- recall of products
- bad reputation
what is the definition for competitiveness?
the extent to which a firm can stand up to or beat its rivals
what is the definition of right first time?
avoiding mistakes and therefore achieving high quality with no wastage of time or materials
what is the definition of a trade off?
accepting less of one thing to achieve more of another
what is the definition of zero defects?
eliminating quality defects by getting things right first time
