3.4.3

Question 1

What are 3 ways a business can increase its capacity?

Answer 1

1. Sub-contract our production to another business
2. Offer overtime pay to the workforce
3. Employ workers on temporary contracts

Question 2

What are 2 ways a business can decrease its capacity?

Answer 2

1. Rationalisation( redundancies or sale of assets)

2. Subcontract in work from another business

Question 3

What is a labour intensive production process? 4

Answer 3

High level of human input into the production process

1. Highly specialised
2. personal
3. service industry
4. high level of skill required

Question 4

What is a capital intensive production process? 3

Answer 4

High level of capital investment into the production process

1. Mass production
2. Standardisation
3. Efficient production

Question 5

What happened to labour cost per unit when they labour efficiency is increased?

Answer 5

The labour cost per unit decreases

Question 6

What are 7 benefits of improved efficiency?

Answer 6

1. Labour productivity increased
2. Unit costs fall
3. Resources such as labour, expertise and time can be reallocated
4. Profit margins increase
5. Improved flexibility across the business
6. Opportunity to explore new ventures
7. Ability to charge low prices therefore improve competitiveness

Question 7

What are the 5 different ways to increase efficiency and labour productivity?

Answer 7

1. Introduce new reward systems (incentive to work harder)
2. New ways of working (more effective designer job)
3. Training (improve skills and motivation)
4. New technology (speed up processes & reduce human error)
5. Better management (improve supervision, direction and leadership)

Question 8

What 3 things may decrease as labour productivity increases?

Answer 8

1. Quality
2. creativity
3. customer service

Question 9

Define lean production

Answer 9

Because when managers reduce waste and therefore operations become more efficient

Question 10

What are the 7 types of waste a business can reduce?

Answer 10

1. Motion – unnecessary movement of people
2. Transport - unnecessary movement of products
3. Inventory – too much stock
4. Defects – faulty products
5. Waiting – for processes to finish before others begin
6. Extra processing – adds unnecessary valueless features
7. Overproduction – hard to sell products

Question 11

What are six ways of reducing waste?

Answer 11

1. Close proximity to each other and resources
2. Designing facilities to minimise movement
3. Using effective stock control systems
4. Adopting quality assurance techniques
5. Meeting the exact needs of customers
6. Using a range of forecasting techniques to match production accordingly

Question 12

What are the 3 lean production methods?

Answer 12

1. Just – in – time
2. Kaizen
3. Lean organisations

Question 13

What is the just – in – time method?

Answer 13

Supply of products and raw materials triggered by demand from customers

Minimises stock levels, frees up resources and capital

Relies on effective communication and systems the process and deliver

Question 14

What is the Kaizen method?

Answer 14

This is a Japanese concept of continuous improvement, for example by making marginal improvement in efficiency, rather than revolutionary improvement

Question 15

What is the lean productions method?

Answer 15

Only use processes that add value and are effective

Remove anything that is not necessary

Question 16

What are the five main difficulties of adopting lean production?

Answer 16

1. What disruptions in production may leave business vulnerable if inventory is empty
2. Creates over – reliance on suppliers to deliver on time
3. Danger of removing processes and features that employees and customers value
4. Pressurises workforce to self check in the motor for work, skills?
5. Kaizen can bring about change that may be resisted by the workforce