3.4.5 Managing inventory and supply chains Flashcards
11 how do you match inventory to meet demand
important aspect of operation
demand stable industries, supply is predictable
demand can vary daily, weekly
managers use several methods to monitor this
11 advantages of producing to order
supply exact customer wishes
reduce inventory holding costs
potentially higher prices
production planning is easier
target mass markets
11 disadvantages of producing to order
fluctuations in produce levels
higher costs
inability to advantage sudden interest in product
uncertainty about production levels
11 advantages of temporary staff
efficient way to lower costs
respond to demand more easily
motivated employees
larger pool of people
opportunity to retain value
11 disadvantages of temporary staff
higher costs of training and admin
less loyalty
11 advantages of outsourcing
react to demand more quickly
efficient in specific activities
focus on core business
non-standard orders can be achieved too
11 disadvantages of outsourcing
quality of product is not under firms control
excess outsourcing erodes operations
cost should be considered
may require transfer of confidential info
11 what factors affect outsourcing
available capacity
expertise
quality
nature of demand
cost, risk level
profit impact
11 what is inventory and stock control
business attitude to risk
importance of speed of response
speed of change within market
nature of product
11 what is buffer level of inventory
stock held to cope with unforeseen circumstances
reaches minimum level it has buffer too
a just-in-time has zero buffer
11 advantages of buffer stock
cope with demand surges
higher customer satisfaction
suppliers delays are not impacting
economies of scale
lead time is shorter
11 disadvantages of buffer stock
increased storage costs
higher risk of damage, theft
risk of waste
no value in stock holding
11 what is re-order level equation?
(lead time x usage) + buffer stock
12 how do you improve operational performance
speed of response
dependability
flexibility
12 how does speed of response improve operational performance
can assess activities simultaneously
increase speed by investing in technology
used as an competitive advantage
speed is not always a main objective though
12 how does dependability improve operational performance
starts and finishes at stated times
important in travel sector
may require ne processes, investment and training
12 how does flexibility improve operational performance
customers have more choice
technological developments improve this
large scale produce while adapting individual items is called mass customisation
higher customer satisfaction, but higher costs of production too
12 how do you match supply with demand
employ flexible workforce
use queuing systems, waiting systems
outsourcing to meet high levels of orders
increase price to reduce demand
accept orders to produce for others when demand is low
produce to order
12 what is B2B
business to business
suppliers who give products to other business
12 what is the supply chain
all the ressource providers throughout every stage of operations
12 what is inventory
the number of goods held in stock including raw materials, work in progress and finished goods
12 what is inventory control charts
gives a visual representation of lead times, re-order level
used to control and monitor the flow of stock
12 what is lead times
time it takes between placing an order and it arriving
measured on horizontal axis of inventory control chart, as distance from re-order level to minimum inventory level
12 what is reorder level
level of inventory which triggers an order, may be done automatically by a computerised system
be determined by lead time and minimum inventory level
13 what will the business do before choosing a supplier
businesses set criteria for the selection process, identifying what the most important factors for them
13 what influences choice of supplier
prirce
speed of delivery
quality
location of suppliers
reliability
reputation
flexibility
13 why is price an important factor
keeps unit cost low
either pass savings onto customer in lower prices or higher profit margins
no sub-standard quality
value for money
