4.1/4.2/4.3/4.4/4.5 Operations Flashcards
What is operations management?
Managing the process of converting inputs into output
What are some operation decisions?
- Level of output
- Range of products offered
- How best to produce good (labour/capital intensive)
- How best to provide good/service
What is labour intensive?
A higher proportion of labour is being used in comparison to capital
What is the supply chain?
Series of activities involved in taking the initial resources to providing the final product
What are the stages of operations?
Raw materials Manufacturing Transportation Retail Disposal
How do you categorise operations?
Visibility (how many workers you interact with/see what goes on)
Variability of demand
Variety
Volume
What is the operational decision making process?
Set operations objectives Analyse operations data Make operation decisions Implement decisions Review
What are some operational objectives?
Costs Quality Flexibility Speed Dependability
What is a competitive advantage?
A way in which a business offers superior value to its competitors
How do you calculate labour productivity?
output / number of employees
How do you calculate unit cost?
total cost / total output
What is capacity utilisation?
The use that the business makes from its resources.
How do you calculate capacity utilisation?
current output / maximum output x 100
What do managers consider when making operational decisions?
Costs Profits Risk Impact of competitiveness Effects on stakeholders
What is efficiency?
Getting more output from a given level of inputs
How can efficiency be improved?
- Using factors of production
- Choosing optimal mix of resources
- Improving labour productivity
- Introducing lean production
- Using technology
What would a business do if capacity utilisation is too low?
Try and improve marketing to boost sales
Reduce its capacity
What would a business do if capacity utilisation is too high?
Outsource to other producers
Reduce demand in the short term
How can labour productivity be improved?
- Training
- Technology
- New ways of working
- Better management
- New reward systems
Problems with improved labour productivity?
- Rushing can lead to quality issues
- Employees wanting higher pay
- Waste through excess stock
What is lean production?
When managers reduce waste and therefore operations become more efficient
How can lead production reduce waste?
- Improved quality - less broken items
- Reducing amount of inventory held
- Reducing time items are waiting to be worked on
- Reducing time items are being moved around during production
How can a business become leaner?
- Kaizen
- Andon
- Changes of layout
- Change to the process
Issues of lean production?
- More vulnerable (less stock being held)
- Issues will halt production
- Risk from external factors
- Employees are checking their own work
- Need excellent links to suppliers
- Expensive
What is quality?
the extent to which an operation meets its customer requirements
What does a quality operations process need?
- clear targets
- systems to achieve targets
- training so employees are skilled
- ongoing measurement of what is achieved relative to targets
What is the PDCA cycle?
Plan
Do
Check
Act
Why is quality important?
Reputation Price Customer satisfaction Repeat sales Standards - legislation
How can quality be achieved?
- Understanding customer requirements
- Training
- Investment in technology
- New processes
- Selecting the right partners
Whats the difference between quality control and quality assurance?
The difference is that QA is process oriented and QC is product oriented.
What is the X and Y theory?
Assumes workers are naturally unmotivated and dislike working, which encourages a authoritarian style. . There is little delegation of authority and control remains firmly centralised.
What are the benefits of improving quality?
Reputation Price Customer satisfaction Repeat sales Standards Competitive Reliable Brand image Word of mouth
What is inventory?
The goods or stock a business holds
What are the different types of stock?
Inventory of supplies
Inventory of works in progress
Inventory of final goods
What are the costs of holding inventory?
Storage
Security
Opportunity
Cost of losing its value
2 types of stock rotation?
First in first out
Last in first out
Whats the time taken for supplies to reach the factory?
Lead time
What is the supply chain?
All the providers of resources at different stages of the operations process
Why do businesses choose certain suppliers?
Costs
Dependability
Ethical Considerations
What is outsourcing?
When a business uses another provider for some of its goods and services
What is good about outsourcing?
- Make use of specialist skills
- Increase the capacity of a business
Whats bad about outsourcing?
- Cost and quality of suppliers
- How does the business behave?
- May be more expensive than producing themselves
