4.4d Improving flexibility Flashcards
Ways flexibility can be improved
- Managing customer demand
2. Managing the business’ supply
Ways to manage supply
- Produce to order
- Mass customisation
- Outsourcing
Produce to order definition
Product is only manufactured once and order has been received
Modular approach definition
Basics of the product are fixed and some elements are allowed to be customised
Advantages of produce to order
- Customers get exactly what they want
- Less costs spent on buying raw materials that are never needed
- Can add value
Disadvantages of produce to order
- No consistency of production
- Increased unit costs due to poor capacity utilisation
What does mass customisation involve?
Making bespoke individualised items for different customers but on a mass level
(See diagram)
Four approaches to customisation
- Transparent
- Collaborative
- Adaptive
- Cosmetic
How do adaptive customisers work?
They offer one standard, but customisable product that is designed so that users can alter it themselves.
How do cosmetic customisers work?
They present (package or market) a standard product differently to customers
How do transparent customisers work?
They provide individual customers with unique goods or services without letting them know explicitly that those products have been customised for them
How do collaborative customisers work?
They conduct a dialogue with individual customers to help them state their precise needs, the make customised products for them
Advantages of mass customisation
- Can better target specific market segments
- Allows a competitive advantage to be created
- Added value
Disadvantages of mass customisation
- Rejected customised products cannot be reused for another customer
- Further increased flexibility from suppliers is needed
Advantages of part-time workers
- Lower costs
- More flexible
- Can recruit wider range of skills for same total employment cost
Disadvantages of part-time workers
- Potentially higher costs on training
- Harder to communicate with employees if they spend less time in the business
Advantages of temporary workers
- Very flexible
- Ideal for specific jobs
- Chance high quality temp can be persuaded to join the business permanently
Disadvantages of temporary workers
- Higher cost per hour
- Temps are less likely to know and understand the business
- Potentially less motivated and productive
Outsourcing definition
Getting another business to provide part of the production process for you
Advantages of outsourcing
- Can react quickly to changes in demand without permanently increasing capacity
- Specialist companies can provide higher quality
- Reduced operational and recruitment costs
Disadvantages of outsourcing
- Quality can be damaged
- Price of final product will be pushed up
- Might slow down production process
Supply chain definition
System in place that facilitates the delivery of a product from a business’ supplier to its customes
What was the traditional supply chain policy?
‘Viking’ - volume is king
Ideal supply chain features
- Wide variety of suppliers with alternatives
- Clear and effective method of distribution
- Suppliers who conform to the quality, ethical or environmental standards
- Reaches around the world
Advantages of a supply chain
- Very competitive
- Easy to source items
- Time differences allow for 24/7 business
Disadvantages of a supply chain
- Cultural and language barriers
- Cost issues for delivery of final product
- Environmental and ethical concerns
What are core workers?
Employees who are essential to the business
What are peripheral workers?
Employees who are not essential to a business
What is outsourcing also known as?
Subcontracting
