4.4d - Improving Flexibility Flashcards
How can flexibility be improved?
- Managing customer demand
- Managing business supply
What can a business do when demand is greater than supply?
- Increase supply
- Raise prices to reduce demand
What are the different ways for a business to manage supply?
- Produce to order
- Mass customisation
- Temporary and part-time employees
- Outsourcing
Core workers definition
Employees who are essential to the business
Peripheral workers definition
Employees who are not essential to a business
Produce to order definition
A manufacturing style in which a product is only manufactured once an order is received
Modular approach definition
When the basics of a product are fixed and some elements are allowed to be customised
Advantages of PTO:
- Customers get exactly what they want
- Less costs spent on buying materials that are never needed
- Can add value
- No time pressure like JIT
Disadvantages of PTO:
- No consistency of production
- Increased unit costs (no economies of scale)
- Need for increased flexibility from suppliers
Mass customisation definition
Making bespoke items for different customers but for a mass level
What are the four approaches to customisation?
- Transparent
- Collaborative
- Adaptive
- Cosmetic
What do adaptive customisers offer?
A standard, but customisable, product that is designed so that users can alter it themselves
What do cosmetic customisers do?
Present a standard product differently to different customisers (e.g. Lynx & Axe)
What do transparent customisers do?
Provide individual customisers with unique goods or services without letting them know explicitly that those products have been customised for them
What do collaborative customisers do?
Work with individual customers to help them state their precise needs to make customised products for them
Advantages of mass customisation:
- Better target individuals or market segments
- Turn a wider mass market into smaller niche ones
- USP
- Added value
Disadvantages of mass customisation:
- Rejected products cannot be used for another customer
- More complex systems needed
- Increased flexibility from providers is needed
Advantages of part-time workers:
- Lower costs
- More flexible
- Potentially more motivated
- Recruit a wider range of skills for same total employment cost
Disadvantages of part-time workers:
- Higher costs on training and induction
- Less opportunities for training and promotion
- Harder to communicate with employees if they spend less time in the business
Advantages of temporary workers:
- 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
- Less likely to know and understand the business
- Potentially less motivated and productive
Outsourcing definition
Paying another business to provide part of the production process for you
Advantages of outsourcing:
- React quickly to changes in demand without permanently increasing capacity
- Use of specialist companies who will be able to provide a product of higher quality
- Business can focus on what it is good at
- Reduced operational and recruitment costs
Disadvantages of outsourcing:
- Quality of the final product is no longer determined by business alone
- Pushes up price of product
- Possibly slows down production process
Supply chain definition
The system in place that facilitates the delivery of a product from supplier to customer
What are the ideal features of a supply chain?
- Wide variety of suppliers with alternatives
- Clear and effective method of distribution
- Can help business achieve operational objectives
- Conforms to quality, ethical and environmental standards
- Reaches around the world
Advantages of a supply chain:
- Very competitive (can source best price)
- Easy to source items
- Reduce transportation costs (supplies from around the world can be sent to nearest manufacturing plant)
- Time differences allow for 24/7 business
Disadvantages of a supply chain:
- Cultural and language barriers
- Cost issues for delivery of final product
- Ethical and environmental concerns
