6.Operations Flashcards
Operational objectives
Quality
Costs
Flexibility and efficiency
Innovation
Speed of response
Dependability
Environment
Internal factors for operational objectives
Nature of product
Availability of resources
Other departments
Over objective
External factors for operational objectives
Competitive performance
Market conditions
Demand for product
Changing customer needs
New technology
Job production and flow production
Job production is production of one of items by skilled workers
Flow production is mass production on a continuous production line with division of labour
Batch production and cell production
Bad production is a small batches of identical items
Cell production is divided into a set of tasks each second completed by Work group
Try to achieve efficiency dependability and speed of response objectives
Lean production
Streamlined production with waste at a minimum
Could help meet environmental and deficiency objectives whilst ensuring high-quality
Capacity
Maximum output with the resources currently available
Capacity utilisation
How much capacity a business is using currently?
Capacity utilisation formula as a percentage
Output divided by capacity multiplied by 100
Why is it bad to have 100% capacity utilisation?
There wouldn’t be no downtime such as the machines are on all time if a machine breaks down it will cause the lays as Work piles up waiting to be fixed
There is no margin for and the business can’t temporarily increase output for seasonal demand and one of orders will have potential customers
Firms with high capacity utilisation can increase the capacity how?
Use the facilities for more of the working week they can start working in 2 to 3 shift in a day and then weekend
Buy more machines
Increase staff levels
Increasing productivity
Subcontracting/outsourcing
Businesses use another phone to do some work on its behalf such as a manufacturer of detergent might make detergent for a supermarket and package it with the supermarkets only label
Outsourcing is in busy periods to make unexpected increases in demand
What is bad about under utilisation?
In efficient and increases unit cost because it causes fixed costs to spread over fewer units of output
How to deal with under utilisation
Increase demand such as promotion
Spare capacity by subcontracting Work
Reduce their own capacity by closing part of the production facilities this is called rationalisation or downsizing
Labour productivity formula
Output per period divided by number of employees
Labour productivity
Measure of how much each employee produces
Increased this by improving motivation training or using new technology this should increase efficiency
Just in time production
Keep stock levels very low
Aims to reduce waste of materials by having a little stock as possible
Storage cost storage juice and cash flows improved. There is less waste more flexible to cope with demand and changes.
No stock when there is production strikes
Timebased management
Aims to reduce waste of time in production process
Depends on flexible production facilities
Effective communication between managers and production staff as essential
Reduces lead times and gives a competitive advantage
And can help
However, it may be placing speed above quality
Advantages of technology
Increase productivity and quality
Reduce waste
Effective and efficient delivery
Effective marketing
Reduced administrative and financial cost
Better communications internally and externally
Advantages of technology
Increase productivity and quality
Reduce waste
Effective and efficient delivery
Effective marketing
Reduced administrative and financial cost
Better communications internally and externally
Disadvantages of technology
Initial costs may be high
Maintenance and constant updating is needed
Many staff training
Things may be needed
Advantages of capital intensive production
Cheaper than manual labour in long-term
More precise machinery with constant quality
Machines are easier to manage them people
Disadvantages of Capit tense production
Hi, set up cost maybe high
Only suited to one task which makes them in inflexible
If machine breaks down, it can lead to long delays
Difference between capital and labour intensive
Capital intensive uses more machinery and fewer workers
Lab intensive use more workers and less machinery
Advantages of labour intensive production
People are flexible and can be retrained
Cheaper for small scale production
Cheaper where low-cost labours available?
Workers can solve any problems that are during production and suggest ways to improve quality
Disadvantages of labour intensive production
Harder To manage people that machines
People can be unreliable they can get sick
Wage increases mean the cost of labour can increase overtime
People can’t work without breaks or holidays
Quality control
Assume the errors are unavoidable
The tax errors and put them right
Quality control inspector check of peoples work and their responsible responsible for
Check goods as you make them when they arrive from supplies to see if anything is wrong
Quality assurance
Measured into production process
Assumes that errors avoidable and prevents errors and aim to get it right the first time
Employees check their own work workers are responsible for passing on good quality works for the next stage of the production process
Why can quality insurance be more motivating than quality control?
Quality insurance may allow employees to have more responsibility empowering employees to self check also training may be needed which may motivate employees
Total quality management
Whole workforce is committed to quality improvements. The idea is that every department focus and quality in order to improve the overall quality of the products and services every employee has tried to satisfy customers and coworkers
Advantages of total quality management
All employees are involved, which can help bond team and increase motivation
Boost is a company reputation for providing quality services or products and usually leaves to few of faulty products being made with the business creates less waste
Disadvantages of total quality management
Can take a long time to introduce it
May demotivate staff as it looks like a lot of effort
Usually expensive to introduce, which means investing in trading for all employees
Quality circles
Meet at regular intervals to discuss quality control issues knowledge of employees from various departments and all levels of organisation and aim to identify solves specific quality problems that arise great way to get staff involved. I can lead to increase motivation and productivity but suggestions can be unrealistic and management may not listen to floor stuff.
Kaizen
Approach is a lien production method that means employees should be improving their works slightly all the time
Employees are encouraged question why problem has occurred and presented the bottom of the hierarchy had to be given some control over decision making
Helps workers feel involved in quality insurance and introduced however it only makes more time and it’s not good for businesses that urgently need improvement and quality the method is long-term
Businesses stock
Include raw materials for making a product
Materials that are currently been used for products and progress and the store of finish goods
Opportunity cost
Cost of investing money in stock instead of something else tied up in stock is unproductive and could be used to productively elsewhere
Businesses that you flow production need how much stock?
Large stock of raw materials where batch production leads to large stocks of working progress
How much stock is needed for job production and cell production?
Job production often means no stock of finish goods to be stored and so production usually realise on just in time stock control
Buffer stock
Minimum stock level
Lead time
Time it takes so good to arrive after ordering them from the supplier the longer lead the more buff stock you need to hold
Re-order level formula
Lead time ( in days) x average daily usage+ buffer stock level
Supply chain
Consists of the group of firms that are involved in all various processes required to make a finish product or service available to the customer
Mask customisation
Method of producing to order a combined flexibility custom-made product with the low cost of mass production allows an increase in customer choice and can turn in competitive advantage however very difficult for a business to make it efficient and profitable can be expensive and it can take a long time to be delivered
Core workers
Employees or central to a business like managers and skilled workers often employed on full-time permanent contract
Peripheral workers
Employed who aren’t essential to business but that the business employees when they need more staff businesses keep their cost down by employee proof for workers contemporary part-time or zero our contract
