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As Bussines Studies > Decision Making To Improve Operational Performance > Flashcards

Decision Making To Improve Operational Performance Flashcards

1
Q

Operations management involves decisions eg……

A
  • The level of output s business needs to be able to produce
  • The range of products a business wants to offer
  • How best to produce the good or service (labour or capital (equipment) intensive )
  • How best to provide the good or service to the customer
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2
Q

Operations management

A

Managing the process of converting inputs into outputs.

It transforms resources into goods and services

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3
Q

Operational process analysis 4vs model

A

Volume of output
Variety of output
The visibility of production
The variability of demand

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4
Q

Operations involves ethical decisions ……

A
  • How to reward and treat employees
  • Where to locate the business
  • Safety features ( if not necessary adding will increase costs)
  • The environment
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5
Q

Operational objectives

A 
Costs
Flexibility 
Dependability 
Speed 
Quality 
Environmental objectives
Defect rates
Safety targets
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6
Q

Internal influences on operational objectives

A
  • Marketing activities -what has to be produced
  • Human resources - what is actually possible
  • Finance
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7
Q

External influences on operational objectives and decisions

A 
Political/legal factors
Economic factors
Social factors 
Technological factors 
Competitive factors
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8
Q

Measures of operational performance

A

Labour productivity
Unit costs
Capacity utilisation

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9
Q

Ways of improving efficiency

A
  • Using capacity more efficiently
  • Choosing the optimal mix of resources
  • Increasing labour productivity
  • Introducing lean production
  • Using technology
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10
Q

If capacity utilisation is low managers might…

A
  • Try to improve marketing to boost sales eg reduce price,change product
  • Reduce its capacity
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11
Q

If demand is too high for existing capacity

A
  • Outsource to other producers

- Find a way to reduce demand in the short term eg push price up

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12
Q

Labour productivity

A

Number of employees

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13
Q

Unit costs

A

Total output

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14
Q

Capacity utilisation

A

Existing output
—————— Times by 100
Maximum possible output

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15
Q

Ways to improve labour productivity

A
  • Invest in technology- access to more equipment
  • improve training of employees - more skills
  • change the way the work is organised and the design of jobs to improve flow of work
  • change the way employees are rewarded to provide more incentive
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16
Q

Problems of increasing labour productivity

A

Quality may suffer
Customer satisfaction may fall
Employees may demand higher pay for higher productivity

17
Q

Lean production aims to reduce waste by …..

A
  • Improving quality so reducing the amount of items that need to be reworked, thrown away or fixed
  • Reducing the amount of inventory held as this reduces costs of protecting and storing it, also reduces risk of it going out of date or not being sold
  • Reducing the time Items are waiting for something to happen to them
  • Reducing the time when items are moving from one stage of process to another
18
Q

Kaizen

A

Continuous improvement
Employees encouraged to work on kaizen groups to focus on their area of work and come up with ideas on how processes can be improved and made leaner

19
Q

Andon - helps them to become leaner

A

If there is a problem the andon cord is pulled and production stops. Lights show where the problem happened and Everyone goes there to understand what happened.

Transparency

It ensures that when there’s s problem everyone learns from it and they therefore become more efficient

20
Q

Processes to become leaner

A

Kaizen
Andon
Changes In the layout of the store or factory to make it more efficient

21
Q

Difficulties of adopting lean production

A
  • Business is more vulnerable as there is no inventory so if there is a problem and production stops they run out of stock
  • Can be hard to introduce - employees need to be engaged, have skill,and training to improve quality of own work
  • Some employees may resist the change
22
Q

Technological development allow businesses to…..

A
  • Be more flexible to customer needs
  • Reduce costs by having more efficient processes with less errors
  • Be innovative
23
Q

Quality PDCA

A

Plan
Do
Check
Act

24
Q

How to achieve quality

A
  • Understand customer requirements
  • Training
  • Investment in technology
  • New processes
  • Selecting the right partners
25
Q

Quality assurance

A

Aim - to make sure mistakes don’t occur and achieve zero defects
Quality is checked at every stage of the process
All staff involved in responsibility of quality

26
Q

Quality control

A

When a “quality team” inspect products at the end of production for faults . Other staff not involved

27
Q

Benefits of improving quality

A
  • a process is under control
  • improves brand image , customer satisfaction
  • generates goodwill though word of mouth
28
Q

Difficulties in improving quality

A
  • Employees may not believe quality needs to be improved and feel criticised
  • It takes a lot of time and effort -may need to invest in training
  • May mean changes such as different suppliers
29
Q

Consequences of poor quality

A

It is expensive to fix - recall faulty products

  • Can damage the companies brand reputation
  • Costs money to rework faulty items
  • May be legal costs if customers sue the company
30
Q

Inventory (stock) forms

A
  • Materials or supplies eg vehicle parts
  • Semi finished items being held for next stage of process
  • Finished products being held
31
Q

Managing the amount of inventory held is important because …..

A
  • Holding inventory uses up resources eg warehousing space, security measures
  • Holding it has an opportunity cost ( money could be used for something else)
  • Inventory may go out of date and become worthless if held for too long
32
Q

Problems with inventory control might happen if…

A
  • Supplies are delayed - use up buffer stock for as long as it can
  • The usage rate is faster than usual eg from an increase in demand
  • There is a failure to reorder inventory
33
Q

Influences on choices of suppliers

A
  • the cost of materials and quality
  • dependability
  • ethical considerations
34
Q

Benefits of outsourcing

A

It enables the business to make the use of specialist skills and services

It can increase the capacity of the business by getting some aspects of its provision provided by others

35
Q

Disadvantages/ difficulties of outsourcing

A
  • A business will be affected by the work undertaken by other businesses In terms of the costs and quality of their suppliers. Poor quality can adversely affect reputation of business itself .
  • Business may be held accountable for actions of suppliers
  • A business will have to pay enough for the products for the supplier to make a profit
36
Q

Advantages of a just in time system of stock control

A
  • Don’t have to pay for storage
  • Less wastage
  • Meet changes in customer wants easily
  • Adapt to problems better eg defects dealt with
37
Q

Disadvantages of a just in time stock control system

A
  • Suppliers may want more for an immediate delivery
  • If demand increases suppliers may not be able to meet it
  • Can loose out on economies of scale from less bulk buying
  • Relies heavily on suppliers
38
Q

Re order level calculation

A

Lead time (days) * average daily usage + buffer stock

As Bussines Studies (8 decks)

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