Final Revision Flashcards
1
Q
Outsourcing
A
Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff.
2
Q
Outsourcing Advantages
A
- Increased Efficiency, choosing an outsourcing company that specializes in the process or service you want them to carry out for you can help you achieve a more productive and efficient service which helps meet excess demand.
- Greater competitive advantage, can help you leverage knowledge and skills along with your complete supply chain.
- Increased Reach, can give you the opportunity to access to capabilities and facilities otherwise not accessible or affordable.
- Improved Focus on core business activities, outsourcing can free up your business to focus on it’s strength and allow your staff to solely focus on the tasks they need to complete allowing for them to produce a higher quality product which leads to greater customer satisfaction.
3
Q
Outsourcing Disadvantages
A
- Confidentiality and Security, these may be at risk as another business has control over your produce allowing them to see into your products and may allow them to take ideas for themselves and give better competition.
- Loss Of Managerial Control, Once contracted the managerial control belongs to the other company. This is fine if the other manager is of good quality, however if not they may do things in the name of your company that you would not approve on. This could damage your company’s reputation and lead to a surge in decreased sales. Could be liable in law for the actions of the contractor which is added costs thus lowering efficiency.
- Quality Issues, Outsourcing provider may not be driven by the same mission and standards that drives your company. This may mean they take less care or are not as focused on quality control as its not their product causing a loss in quality. This loss may cause bad rep for your company and drive customer satisfaction down.
- Hidden Costs, Need to be aware of potential hidden costs. If not the opportunity cost of using outsourcing may be negative.
- Time and Effort, Takes a lot of time to choose the right management which may mean management get less time to focus on their business in the short-term.
4
Q
Producing To Order
A
- Produce to order is an approach to production where the production of an item begins only after a confirmed customer order is received.
5
Q
Producing To Order - Advantages
A
- Greater Customer Satisfaction, allows you to supply a product that meets exact customer specifications this thus creates a unique selling proposition. Would increase return customers as not other businesses can provide the specifics.
- Minimize Costs Of Holding Inventory, as you’re producing to order you will be holding less inventory. This means a decrease in costs in storage space, labor and insurance. This allows for you to re-invest into the company allowing for greater improvements in other sectors. Furthermore their is less concern over damaged or spoiled products which means you have less waste, less waste will give your company better rep for your ethic standpoints. Ethics are becoming an increasing importance within any market these days which means your business will flourish more.
- Potential For Higher Prices, as you’re making more specific products you can offer higher prices as consumers may find it difficult to find substitutes to go to instead.
6
Q
Producing To Order - Disadvantages
A
- No Inventory Held, Means you are not able to meet unexpected increase in demand. May need to pay for overtime to increase inventory quickly or may have to add temporary employees, leads to higher unit costs and may drive price upwards. More long term-cost may be a loss of customers as they may turn to different businesses that are able to get their product to them quicker. If inventory levels are to low and you miss out on buying trends, you lose out on meeting your total daily/weekly/monthly number.
- Inability To Take Advantage Of Sudden Interest In Product.
7
Q
Ways Of Improving Flexibility
A
- Flexibility is the capacity to adjust to short-term change quickly and calmly, so that you can deal with unexpected problems or tasks effectively.
- Develop Skill Sets, staying curious about what’s going on around you. Keep up-to-date with new industry trends by reading up on the latest innovations and research, and broaden your knowledge by cross-skilling. This development will allow you to be more prepared and dependable when new orders come in. Will give you a competitive advantage over producers who are not doing the same.
- Cash Flow Options, Having emergency financing options are crucial in keeping companies afloat during time of acute pressures on cash flows and income streams. This allows you to be more flexible as you do not have to be constantly concerned about cash flow.
- Deploying New Solutions, Equipping staff with the smartphones, tablets and laptops they need to operate seamlessly on the move or wherever they might be is vitally important in the context of enterprises becoming flexible. But new software solutions and cloud-based business applications can be crucial too in giving businesses the best chance to be flexible and more efficient in a variety of valuable ways. Investment In Technology.
8
Q
Mass Customization
A
- Mass Customization, Is a process that allows a customer to personalize certain features of a product while still keeping costs at or near mass production prices.
- Innovative Manufacturing Techniques, Help companies produce interchangeable parts that can be combined in a variety of ways to build a cost-effective product that satisfies a specific customers needs.
9
Q
Four Faces Of Mass Customization
A
- Collaborative Customizers, Conduct a dialogue with individual customers to help them articulate their needs, to identify the precise offering that fulfills those needs, and to make customized products for them.
- Adaptive Customizers, Offer one standard, but customizable, product that is designed so that users can alter it themselves.
- Cosmetic Customizers, Present a standard product differently to different customers.
- Transparent Customizers, Provide individual customers with unique goods or services without letting them know explicitly that those products have been customized for them.
10
Q
Improving Speed Of Response
A
FAQ’s And Searchable Databases, Customers often try to find an answer for themselves before they call a customer service line or hop on a live chat with a customer service representative. Developing an FAQ with substantive answers is a good way to address common problems or issues. Better Rep as the customers are getting a good response without direct ation.
- Hire Dedicate Phone Staff, To address long hold times on the phone, you can hire a person or several people to exclusively manage customer calls. If the volume of calls is too excessive for your phone system or for an internal staff to manage, you can also outsource to a call center.
11
Q
Influences On Inventory Control
A
- Re-Order Level, A trigger point, so that when stock falls to this level the nest supplier order should be placed.
- Lead Time, The amount of time between placing the order and receiving the stock.
- Buffer Stock, An amount of stock held as a contingency in case of unexpected orders so that such orders can be met and in case of any delays from suppliers.
- Reorder Quantities, Is the total number of product units you request from a manufacturer or supplier on an inventory replenish.
12
Q
Influences On The Amount Of Inventory Held
A
- They Need To Satisfy Demand, Failure to have goods available for sale is costly as you lose out on possible profits that can be re-instated into the business to improve other parts of it.
- Opportunity Cost, holding inventory may mean you’re cash is tied up and does not allow you to invest it into other sectors.
- Risk Of Inventory Losing Value, Longer the inventories are hold, the greater the risk that they become obsolete is higher and you lose out. Wasted products ,may give your company a bad rep withing ethics.
