Higher business |Operations Flashcards
Advantages of labour intensive?
Customised products are easier to make
Humans can use their own initiative and problem solve.
Less expensive machinery costs
Workers are often more motivated
Workers are often more motivated
Disadvantages of labour intensive?
Quality of products can vary due to expertise of the worker and there is
increased risk of human error
Skilled workers take time to train
Skilled workers will be paid more than unskilled workers
Workers require breaks and holidays which may lead to loss
Advantages of capital intensive?
Less employee wages and costs
Quality can be standardised, the same every time
Machines can work continuously, 24/7 meaning products are produced quicker
Machines can carry our dangerous tasks which will reduce accidents
Machines can carry out repetitive tasks that humans would find boring
Disadvantages of capital intensive?
More difficult to customise orders
Breakdowns in production can be costly
Initial set up costs of machinery are high
Employees may become demotivated
What is job production?
job production involves producing custom work such as a one-off product for a specific customer. It usually involves a highly skilled individual, a group of workers, working on one task at a time. A firm of architects designing a new house for a client; a boatbuilder building a yacht; a clothes designer creating a one-off wedding dress, are examples of job production.
advantages of job production?
High quality products due to small-scale and focused production
Personalised products can result in more revenues and greater customer satisfaction
Higher job satisfaction due to employees’ strong commitment to the product
More flexibility compared to mass/flow production methods
Disadvantages of job production?
Manufacturers usually pay higher wage costs for skilled workers
job production can take up a lot of time and resources
Specialised machines may be needed for complex items adding to the cost
Consumers have to pay higher fees for personalised products
Consumers may have to wait longer to receive the final product
What is batch production?
Batch production is a method of manufacturing where identical or similar items are produced together for different sized production runs. An example of this is T-shirt production. The T-shirt manufacturing company will manufacture in different sizes from small, medium and large, and also in different colours. Some batches may have customised logos. Hence every batch goes through the same production process, but each batch will be differentiated for size, colour and logo.
Advantages of batch production?
Producing a variety of products gives customers a wider choice and therefore increases the possibility of sales.
Compared with mass/flow production, goods can be produced in smaller quantities, making the manufacturer’s overall process more agile and efficient.
Certain products can be stored away while and finished later.
Disadvantages of batch production?
Making many small batches can be expensive
If production runs are different there may be additional costs and delays in preparing equipment
What is flow production?
Flow production is used for producing a large number of identical products (mass production). Flow production is adopted for mass-market products such as cars, doughnuts, chocolate bars, soft drinks, and electric goods. These products can be produced all year round since there is an ongoing demand for them. The production of goods follows a continuous flow - from one step to the next - on an assembly line, using automated machinery which rarely stops.
Advantages of flow production?
Economies of scale can be achieved as cost per unit will be low
Automated assembly lines save time and money
Quality systems can be built into the production at each stage
Disadvantages of flow production?
Standardised product produced
High initial set-up costs of automated assembly lines
Workers find work repetitive and boring
What are the reasons for production choices?
Finance available - a large amount of capital is required to invest in capital intensive production. Some businesses may not be able to afford to invest in this method of production
Quantity - if large quantities of identical goods are required then a company will be more likely to use capital intensive methods of production. Whereas if the product being supplied is a low quantity of a tailored product then labour intensive methods would be preferred
Technology - if the required technology to produce the goods is unavailable than the company would have no choice but to use labour intensive
What is outsourcing?
Outsourcing involves getting another business or organisation to provide a process or service rather than doing it themselves.
A Scottish local authority will have many local government employees who work in IT to deliver its services. However, the authority might decide to outsource IT in schools to a third party supplier who has more expertise and who can do the work more cost effectively than its own employees.
Benefits of outsourcing?
Fewer employees required so may lead to cost savings.
Outsourcing does not tie up the organisation’s time and resources in activities that could be done externally.
Allows the organisation to focus on core activities - therefore the core service can be improved.
Outsourcing can improve the quality and of the service or product offered
External suppliers may have specialist equipment and training that the business does not have or cannot afford.
Drawbacks of outsourcing?
Loss of control over the organisation’s activities may result in quality issues.
Loss of control over the organisation’s activities may result in confidentiality issues.
Possibly locked into expensive contracts putting pressure on budgets and cash flow.
The supplier could increase costs, creating cash-flow problems and there may be few alternative suppliers to outsource to.
What is quality management
When an organisation puts systems in place to ensure that all activities and tasks undertaken achieve a desired level of excellence, this is known as quality management. Aspects of quality management will typically include quality control and quality assurance systems.
What is quality control?
Quality control means that the finished products are checked by inspectors to see if they meet the set standard. Products are inspected at the start and the end of the production process. Any product not meeting the standards of quality set by the business will be sent for rework or discarded.
Benefits of quality control?
Reduces the chance of poor quality products reaching the consumer.
It makes employees more conscious of the importance of quality.
It can help to make production more efficient.
It can raise morale of workers knowing that they are producing higher quality products.
Products are more uniform.
Drawbacks of quality control
Reduces the chance of poor quality products reaching the consumer.
It makes employees more conscious of the importance of quality.
It can help to make production more efficient.
It can raise morale of workers knowing that they are producing higher quality products.
Products are more uniform.
What is quality assurance?
Quality assurance means that quality checks are built into the production process. For example, all staff check all items at all stages of the production process for faults. It is a way of organising every process to get the product ‘right first time’ and prevent mistakes.
Benefits of quality assurance?
Everyone on the production line takes responsibility for delivering quality
Reduces production defects and faults to a very low level or to zero
Mistakes are identified quickly and addressed, which reduces waste
Reduced waste saves the organisation money
Drawbacks of quality assurance
Quality assurance can be costly due to the regular checks being made throughout the production process.
Checking regularly can also slow down production, resulting in lower productivity.
It is a medium to long-term strategy and cannot be implemented quickly.
What are quality inputs?
Quality Materials - seeks to ensure that the quality of raw materials being used in the production process is of the standard required.
Quality labour - ensures that all staff are trained so they are competent and are all working to the same quality standards.
Quality machinery - ensures that equipment and machinery is maintained so that they do not make mistakes affecting quality.
What is benchmarking?
Benchmarking
is another method of quality management.
Benchmarking involves finding the best practice in your industry and then copying your competitor but adding some extra value or
USP
to the product.
