Interum Test 2 Flashcards
Job production
The method of making the product meet the exact need and requirement for the customer
Flow production
This is when the production doesn’t stop and keeps going (mass production) e.g car manufacturer companies
Advantages for job production
• High quality of work
• Workers are highly motivated due to being able to view the end product. E.g. a cake worker is motivated to see the cake at the end
• Customisable meaning customers can order exactly what they want (to their preference).
• Can charge a higher price due to customized product and personal service.
Disadvantages for job production
• Expensive because since the worker has to be highly skilled the wages would be higher – high unit cost
• Cannot benefit from economies of scale
Advantages for flow production
• Large number of productions can be produced – high volume of output
• Can make in mass production
• Low cost per unit – because the large number of the product gets made continuously. (24/7)
• Due to employees doing the same task continuously they get specialized – this is called specialization
Disadvantage for flow production
•It’s dehumanising
• Lots of machinery needed, so high start up costs
• Difficult to adapt the assembly line to : make different products (lacks flexibility)
• Job is very repetitive which is demotivating
•Breakdown of one machine can stop the whole factory working
What causes waste
• Production exceeding demand = products thrown away (trend died out so now no one wants to buy it anymore)
• Delays in production = idle resources
• Faulty products = re-work
• Holding stock can be wasteful due to damage or theft + storage cost (warehouse space etc)
Efficient definition
how well the business is using its resources or ‘inputs’ to produce ‘outputs’ (I.e. products or services)
Efficient = low unit cost
So if a business uses high level of input to produce output it is
inefficient = high unit cost
(using a WHOLE sheet of aluminium for only 5 cans when you can make so much more in inefficient)
How to improve efficiency?
• Motivating staffs so they want to work more
• Training workers so they know how to work quickly • Buying good quality so products can last and doesn't have to be remade (people want things that can last) • Investing in up-to-date machinery and technology • Using flow production rather than job production
What is Just-in-time (JIT) production
• Stock arrives just in time to be used in the production process and aims to minimise the amount of stock held
What does JIT should, must or aim to do?
• Reduces the waste caused by throwing unwanted items away
• Business should not hold any stock (or at least as few as possible)
………………. ………………. ……………….
• Suppliers must be able to respond very quickly to order
• Must deliver products that work
• no room for anything to go wrong
Kaizen definition?
= continuous improvement
‘good change’
How does kaizen work
• Approach in which all employees are involved in improving how things are done.
• Teams of employees thing about what happened the day before and look for ways of improving the production process
The changes that come out of these discussions are often very small and ‘incremental’
• Overtime they can add up to significant improvement
Ideas come from employees so business learns from the people who actually do the work, so reflect reality
Raw material
RAW MATERIAL = the basic material from which a product is made
Finished goods
FINISHED GOODS = products that have completed the manufacturing process but have yet to be sold to customers
Work in progress
WORK IN PROGRESS = partially finished goods awaiting completions
EXAMPLES OF STOCK
EXAMPLE OF STOCK
All business hold some form of stock
e.g. Car manufacturer
Could be out of date (obsolete)
Expensive to keep cause its big
Biscuit factory
Could perish
Fashion retailer
Fashion is out of date – waste
WHY DO BUSINESSES CARE ABOUT STOCK MANAGMENT
It reduces cost and meets demand
Advantages for JIT
Advantages
• Lower storage and warehouse cost
• Less wastage as products cannot be outdated or pass their expiry date
• Produced on demand so all products will be sold
• Reduce cost of staff and insurance
Disadvantage for JIT
disadvantages
• No room for error as the bare minimum inventory levels are kept
• Not being able to adapt to a sudden increase in demand
• Extremely reliant on supplies
• Not able to befit from economies of scale
• Any downtime stops the whole production process
JUST IN CASE STOCK CONTROL
JUST IN CASE STOCK CONTROL
Material, goods and even labour are on standby so they are there when needed in the production process
Not lean
If they have a spike of demand they can meet it
Just in case advantages
ADVANTAGES
• Can quickly respond to increases in demand
• Can continue with production even if a problem with stock deliveries arises
Just in case disadvantage
DISADVANTAGES
• Money tied up in bolding stock
• Cost associated with stock holding e.g. storage, staff, insurance
• Risk of waste e.g. out of date, damaged, or
Obsolete (tech)/ perishable (food)
What is meant by the term ‘quality’?
how well a product or service meets (or exceeds) customer expectations
Explain three different ways that businesses can monitor and measure quality
- Once a business has clear standards and targets for quality it can start to measure quality and identify potential problems
• Customer feedback
• Mystery visitors/shoppers
• Staff responsibilities
