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
Key features of Quality Assurance
• focus on the prevention of defects
• Proactive process
• Process-based approach
• Manages Quality
Key features of quality control
Quality Control
• Focus on the identification of defect
• Reactive process
• Product-based approach
• Verify the Quality
How can business improve or maintain quality
T train staff to do jobs properly
R reliable suppliers with quality materials
I inspect products at each stage if the process
E equipment that is reliable
S staff plat key role in the quality system
The benefits of good customer service
• Attract new customers
• Increase customer spend - they are more willing to buy from the same company more since they feel like they can trust this company.
• Increase market share
• Increase customer loyalty
• Increase profitability
Production
The management of turning inputs into outputs
Inputs
Production process
Outputs
How businesses can improve efficiency…
Managing employees well so they know what to do
Motivating staff so they want to work more quickly
Training workers so they know how to work quickly
Buying good quality supplies so products don’t break and have to be remade
Investing in up-to-date machinery and technology (automation)
Using flow production rather than job production.
What is the aim of lean production
Lean Production
Lean production techniques aim to reduce the amount of waste in a business.
Key points of lean production
Production exceeding
demand = products thrown
away
Delays in production = idle
resources
Faulty products = re-work
Holding stocks can be wasteful due to damage or theft + storage costs (warehousing space etc)
What do you need for lean production to work
A lean approach to produce requires employees to be involved in helping the business to improve
• Requires employees to be involved in helping the business to improve
• Any disruptions by staff (for example, a strike) can be very damaging as there are no stocks with JIT production
• Kaizen requires employees to find better ways of doing things. This means they need to be motivated and want to help.
Forms of 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)
Why is it difficult for businesses to maintain quality?
Businesses face quality challenges due to changing customer expectations, market competition, operational complexities, and the constant need for cost-effective solutions.
Benefits of maintaining quality
• repeat business/customer retention - customers are more likely to come back and recommended a business if they know they can trust the quality.
• Acquiring a new customer can cost five times than retaining an existing customers
Avoiding mistakes saves money
• Replacement products
• Redesign
• Cost of legal action (being sued)
Charging higher prices for a quality products because customers will pay for reliability
Costs of improving quality
• inspection and checking - known as quality control
• Training staff to check their own quality
• Selecting better suppliers
Quality
Providing products that consistently meet customer expectations
Total quality management (TQM)
A method of quality assurance whereby everyone in the organisation is responsible for providing consistent quality across the whole production process with the aim of zero defects and getting it right first time
Procurement
The process of buying goods and services, including choosing suppliers, ordering stock, determining payment terms, making payment and organising the delivery of stock
Logistics
The planning, implementation and co-ordination of the procurement process, including the movement and storage of stock and part / finished stock
Supply chain
All the suppliers of resources at all the different stages in the production process
