Managing inventory and supply chains Flashcards
Give examplees of operational objectives
Flexibility, speed of response, dependability
What are ways you can improve the supply chain?
Improving flexibility, speed and dependability
What is the impact of flexibilty on the supply chain?
Flexibility is important because it allows the business to respond to changes in demand with little notice
How can a business improve its flexibility?
Using mass customisation - Approach to production which involves products being made in mass to achieve lower unit costs, with a final process which allows for customisation
Mass customisation allows a business to respond to customer needs through customising products requested by customers
Why is speed important as an operational objective?
Ability to meet cutsoemrs’ expectations in terms of the time taken to produce and distribute a product can contribute to customer satisfaction
How can a business improve its speed of response?
Focussing on efficiency during the production process as increased efficiency and productivity will allow businesses to produce and therefore distribute products more quickly
Why is the operational objective of dependability important?
How can a business improve its dependability?
Ensuring it uses reliable suppliers that it can trust
How can demand relate to profitability?
Business should be able to meet customer demand to maximise profitability
Meeting demand can involve increasing supply
Impact of outsourcing
Supply can be increased through outstanding work which increases output
Impact of hiring flexible workers
Supply can be increased using part-time and temporary workers who can support the business flexibly when demand increases
Many farms hire strawberry pickers as seasonal workers
Impact of minimising waste
Supply can be increased through using a producing to order approach which minimises waste and ensure the availability of raw materials to create products in demand
Example of hiring flexible workers
Many farms hire strawberry pickers as seasonal workers. Many of these are migrant workers from Europe.
What is an inventory?
List of all the stock that is held by a business
Influences on amount of inventory held
Inventory control charts can be used to show a business its maxmum stock level, re-order level, lead time and buffer stock
Inventory control diagram
Shows maximum stock level a business is willing to operate at
Shows re-order level which is the point at which further stock is ordered
Shows buffer stock which is the spare stoc ka business holds in case there is an unexpected increase in demand
Shows the lead time which is the time taken for the stock to arrive after it is ordered
What is outsourcing?
When a business uses another business to make part of its product or provide part of its service
Advantages of outsourcing
Can provide cost savings because a third-party business may be able to create or produce a product or service at a lower cost than the original business
Supplier may be a specialist, with greater experience and better equipment
Speed of response can be set as requirement of the outsourcing contract
Suppliers likely to have greater capacity and flexibility than in-house
Disadvantages of outsourcing
Can lead to quality problems if the business that wins the outsourcing contract does not uphold the same quality standards
Supplier may have to balance conflicting demands from other customers
