Module 4 - Operations And Distribution Flashcards
What is a prototype?
A machine or device which is not yet ready to be made in large numbers and sold
What are the prototyping stages
- Determining prototype objectives and plan to meet those objectives
- Clarity on product features and functionality it wishes to offer
- Build a test design
- Assess the design
- Conclude whether it worked or didn’t
- Launch
Possible criteria for evaluation of prototype
Functional suitability
Commercial suitability
Process efficiency
Sustainability
Manufacturing, what is it?
Process of converting raw materials, components or parts into finished goods that meet customers expectations or specifications
Automation vs Human Labour
Cost
Automation cheaper more reliable for consistency (maintenance costs)
Human - high variable costs, better with flexibility
Automation vs human labour
Quality
Good where consistency is key
Less cable of consistency - human error / fatigue BUT uniqueness
Automation vs human labour
Flexibility
Less flexibility
More flexibility
Do most production processes have a mixture of automated and human inputs?
Yes
What is outsourcing
Paying a specialist business to manufacture to a specification, under contract
What is offshoring
Moving a business activity to another country
Three factors (that we have to know) for Value Chain Analysis (Process Flow) and what are they?
Inbound logistics - raw materials, components etc. The form in which they are received, their storage and transit to the production area
Operations - the value adding activity, manufacturing process
Outbound logistics - movement out of production area
What is JIT?
JIT
Focuses on responsive, streamlined, small-batch production - ordering parts so they are available just in time for production
Quality Control (QC) definition
Checking goods for faults
What is continual improvement
Always looking for ways to improve
What is quality when talking about products
Fitness for use or conformance to requirements
Grade when talking about products
The intended features or technical specification of a product
What are the methods to promote continual improvement (CIP) and quality control (QC)?
ISO 9000 series
Lean production
Kaizen costing
Kanban
Catchball
Six Sigma (6)
The Five Whys
What is ISO 9000 series?
Leading quality standard in business
A set of quality control standard that help effectively document the elements of their own quality system
What is Lean Manufacturing?
A ways businesses identify areas of waste within the business and aims to steadily reduce this waste
It considers Value / Value Stream / Flow / Pull / Perfection
Seven forms of waste identified in Lean Production
Overproduction
Inventory
Motion
Defects
Over-processing
Waiting
Transporting
What is Kaizen costing?
Setting targets and budgets
Method of budgeting based on continual improvement in cost performance through small, incremental changes
What is Kanban?
Manager internal stock production
Notes that signal internally that new stock is required and should be produced (supporting idea stock should be “pulled” downstream)
Stock level triggers stock inflow
What is catchball?
Promotes shared ownership
Like the conch - thrown to one person at a time
What is six Sigma?
Aims to improve all processes within a business by identifying and removing the causes of defects
A sigma process is one where 99.99966% of goods are defect free
Requires experts to implement
What is the Five Whys?
If there is a problem - ask why it exists five times
What is Direct Distribution
Business -> customer
Has internet retailing made it easier to perform direct distribution
Yes
What is indirect distribution?
Business -> intermediary -> customer
Is franchising / licensing a form of intermediary?
Yes
What is Perfect Competition in Markets?
No barriers to entry
A large number of small buyers and small suppliers
Perfect info with buyers knowing how good every alternative is and how much it will cost
Homogenous? Switching costs?
What is a Monopoly?
A market with one supplier
Governments act to prevent monopolies due to the negative effect in competition and consumers
What is an Oligopoly?
A market dominated by a small number of suppliers
What is Monopolistic Competition?
There are a large number of producers but, unlike perfect competition - products are not seen as homogenous (different Grades)
Companies differentiate through branding
What is a Monopsony?
What does this tend to lead to?
A market where there is only one buyer
Concentration of buying power tends to lead to reduced prices
What is Market Analysis?
Researching and monitoring of both quantitative and qualitative factors to identify things like market size / competitors / trends
Possible strategies for market positioning
Cost leadership
Differentiation
Focus (think this is types of cost leadership and differentiation)
Cost leadership - Market Positioning
The cheapest - appeal to cost-conscious
Differentiation - market positioning
To be viewed as the best - differentiate from the rest
Focus - market positioning
Niche
May be easier to corner market
Once niche achieved - could take a differentiation or cost leadership within that niche
Market positioning - name of possible strategies to choose from
Porters generic strategies
Cost leadership
Differentiation
Focus
How can businesses target different strategic groups?
Market segmentation
What is market segmentation?
A way of analysing customer groups based on similarities and differences between them
What can market disrupters have?
A transformative effect on markets, the way they operate, the viability of previous business models and thus the profitability of the businesses that applied those old business models
How can existing market participants respond to disruptive market entrants?
Commercial retaliation
Lobbying government
Differentiation
Competing directly with disruptors
Withdrawing from market - focussing elsewhere
Are some large businesses required to report on their CSR policies and related activities and outcomes?
Are all large businesses required to?
Yes
No
What is the ‘Triple Bottom Line’ framework?
Profit
People
Plant
