Nature of Operations Flashcards
(25 cards)
Intellectual capital
The intangible capital of a business including human capital, structural capital and regional capital
Transformational process
Activities that transforms inputs, adds value to them and produces outputs to consumers
Factors contributing to operations managers adding value
-Efficiency of production
-Quality of product
-Flexibility and innovation
Factors contributing to operations adding value that are non management issues
-The design of the product
-The efficiency of operations
-Branding to encourage consumers to pay more for the product than inputs
Productivity
The ratio of outputs to inputs during production
Level of production
The number of units produced during a period of time
Labour productivity
total output in a given period
________________________________
total workers employed
Main ways to increase productivity
-Improve the training of employees to raise skill
-Improve worker motivation
-Purchase technologically advanced equipment
-More effective management
Reasons productivity doesn’t guarantee success
-Product maybe be unpopular w consumers
-Greater effort for workers leads to greater demand for higher wages
-Workers may resist measures to raise productivity
-The quality of the management maybe low
Efficiency
Producing output at the highest ratio of output to input
Effectiveness
Meeting the objectives of the business by using inputs productively to meet customer needs
Sustainability of operations
Business operations that can be maintained in the long run
Benefits of increasing sustainability
- Reducing energy use can reduce energy costs
-Reducing use of plastic and non-biodegradable materials will attract more demand from green consumers
-Reducing waste from operations will also reduce production costs
-Making recyclable products reduces the cost waste disposal
Limitations of increasing sustainability
-Increasing sustainability might require capital investment
-Recycled materials might need to be cleaned or processed before use
-Development of recyclable products can be expensive and time consuming
-Increasing sustainability might need investment in worker training and more accurate equipment
Labour intensive
Involving a high level of labour input compared with capital equipment
Capital intensive
Involving a high quantity of capital equipment compared with labour input
Benefits and Limitations of labour intensive
-Interesting and varied work
-Low machine costs
-One off designs meet customer requirements such as exclusive furniture
-Low output levels
-Skilled and high paid workers required
-Product quality depends on the skill and experience of the worker
Benefit and Limitations of capital intensive
-Economies of scale
-Consistent quality
-The ability to supply the mass market
-Cost of financing the equipment
-High maintenance costs and the need for skilled workers to do repairs
-The quick pace of technological change, which can make existing machines outdated
Job production
The production of a one-off item specially designed for the customers
Batch production
The production of a limited number of identical products
Mass customisation
The use of a flexible computer aided technology on productions lines to make products meet customers requirements for customised products
Flow production
The production of items in a continually moving process
Factors that influence which production method to use
-Size of market
-The capital available
-Customers demand products adapted to specific requirements
-Other resources
Problem with changing job to batch production
-The cost if equipment needed to handle large numbers maybe high
-Additional working capital is needed to finance work in progress inventory
-Risk of worker demotivation because of less need for individual craft skill