operational decisions Flashcards
operations management definition
the process that uses the resources of an organization to provide the right goods or services for the customer
order of the operational management hierarchy
cooperate objectives
operations aims
operations objectives
operations strategy’s
operations tactics
job production
making a one off or personalized good
flow production
manufacturing on a large scale, continuously, on a production line
batch production
making large numbers of the same items in groups
JIT
just in time- an inventory or stock control system where the suppliers should arrive precisely when they are needed in the production process.
advantage of JIT
saves space
lower storage and unit costs
increased efficiency minimized waste
disadvantages of JIT
reliant of suppliers
chance of stock outs
little spare capacity
more delivery costs
lean production
the use of techniques to minimize the waste and to save time and maximize value for customers.
resources mix
the extent to which we use labor and capital intensive
capacity utilization
how well you use your capacity
more capacity = more efficient
quality control
when an inspector checks quality
quality assurance
workers at each stage check their quality and make improvements .
cell production
is groups of people working in cells, focusing on tasks before moving the product on
quality circles
the British equivalent to kaizen, with teams of employees on all levels checking quality throughout.
time based management and what can be use dot plan this out?
the organisation of manufacturing or project sin the most efficient way
critical path analysis can be used
critical path analysis
a pictorial method of showing different activities and the best order to do them in
kaizen
is the notion of continuous improvement. it is based on staff suggestions and makes all employees responsible for suggesting ways that the business can improve the production process.
mass customization
the ability of a business to offer personalisation to products on a large scale
this usually involves ‘shells’ of products with parts of it able to be tailored to a customers requirements
what are the methods of production
flow, job, batch, lean
types of quality
quality control- what quality is checked at the end
quality assurance - workers at each stage check the quality
TQN- everyone checks the quality
capital intensive
relies heavily on the use of machinery
labour intensive
relies on the use of human labour
4 types of flexibility
product
mix
delivery
volume
value
any action or process that customers will pay for
economies of scale
when production becomes efficient EoS becomes lower, as costs can be spread over lots of goods, this is a cost advantage as it saves the business money.
methods of stock control
JIT AND JIC
cost objectives
to reduce:
unit costs
fixed costs
variable costs
quality objectives
customer satisfaction
customer complaints
product return levels
scrap rate
punctuality, ( deliveries on time /total delivery’s x100 )
speed of response objectives
time from order placed to delivery
lead times
time of response
flexibility objectives
product flexibility
volume flexibility
mix flexibility
delivery flexibility
dependability objectives
quality
punctuality
durability
added value
USP
quality features
goodwill
branding
equation for added value : selling price- cost of production
labor productivity
a measure of the output per worker in a given time period
labor productivity equation
output per period / number of employees per period
benefits of high labor productivity
increase in output
reduce costs without effecting output
total and unit cost equations
total costs = fixed + variable
unit costs = total costs / units of output
capacity
the maximum total level a business can produce in a period of time
capacity utilization
The percentage of total capacity that is actually being achieved in a given period
capacity utilization equation
actual output per annum/ maximum possible output per annum x 100
how is capacity utilization measured
through equipment and though unit costs
unit costs will fall due to high utilization and will lead the benefit of EoS
efficiency
=output is maximized from a given level of inputs
it takes into account all four factors of inputs- labor, capital , recourses, and enterprise these inputs are known as factors of production
benefits of high labor productivity and efficiency
(links to lean production)
maximized production to satisfy customers
lower unit costs enable a competitive advantage as they can lower their prices while keeping the same profit margin
can increase appeal for stakeholders
increase shareholder profits
higher wages for workers
use saved money for improving quality
4 types of customization according to joseph pine
collaborative
adaptive
transparent
cosmetic
supply and demand
one type is BTO/MTO (built/made to order) is when a business only makes a products once an order for it has been received.
this reduces inventory being held and can allow for higher sales prices
outsourcing
the transfer of jobs which were previously in - house are not done by a third party outside the business.
who identified the 4 types of mass customization
joseph pine
factors required for mass customization
customers value variety and willing to pay
business needs a quick market response
benefits of mass customization
cost reduction
higher revenue - willing to pay a premium
customer loyalty
competitive advantage
protection from market changes
higher profit
improved work motivation
disadvantages of mass customization
greater expenses for equipment and jit
suppliers must be flexible
