operations Flashcards
production
when resources are made into products
adding value
adding value in order to make a profit
+ customers - don’t produce yourself, time saved
+ business - selling price - cost of raw materials = adding value
how can you add value
brand/ logo, design, quality, right sizing, sponsors, good stores
wholesaler channel of distribution
producer, wholesaler, retailer, customers
wholesaler buys in bulk and sells in smaller quantities
+ less spent on marketing
- expensive for customers as cost plus
retailer channel of distribution
producer, reatailer, customer
eg tesco, large business can buy in bulk
+ cheap, convenient, better experience for customers
- relationships needed with brands
direct channel of distribution
producer, customer
online, producers having own stores
+ cheap for customers, can be done from home
- lots of advertising needed
flow production
passes down an assembly line, no workers, continuous output
+ efficient
- initial cost of machinery, demotivated employees
cell production
workplaces split into cells/ areas each deals with one stage of the product
+ motivated employees, teamwork, specialised
job production
unique, only one is made and specific to customers. highly skilled workers
+ high quality, personalised, charge more
- expensive to make, only one product at a time, labour
batch production
more then one unit at a time, machinery reset between batches, batches vary
+ output increased, less waste, made to order
- reset machines, contamination, storage
specialisation
specialised workers in each departments, improve efficiency, less waste, higher quality product
division of labour
breaking down a job into specific tasks for specialised workers who are more efficient z
productivity
relationship between input and output, greater output in relation to input = high productivity
output/ input
product vs services
product > tangible, storable, measurable, repeatable
services > intangible, experience, difficult to repeat
capacity utilisation
total level of output in a given time period
current capacity/ max capacity x100
stock - raw materials
hasn’t been used in manufacturing yet. too much = large storage needed, too little = can’t keep up w demand
stock - work in progress
raw materials undergoing development to become the final product. too much = high workload/ extra employees/ machinery needed. too little = employees have no work so become demotivated
completed stock
the final product. too much = held for too long becomes obsolete. too little = can’t keep up w demand.
just-in-time orders
this is when you make orders w suppliers for orders you already have. comes exactly when u need it. only making what we need to make
just-in-case orders
bulk buying a suppliers in advance when yo don’t have they amount of orders
stock control charts - maximum stock levels
max levels of stock a business can/wants to hold
stock control charts - minimum stock level required
minimum amount business wants to hold. assuming minimum stock level is 0 = buffer stock
stock control charts - re-order level
trigger point for when stock falls to this level the next order should be made
stock control charts - lead times
amount of time between placing the order and receiving it
what does a stock control chart include
max stock levels, min stock levels, re-order level, lead time
economies of scale
the benefit of being big because the average cost per unit is reduced because it is spread over a large amount of units
technical economies
cheaper to do things on a large scale. eg. cost spread of bills is cheaper in large hotels. internally having more money to spend on technology/ premises etc
managerial economies
can pay more/ better wages as cost is spread. less workload per person. specialisation
financial economies
easier to negotiate loan with lower interest rates. share issue
purchasing economies / economies of scale
the more you buy the cheaper it is per unit. bulk buying
marketing economies
ability to advertise and create more awareness. tv/ sponsorships
risk bearing economies
can afford to take more risks as can afford financial risk of failure. chance of success w bigger risks.
external economies of scale
benefits for f the business being large to the wider area. large demand for specific skills of labour, allows local area to develop skills for specialisation.
lead times
the time ordering and receiving stock
jidoka
detect and reject faulty goods at the earliest possible moments
kaizan
regards improvements in quality and ongoing and continuous
lean production
trying to have the least amount of waste to be more efficient. stripping anything wasted in the production process. e.g time, materials, labour/ effort, finances
quality circles
employees meet together and discuss problems related to their working environment
total quality management
the use of all resources in the production process. preventing mistakes rather then finding them in the production process. everyone works together
kanban
organises the flow of components. automated system to see what quantity of components is needed to make the product. shows what needs to be ordered and what’s been used. e.g. 2 cakes out 2 cakes in
quality assurance
continued checking of quality throughout production
quality control
checking for quality at the end of the production line to check for defects and faults
benchmarking
measuring your companies quality against others.
quality standards
a set level of quality that the product must reach
zero defects
everyone works together towards the ideal goal of there being zero defects
research and development
when business gather knowledge to create new products or improve existing products and services
critical path analysis
project planning - all activities needed to complete a task.
the critical path is the one you must not change and follow to ensure the task is completed on time
gantt chart
a type of bar chart that illustrates project schedule and shows dependency relationship between activities
est
earliest start time of activity
lft
latest finishing time of activity
total float
lft of activity - ( duration of activity + est)
free float
est of next activity - ( duration of current activity + est current activity)
