Operations Flashcards
Just-In-Time info
Materials are ordered just in time to make products
Products are assembled just in time
Finished goods are produced just in time to be sold to customers
Nothing is produced unless there is customer demand
Benefits of Just-In-Time
Capital is not tied up in stock, can be used elsewhere
More responsive to customer demand
Reduction in storage costs
Reduced stock deterioration, wastage, theft
Closer relationship with suppliers
Costs of Just-In-Time
Production may be disrupted if supplies do not arrive on time
High dependency on the reliability of suppliers
Increased ordering, admin and delivery costs
May lose bulk-buying discounts
May not be able to respond to a sudden increase in demand
No room for error, no ‘extra’ materials
What is a benefit of capital-intensive?
Can work 24/7
Standardised quality
Fewer employees (wages)
Less skilled work force required
What is a disadvantage of capital-intensive?
Machinery is expensive initially
Customisation is difficult
Breakdowns can be expensive and causes production to stop
Advantages of automation
Accuracy is far greater because there is no human error
Production time is quicker and can be repeated constantly with no errors
Disadvantages of Automation
Machinery breakdowns are expensive
It causes unemployment to increase which has an economic impact on the country
Advantages of mechanisation
Using labour allows for production issues to be flagged up quickly
Labour can be trained in becoming expert at operating machinery
Disadvantages of mechanisation
The initial set-up costs are high
Labour need to be trained which is an expense. They will probably also require training whenever machinery is updated
Advantages of Labour intensive
For creative industries
Losts of humans available
No expensive equipment required
Unique products
Disadvantages of Labour intensive
Expensive and time consuming to train
Quality can vary
Why is quality important?
Poor quality goods can result in customer returns/ complains which can lead to loss of sales.
High quality goods can be sold for premium prices
Selling high quality goods can attract high quality staff
Benefits of fair trade activities
Can attract customers who agree with the principles
Can improve the organisations reputation
Can get awarded for being ethical
Costs of fair trade activities
More expensive to operate this way
Must ensure that the supply chain are also being ethical
Decision making time can be time consuming as an ethical
How is technology used in operations ?
E-mail can be used to contact customers
Internet can be used to research suppliers and prices
