Operations Flashcards
What does operations consist of?
Stock control
Purchasing of raw materials
Storage and final distribution
Methods of production
Quality control
Disadvantages of overstocking
Products can go out of date
Increased storage costs
Can go out of fashion whilst still being held
Run out of storage
Loss of profit
Tied up money in stock
Disadvantages of understocking
Can run out of materials
Production could be halted
Lose customers
Loss in reputation
Increase in delivery costs
What is inventory management
Sourcing and storing raw materials
Supplies of finished goods
Sourcing materials
Stocking materials
What is stock management
Ensuring stock is easily available
Ensuring production continues
Avoids delays to customers
Ensuring overstocking doesn’t occur
Avoiding food wastage
What factors affect choice of supplier
Quality of the products
Delivery time
Price of the products
Quantity of the products
Location of supplier
Credit terms
What do you find in an inventory management system
Maximum inventory level
Reorder level
Minimum stock level
Lead time
Buffer stock
Reorder time
Delivery time
Delivery quantity
What is computerised stock control
Managing stock through the use of machines with little to no human interference
Advantages to computerised stock control
Allows automatic reordering
Deter staff for stealing
Highlights when products are at peak selling time
Inventory levels recorded and accessed easily
What is Just in time
Having products delivered to go straight onto production lines without being stored
Advantages to just in time
No storage costs
No wastage
No money tied up in stock
Strong supplier relationship
Disadvantages to Just in time
Delays could halt production
Increased delivery costs
Can’t fulfill large customer orders
Time consuming checking for each delivery
What is centralised storage
Having 1 large warehouse to store goods which are distributed to individual stores when needed
Advantages to centralised
Security can be watched more easily
Closer to infrastructure so easier deliveries
Can store massive amounts of stock
Ecos gained due to large quantities
Disadvantages to centralised
Increased wastage
Increased costs due to specialist equipment
Delays can be caused delivering to stores
What is decentralised storage
Having smaller warehouses theatre responsible for their own stock
Advantages to decentralised
Less wastage
Inventory close at hand no delays
Responsive to local needs
Disadvantages to decentralised
Not as effective security
Increased delivery costs
Inconsistency across organisations
What is job production
Making a one off product for the customers needs
Advantages to job production
Can charge more for the product
Customer satisfaction increased
Disadvantages to job production
Takes more time
Higher skilled staff needed
What is batch production
Making groups of identical products
Advantages to batch production
Less skilled workers needed
Batches can be adapted
Disadvantages to batch
Mistakes can ruin batches
Staff can be idling for long time
What is flow
Making similar products along a production line
Advantages to flow
Mass production
Ecos taken advantage of
Disadvantages to flow
Demotivated workers
Breakdown halts production
What is Capital intensive production
Usually used in flow production with products primarily being made by machinery and equipment
Advantages of Capital Intensive
Less employee wage costs
Quality is standardised
Can be used 24/7
Carry out more dangerous tasks
Machines do anything without stopping
Disadvantages of Capital Intensive
High start up fees
High electricity costs
Machines break - production halts
Specialists are needed to work on breakdowns
Difficult to customise the way products are made and different products can’t be changed
High maintenance costs
What is Labour Intensive Production
This is products mainly made by people usually found in job production.
Advantages of labour intensive
Fully customisable
Can charge higher prices
Considered more ethical
No/little machine costs
Solve problems before too late
Workers become more motivated
Disadvantages of labour intensive
Quality may vary
Risk of human error
Takes time to train
Higher wage costs
Breaks/holiday required
Factors affecting method of production
Finance available
What the customers want
Demand of products
Technology available
Skills of the workforce
Cost of labour
Quality to organisations
Better reputation
Legal requirement
Retailers happy
Remain competitive
Higher prices charged
More durable - few returns
Few complaints
Help reduce waste
Quality to customer
Physical Appearance
Durable/reliable
After sales service
Company’s reputation
Value for money
Ways to ensure quality
Quality control
- checking before and end
Quality assurance
- checking every stage
Quality Circles
- focus groups
Quality standards
- quality raw materials
Benchmarking
- matching competition
Mystery shoppers
- people employed to feedback
Quality training
- making sure staff know what to do
Ethics and Environmental issue is?
- Moral values or beliefs that influence how and individual or society behaves.
- Being fair and honest
- Meeting CSR objectives
- Doing the right thing
- Moral consideration
Advantages to being ethical
Awards granted for doing so
Can attract more customers
Higher quality staff
Can charge more
Disadvantages to being ethical
Costs more to make
Standard must be met
Decision making more complicated
What are the ways of being ethical?
Animal welfare
Fairtrade
What is animal welfare
Moral concerns over how animals are treated, how they’re kept, the way they’re handled, animal testing and use of animal derived ingredients.
Ways to prove animal welfare
‘Leaping bunny’ awarded to products entirely cruelty free
Free range classification of eggs
Use of synthetic materials
Fairtrade is?
When suppliers of raw materials receive a guaranteed and fair price for their goods. Also ensuring employees in the supply chain are treated fairly.
Advantages of fairtrade
Appealing to customers
Demonstrates commitment
Positive impact on primary industry
Disadvantages of fairtrade
If lost, name can be tarnished
Often more expensive
Limited choice of suppliers
