Operations Flashcards
What are the 6 operational objectives?
Lower Unit Cost
Improve quality
Response speed/flexibility
Create added value
Environmental
Dependability
Reduce unit cost obj.
higher profit margin
increase scale= eos
Improve quality obj.
increase customer satisfaction
increase rep
lower price sensitivity
Response speed/flexibility obj.
adapting to change
fulfilling orders quick
delivery met
Create added value obj.
increase profit margin
Environmental obj.
consider community
pollution produced
Dependability
customer needs/wants met?
average unit cost formula?
total costs/ units produced
labour productivity formula?
total output/ no. of employees
How to increase labour productivity?
training
reward system
tech
management
costs of capacity
equipment
facilities
labour
Capacity Utilisation formula?
actual output/ maximum output x100
actions if capacity utilisation is low?
reduce capacity size
increase sales
actions if capacity utilisation is high?
outsource
reduce demand short term
Adding Value- definition
the EXTRA value a business creates through production, distribution or marketing process
Efficiency- definition
production maximised based on given level of factors of production (CELL)
Importance of increasing efficiency?
reduce unit costs- increase price (demand)/profit margin
use efficacy gains- increase quality/wages(motivation)
How to improve efficiency?
-use capacity better
-increase labour productivity
-lean production
Drawbacks of improving efficiency?
Cost of training
Investment costs
Waste/lack of demand
Quality expectations
Performance
Appearance
availability
reliability
value for money
Benefits of good quality
Customer satisfaction
repeat purchase
customer recommendation
low market cost
customer loyalty
Quality Assurance
Maintenance of target quality by attention at every stage of the process
Quality Control
Maintaining standards by inspecting output for quality
Capacity
Maximum output a business can produce/handle
difficulties in increasing labour productivity
affect on output
job rotation/redundant = resistance or unmotivated
JIT benefits
Reduce waste
Greater productivity
less capital tied up in stock
JIT drawbacks
Higher average unit costs (no eos)
Reliant on suppliers
may not meet demand
Outsourcing
One of your business processes is done by another company
What makes an effective supplier?
Price
Quality
Reliability
Capacity
Communication
Financially secure
what is lead time
time from when order was placed to when order arrives
aim of lean production
reduce waste
processes that help lean production
kaizen
Andon cord- stops and highlights production faults
influences on inventory held
type of resources- obsolete
assets- warehouse space?
what is TQM
everyone is committed to focus on continuous improvement of quality of output
advantages of TQM
customer at heart
motivated workforce
reduce waste
no inspection cost
disadvantages of TQM
requires strong leadership
training invest
bureaucratic
kaizen
culture of continuous improvement
benefits of jic
stock avaible to meet demand
less supplier reliant
eos possible
drawbacks of jic
increase storage costs
money tied up in stock
stock might perish
influences on choice of supplier
price
dependability
quality
communication
financially secure
supply chain
all providers of resources at different stages of operations process
what is vertical integration?
combination of 2 or more stages of production done by separate companies
strategic vs commodity suppliers
strategic= cruical to success
commmodity= can be found elsewhere
outsourcing benefits
increase quality/ efficiency
increase capacity
outsourcing negatives
cost
poor quality=impact
how to match demand changes
flexible workforce
queuing systems
outsourcing
produce to order
