Operations Flashcards
Describe factors an organisation might consider when choosing a supplier. (5 Marks)
Quality − should be at an acceptable level for the goods being made.
Quantity − supplier must be able to deliver the required quantity.
Delivery Time − goods must be delivered when the organisation needs them.
Delivery charges − does the supplier charge for delivery.
Dependable − supplier must be likely to stay in business and be reliable to meet the needs of the organisation.
Price − price must reflect the quality of goods received and show value for money.
Discount − if bulk purchases made will the organisation be given discount and at what level.
Credit terms − what length of credit will the organisation be given eg 1 month, 3 months.
Explain possible problems of under-stocking. (2 Marks)
May be unable to cope with unexpected demand which may result in customer orders not being met and they go elsewhere.
Production may have to stop which means that machinery is sitting idle and sales are lost.
Stock ordering will happen more frequently which may be more expensive as small orders will not benefit from bulk discounts.
Reputation of organisation may suffer if customers are being let down.
Identify and describe 4 methods of ensuring quality in the production process. (8 Marks)
Quality control
• Quality is checked at the beginning and/or end of the production process only
• Unacceptable products are either scrapped or put back for reworking
Quality assurance
• Quality is checked at every stage of the production process
Quality circles
• Groups of workers meet at regular intervals to discuss quality and how to improve it
• Suggestions taken to management for approval
Benchmarking
• Identifying the best performers in an industry and trying to match them
Quality inputs
• Ensuring that raw materials are the best that they can be to ensure a quality output
• Ensuring that machinery and equipment is up-to-date and fully serviced so that it works to its best at all times
Trained staff
• Ensuring staff are able to operate all machinery efficiently
• Ensuring staff know any operational procedures
Quality management
• All staff are involved in ensuring they reach the standard of quality required
• Doing things right first time – no tolerance for errors
Quality standards
• A symbol or logo that indicates that a product/service has met an agreed quality standard
• Gives an organisation a competitive edge
Distinguish between capital-intensive and labour-intensive methods of production. (2 Marks)
- Capital-intensive organisations rely heavily on machinery in production whereas labour-intensive rely heavily on their workforce
- A standard product can be produced more easily with capital-intensive however, individual, one-off products are easily created with labour-intensive
- Capital-intensive production can use low skilled labour whereas labour-intensive requires use of craftsmanship/a skilled labour force
- Capital-intensive production can take advantage of economies of scale due to quantity being produced whereas labour-intensive is limited to small scale production and cannot benefit from economies of scale
- Capital-intensive production can be operated 24/7 whereas labour-intensive production will require groups of workers for shifts or down-time to rest workers
- Capital-intensive producers use flow production whereas labour-intensive would use job
- Capital-intensive production is much faster than labour intensive-production
- Labour-intensive production is often associated with quality whereas capital-intensive production may be seen as poorer quality
- Skilled workers in labour-intensive production will command higher wages whereas workers in capital-intensive production may be paid less
Distinguish between job production and flow production. (2 Marks)
Job production is used when a unique item is made whereas flow production is used when vast quantities of the same product are made.
Job production relies on skilled labour whereas flow production would rely on machines.
In job production goods can be made to specific customer requirements whereas in flow production all goods are standard.
Job production could be a slow method of production due to the level of skill etc required whereas flow production would be faster due to machinery working non-stop.
A G Barr plc uses flow production to make their IRN-BRU. Describe advantages and disadvantages of this type of production. (4 Marks)
Advantages
• Products are produced to a standard specification – identical
• Producing in large volumes
• Can benefit from bulk buying discounts
• Automated process so less human errors
• Labour costs are reduced
• Machinery can work 24/7
• Consistent quality and accuracy
Disadvantages
• Large capital costs to set up
• Cannot meet the requirements of individual consumers
• Worker motivation is low due to repetitive work
• Breakdowns are costly
• Maintenance is costly
S&K MacDonald homes are a premier house builder located in the Highlands of Scotland. They are committed to caring for the environment and use natural resources such as locally sourced wood, and natural stone cladding in all their homes. They produce quality homes with a focus on customer satisfaction.
Suggest 3 ways in which S&K MacDonald homes can ensure they provide the highest quality homes
Use quality raw materials.
Train staff/skilled workers/motivate workforce.
Inspect work throughout – quality assurance.
Inspect work at end of production – quality control.
Implement TQM.
Quality circles.
Equipment/Tools
Good after sales service.
Identify and describe 4 methods of ensuring quality in the production process. (8 Marks)
Quality control
• Quality is checked at the beginning and/or end of the production process only
• Unacceptable products are either scrapped or put back for reworking
Quality assurance
• Quality is checked at every stage of the production process
Quality circles
• Groups of workers meet at regular intervals to discuss quality and how to improve it
• Suggestions taken to management for approval
Benchmarking
• Identifying the best performers in an industry and trying to match them
Quality inputs
• Ensuring that raw materials are the best that they can be to ensure a quality output
• Ensuring that machinery and equipment is up-to-date and fully serviced so that it works to its best at all times
Trained staff
• Ensuring staff are able to operate all machinery efficiently
• Ensuring staff know any operational procedures
Quality management
• All staff are involved in ensuring they reach the standard of quality required
• Doing things right first time – no tolerance for errors
Quality standards
• A symbol or logo that indicates that a product/service has met an agreed quality standard
• Gives an organisation a competitive edge
Explain the advantages and disadvantages to an organisation of using e-commerce. (4 Marks)
Advantages
• Customers can purchase online from their own homes so sales can be made 24/7
• Allows worldwide sales therefore access to a global market
• Reduces costs due to not requiring expensive premises or large amounts of staff
• Can make use of customer details for market research purposes
• be able to target specific products to specific customers
Disadvantages
• Customer cannot actually feel/touch the goods so quality may be questioned
• Lots of competition from other online retailers so need to keep prices competitive
• Customers may be wary about paying for goods online so security measure will need to be put in place to give them piece of mind
Outline ways an organisation could use the following pieces of technology. (4 Marks)
Video conferencing − to hold a meeting between managers who are in different parts of the world.
Email − to contact customers with new promotions.
Satellite navigation systems − to help delivery drivers locate customers all over the country/world.
Bluetooth on mobile phones − to transmit data (eg photo of a site) from a mobile phone to a computer/printer etc wirelessly – must be an implication of hands-free or wi-fi.
