Operations Flashcards
What is operations management?
the planning, organising and coordination of activities involved in the production process
what decisions does operations management include?
- where to produce
- what scale facilities are needed
- the production method
- where to get supplies form
the difference in operations systems can be categorised using Slacks 4 v model. What is this?
volume
variety
variation in demand
visibility
what are the 7 operational objectives
- volume targets
- quality targets
- environmental targets
- efficiency targets
- dependability targets
- flexibility targets
- ethical targets
what are 7 ways of measuring the effectiveness of operations management
- productivity
- unit costs
- the number of defects
- the speed of production
- the flexibility of production
- the amount of waste generated
- the amount of energy used
how does the marketing and operations function work closely together?
marketing tells them what customers want, what they are willing to pay and what needs producing by when
How does the finance and marketing functions work closely together?
finance tells operations how much they can spend on machinery and supplies
how does operations help HR?
They tell them what employees are needed with what skills
What 2 things influence the operational objectives
the corporate objectives
the other functions of the business
what 4 things will a business consider to become more efficient in production
- labour productivity
- the nature of the production process
- capacity utilisation
- lean approaches to production
Describe the 3 types of economies of scale
purchasing - negotiating better deals with suppliers so they get cheaper resources
specialisation - as firms grow they can employ people to specialise in certain areas
technical - as firms expand they can get production techniques that reduces the cost
what is capacity?
the maximum a firm can produce at any given time
what is capacity utilisation?
the amount you are using compared to how much you can use
what are diseconomies of scale?
when a firm expands and the cost per unit increases
what are the 3 types of diseconomies of scale?
communication
coordination
motivation
how do you calculate capacity utilisation?
present out put/ maximum output x100
what does choosing the right resource mix depend on? (5 points)
- the price of resources
- the availability of resources
- the nature of the product
- the ethics
- the technology you have
what is capital and labour intensive
having more machines/people on the production process
What is a knowledge economy?
people in skilled jobs who add value to the products e.g architects, authors
what is innovation?
turning an idea into a product or service
what is the first stage of innovation?
research and development
why is R&D risky
time consuming and expensive yet rare to be successful so a waste of money
How can you protect innovative ideas?
patents - last 20 years
copyright
trademark
what is an innovative business culture?
encourage workers to try new ideas and rewarding them even if they fail
advantages of innovation
- USPO
- can charge a higher price
- market leader
- more demand
disadvantages of innovation
- expensive
- long term
- risky as low success rate
- you need skilled workers
what are the benefits of being in the best location?
- lower costs
- close to customers and suppliers
- overcoming trade barriers
- it may add to the brand image
factors affecting location decisions
- the cost
- close to suppliers
- close to customers
- close to raw materials
- good brand image
- ethical issues
- quality of life
- political stability
- infrastructure
- exchange rates
- location of the market (competitors)
- availability of government grants
what 2 categories can the location decisions be put into?
qualitative and quantitative factors
what is offshoring?
moving production overseas
what is a multi site location?
operating in different locations e. g manufacturing in different areas or having multiple shops
what are the 2 advantages of having multi site locations?
- closer to different customers
- spreading the risk
what are the 2 disadvantages of having multi site locations?
- harder controlling it
- diseconomies of scale
what is a multinational?
- locating in more than one country
the 6 advantages of being a multinational?
- lower costs overseas
- less regulation
- cheaper labour
- more raw materials
- closer to overseas customers
- overcome exchange rate problems
what is lean production?
it aims to reduce all waste from the production process e.g labour time and resources
what country was lean production developed in
Japan
what are the 6 techniques involved in lean production?
- kaizen
- benchmarking
- cell production
- critical path analysis
- just in time
- time based management
what is time based management?
it is about producing more quickly so the product is the first on the market and beats the competition
What is simultaneous engineering in time based management
all the engineers and designers work on a project at the same time, instead of it being passed down a production line
what is kaizen?
employees constantly have to try and improve everything they do
what is benchmarking?
when one business measures its performance against another so that you can learn from them
what is cell production?
organising production around teams. Each team is given the responsibility for a stage in the process.
what is just in time production?
firms produce products to order, they don’t hold lots of stock. Components are only bought when needed.
What does JIT productin depend on?
- the relationship with suppliers
- reliable employees
- a flexible workforce so production can respond to demand
4 Benefits of JIT
- reduces costs as you don’t have to store stock
- you know you will sell all your stock
- it doesn’t break or expire while in stock
- more flexible so can change quickly
4 Disadvantages of JIT
- suppliers could let you down
- natural disasters could affect suppliers getting to you on time
- industrial action by employees stops all production and they have no products to sell
- parts are ordered much more frequently so economies of scale are lost
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