Operations and project management Flashcards
Added value
The difference between the cost of purchasing raw materials and the price the finished goods are sold for – this is the same as creating value.
Intellectual capital
Intangible capital of a business that includes human capital (well trained and knowledgeable employees), structural capital (databases and information systems) and relational capital (good links with supplier and customers.
Production
Converting inputs into outputs.
Level of production
The number of units produced during a time period.
Productivity
The ratio of outputs to inputs during production, e.g. output per worker per time period.
Efficiency
Producing output at the highest ratio of output to input.
Effectiveness
Meeting the objectives of the enterprise by using inputs productively to meet customers’ needs.
Labor intensive
Involving a high level of labor input compared with capital equipment.
Capital intensive
Involving a high quantity of capital equipment compared with labor input.
Operations planning
Preparing input resources to supply products to meet expected demand.
CAD – computer aided design
The use of computer programs to create two- or three-dimensional (2D or 3D) graphical representations of physical objects.
CAM – computer aided manufacturing
The use of computer software to control machine tools and related machinery in the manufacturing of components or complete products.
Operational flexibility
The ability of a business to vary both the level of production and the range of products following changes in customer demand.
Process innovation
The use of a new or much improved production method or service delivery method.
Job production
Producing a one-off item specially designed for the customer.
Batch production
Producing a limited number of identical products – each item in the batch passes through one stage of production before passing on to the next stage.
Flow production
Producing items in a continually moving process.
Mass customization
The use of flexible computer-aided production systems to produce items to meet individual customers’ requirements at mass-production cost levels.
Optimal location
A business location that provides the best combination of quantitative and qualitative factors.
Quantitative factors
These are measurable in financial terms and will have a direct impact on either the costs of a site or the revenues from it and its profitability.
Qualitative factors
Non-measurable factors that may influence business decisions.
Multi-site location
A business that operates from more than one location
Offshoring
The relocation of a business process done in one country to the same or another company in another country.
Multinational
A business with operations or production bases in more than one country.
Trade barriers
Taxes (tariffs) or other limitations on the free international movement of goods and services.
Scale of operation
The maximum output that can be achieved using the available inputs (resources) – this scale can only be increased in the long term by employing more of all inputs.
Economies of scale
Reductions in a firm’s unit (average) casts of production that result from an increase in the scale of operations.
Diseconomies of scale
Factors that cause average costs of production to rise when the scale of operation is increased.
Enterprise resource planning
The use of a single computer application to plan the purchase and use of resources in an organisation to improve the efficiency of operations.
Supply chain
All of the stages in the production process from obtaining raw materials to selling to the consumer - from point of origin to point of consumption.
Sustainability
Production systems that prevent waste by using the minimum of non-renewable resources so that levels of production can be sustained in the future.
Inventory (stock)
Materials and goods required to allow for the production and supply of products to the customer.
Economic order quantity
Tthe optimum or least-cost quantity of stock to re-order taking into account delivery costs and stock-holding costs.
Buffer inventories
The minimum inventory level that should be held to ensure that production could still take place should a delay in delivery occur or should production rates increase.
Re-order quantity
The number of units ordered each time.
Lead time
The normal time taken between ordering new stocks and their delivery.
Just-in-time
This inventory-control method aims to avoid holding inventories by requiring supplies to arrive just as they are needed in production and completed products are produced to order.
Capacity utilisation
The proportion of maximum output capacity currently being achieved.
Excess capacity
Exists when current levels of demand are less than the full capacity output of the business - also known as spare capacity.
Rationalisation
Reducing capacity by cutting overheads to increase efficiency of operations, such as closing a factory or office department, often involving redundancies.
Full capacity
When a business produces at maximum output.
Capacity shortage
When the demand for a business’s products exceeds production capacity.
Outsourcing
Using another business (a ‘third party’) to undertake a apart of the production process rather than doing it within the business using the firm’s own employees.
Business-process outsourcing (BPO)
A form of outsourcing that uses a third party to take responsibility for certain business functions, such as HR and finance.
Lean production
Producing goods and services with the minimum of wasted resources while maintaining high quality.
Simultaneous engineering
Product development is organised so that different stages are done at the same time instead of in sequence.
Cell production
Splitting flow production into self-contained groups that are responsible for whole work units.
Kaizen
Japanese term meaning continuous improvement.
Quality product
A good or service that meets customers’ expectations and is therefore ‘fit for purpose’.
Quality standards
This is based on inspection of the product or a sample of products.
Quality assurance
A system of agreeing and meeting quality standards at each stage of production to ensure consumer satisfaction.
ISO 9000
This is an internationally recognised certificate that acknowledges the existence of a quality procedure that meets certain conditions.
Total quality management
An approach to quality that aims to involve all employees in quality-improvement.
Internal customers
People within the organisation who depend upon the quality of work being done by others.
Zero defects
Achieving perfect products every time.
Benchmarking
Involves management identifying the best firms in the industry and then comparing the performance standards - including quality - of these businesses with those of their own business.
Project
A specific and temporary activity with a start and end date, clear goals, defined responsibilities and a budget.
Project management
Using modern management techniques to carry out and complete a project from start to finish in order to achieve pre-set targets of quality, time and cost.
Critical path analysis
A planning technique that identifies all tasks in a project, puts them in the correct sequence and allows for the identification of the critical path.
Critical path
The sequence of activities that must e completed on time for the whole project to be completed by the agreed date.
Network diagram
The diagram used in critical path analysis that shows the logical sequence of activities and the logical dependencies between them - so the critical path can be identified.
