operations management Flashcards
why do you have operation management objectives?
to provide a sense of direction and motivation
they need to be SMART
name two reasons why targets may be unrealistic
not the right machinery or sufficient employees
what do you need to consider when setting operations objectives
legal status and size of business
the state of economy- growing economy make it easier to achieve targets
level of competition in market - highly competitive= low price and lower profit margin.
government of the day-as part of political agenda may be encouraging or discouraging business. level of taxation can impact.
legislation can impact production set targets
external factors on operations management (social factors)
changing tastes- affect demand for products, so effect what business produces.
holidays abroad- e.g cruises more popular as people no longer feel for elderly.
religious changes- UK moving to multi cultural society so changes in purchasing habits, so produces responded to what they create. e,g food.
external factors on operations management (ethical factors)
how product is produced- sustainability more important
level of wastage- production process save energy?
changing resources more significant-
labelling of packaging.
external factors on operations management (environmental factors)
healthy regard for planet and its resources- growth in concern
the use of sustainable resources in production process will enhance credibility & enhance sales.
external factors on operations management (legal factors)
level and specific nature of legislation
complying with law is essential as not will damage reputation
legislation can effect production process- health and safety may have cost implications
external factors on operations management (economic factors)
state of economy- terms of level of inflation will affect cost of production
the level of unemployment- availability of labour to produce goods.
cost of labour- full time employment wage increases & cost of labour= business using machines instead
growth in economy- business more confident to invest so meet growing level of demand.
the value of pound- strong pound harder to sell abroad
external factors on operations management (political factors)
nature of government in power
the concern as to whether a particular political party would increase minimum wage- affect business as they budget for following years costs can either be passed on to the consumer or absorbed, often depending upon the price elasticity of the product.
external factors on operations management (technological)
technology is ever changing
rapid technological advances- More money is being spent on research and development in order to either remain competitive or, in some instances, be viewed as the market leader in terms of new technology.
technology for automatic steering and parking
solar energy- cut energy bills- allowing operations management to spend saved energy bills elsewhere.
external factors on operations management (international factors)
golablisaition pace increases- need to be aware of markets growing .
globalisation offers more choice
what is added value
the difference between the actual price charged for a product or service and the actual cost of all components and assembly of the product or service.
what are the advantages of added value
Being able to charge a higher price.
A higher level of profit.
The higher price may enhance the image of the product or service.
It may enable the business to target its chosen market more easily.
It may offer the opportunity to make the product more distinctive and establish a unique selling point (USP).
name three ways added value can be done
high standard customer service
additional features
high quality products
delivery service
benefits to stakeholders of added value
customers- although price higher they get a more unique product.
customers- additional service
customers may feel additional features good value for money.
suppliers- added value lead to increase sales so suppliers supply more
shareholders- profits increase & dividends.
disadvantages of added value
It is not guaranteed that the cost of adding value can be recouped by increasing the price.
The increase in price needed to gain from added value may restrict sales and therefore sales revenue.
The amount of competition may make it harder to increase the price in order to recoup the cost of adding value.
The elasticity (price, income and advertising elasticities) may make any required price increase difficult to be accepted within the market.
what is innovation
process where ideas are transformed into new products or services.
what is research and development
set of activities intended to identify new ideas that have the potential to result in new goods and services.
what are the main aspects covered in research and development
to launch new product successfully, to ensure meet customers needs.
examines how to improve efficiency
explore alternative methods and material to produce goods.
aim reduce wastage in production process
maintain competitive advantage
main problems with research and development
costly
risky as no gaurantee of success, could lead to cost with no revenue to cover costs.
other business can copy, even patents don’t last forever. as haven’t incurred same cost of research and development copy business could charge less.
unemployment- shift to capital intensive labour- trade unions object.
technological changes in communication after research led to changes in working practices for employees. phone. isolation & lack of team building.
market research- need to be sure product something consumers will buy.
what is product orientation
this means that a business concentrates its activities on improving the quality of efficiency of the product.
brainstorming- what is a morphological study
A method that generates a lot of ideas very quickly and therefore more cheaply
what are the three aspects to value analysis
function
cost
aesthetic
what is the function aspect of value analysis
The nature of the product will determine its task.
if it does not fulfil item function useless.
what is the cost aspect of value analysis
significance will vary depending on nature of product and market It is sold.
good value for money attractive to customer
It is often a challenge to guarantee the functional element of the product without incurring high costs.
what is the aesthetic aspect of variance analysis
look of the product.
for some goods little or no consequence, for others does. clothes
key information based around balancing aspects of variance analysis
difficulty for research and design department is how to balance.
All three aspects should be covered, but the nature of the product will determine which aspect is prioritised
what are the factors affecting research and design
level of competition in market - highly competitive research expenditure higher.
product type- The more sophisticated the product in terms of technology, the more likely that research and development will be needed to keep up with technological developments.
external enviornment
state of economy- recession more likely business take cutbacks.
what are the main methods of production
job, batch, flow, cell
what is job production
making one off, specialised products for each customer.
important aspects of job production
Job production is usually concerned with satisfying a consumer’s specific needs and can also refer to the production being undertaken by one employee who completes the whole task. This type of production is often undertaken by small, local businesses
bespoke, tailor made and one off.
Job production tends to be labour-intensive, as the number of goods produced would not make it worthwhile investing in an automotive process.
The costs of setting up a job production process are significantly less than batch or flow.
The process is more expensive in terms of labour costs and the cost of materials, as there are few opportunities to gain from bulk-buying economies of scale.
what are the advantages of job production
meet exact customer needs
high quality of work - concentrated on only one single unit.
easier to motivate workers as build product from start to finish, so feel involved and committed.
easy to add value due to highly specialist work.
less stock is tied up
what are the disadvantages of job production
no opportunities for economies of scale.
high production costs
labour more likely to be skilled- harder to find and more expensive to employ and train.
slower process.
harder to gauge costs- as not done before.
higher labour and material costs.
what is batch production
where a number of similar items are produced in a set or group, go through all stages together but they can differ slightly.
important aspects of batch production
Every batch of goods goes through every stage of the process together. The process is then repeated, when the next batch goes through exactly the same processes.
As each stage of the production process is the same, different products can be produced using the same process
done by Hand or machine- doesnt matter.
benefits of batch production
produce in larger quantities than job.
some economies of scale dependant on batch size generally faster than job production due to the larger number of products produced
greater quantity= lower unit costs
more flexibility than flow to meet customer needs.
disadvantages of batch production
time delay between batches which means nothing produced (downtime)
changing machine to different press take serveral hours, nothing happens (downtime)
this reduces level of output compared to flow.
more stock needs to be held, adding to cash outflows.
more storage needed
less variety of work and low level skill needed- not as motivating as job. affects morale and productivity.
what is flow production
involves identical products being made on an assembly line. the product Is made in stages, with parts being added as it moves along assembly line.
a conveyor belt approach.
important aspects of flow production
is used in order to produce vast quantities of a standardised product. The division of labour enables employees to concentrate on one particular task in the production process and therefore they are able to increase the level of productivity.
large numbers that are produced, the level of capital equipment used in the production process is very high. Flow production is often automated.
what are the advantages of flow production
economies of scale & reduce unit cost of production
large scale of production- employees benefit from division of labour and reduce costs further.
standardised product optimised production.-little downtime as continuous
low costs
more opportunities for division of labour (specialisation) where labour can concentrate on specific tasks and enhance productivity.
what are the disadvantages of flow production
high initial set up costs for automated systems.
takes a lot of planning to organise flow system.
lack flexibility to produce wide range of products
if line stops, whole production stopped unlike batch.
repetitive nature of production tasks= boring and affects motivation. affect productivity, labour turnover and absenteeism.
large amount of stock in terms of work in progress.
greater reliance on suppliers to deliver in time .
lead time to set up substantial.
any change in products= considerable amount of downtime.
what is cell production
production divided into set of tasks, each set completed by a work group.
important aspects of cell production
The layout of a cell production plant is often U-shaped to enable the process to be contained within a given area in which a team operates.
A reduced version of cell production operates when a team is responsible for a section of the production process or collection of workstations within the productive process. intention to empower workforce and encourage more responsibility.
what are the advantages of cell production
improved working conditions as employee work in teams. reduces boredom.
employees are responsible for the work within their own cell, there is an incentive to ensure that the quality of the work is high. reduces waste.
sense of responsibility.
opportunity for job rotation in team.
what are the disadvantages of cell production
expensive set up costs
tools are duplicated
what is division of labour
job or task is broken down, train people to do the task and as they repeat the task they get faster so productivity increases.
why would business introduce division of labour?
reduce costs
increase production
remain competitive in the market.
what are the impacts of division of labour
increase profit
suppliers more orders
employee gets bored
reduced price which can lead to bonuses
HR get more work as people leave.
what does changing the method of production depend on
nature of products involved
actual cost of machinery
financial situation of business (budget)
significance/ importance of customers, in terms of meeting specific needs
degree of competition in market
views of stakeholders of business
objectives of business
practice ability to change- e.g factory room
support for workforce
cost of possible redundancies
need to produce standardised products
availability of required technology.
what is project management
planning and organising activities using resources to achieve the business objectives
what are the main aspects of project management
planning
executing
monitoring
completing
what is critical path analysis
Critical path analysis (CPA) is the process that allows for the overall time of a project to be calculated, and to allow a diagrammatic network to be drawn which shows when activities should start and finish.
how do you calculate earliest start time
EST of previous activity + duration of current activity
how do you calculate latest finishing Time
last end activity- length of activity
what is float
a float shows how much time an activity may overrun before has an effect on next activity or whole project
what is total float
amount of time an activity can be delayed without delaying completion date.
more serious delay as a delay in overall finish time may lead to costs incurred.
how do you calculate total float
LFT of the activity- duration of activity - EST of previous activity
what is free float
the effect upon the next activity and not the project as a whole; consequently, any such delays are not as serious.
how do you calculate free float
EST of the next activity- duration- EST of current activity
what are the advantages of critical path analysis
a simplistic visual form of communication to show the order and timing of activities.
simple method to calculate the shortest time in which to complete the project.
knowing EST allows JIT production.
see when they need finance for the project to ensure supplies ready.
management can see consequences of potential delays.
what are the disadvantages of a critical path analysis
value of CPA depends on the accuracy of activity times
may be reduction in quality to make sure its done on time. cut corners.
doesnt consider cost implications
