Operations (Mr Gibbins) Flashcards
Operations
The area of management concerned with designing and controlling the process of production and redesigning of goods/services.
Name 3 factors that impact operations objectives.
Size/legal structure of the business, competition, state of the economy, government, legislation.
Name 4 external factors impacting operational strategy.
Political, economic, social, technological, ethical, legal, environmental.
Job Production
Producing a single product/service, one by one.
Name two benefits of job production.
- Can meet customer needs exactly.
- Flexible to produce whatever.
- Higher quality generally.
- Less stock storage needed.
Name two drawbacks of job production.
- No opportunities to gain from economies of scale.
- Higher costs of production.
- Labour hard to find and more expensive.
- Slower process
Batch Production
When there is stages that the production process needs to go through in order to create a product.
Name two benefits of batch production.
- Able to produce larger quantities than job.
- Economies of scale.
- Faster than job.
- More flexibility than flow.
Name two limitations of batch production.
- Time delay between batches.
- ## More stock needs to be held, more storage needed.
Flow Production
Provides a continuous process to produce vast quantities of a standardised product.
Name two benefits of flow production.
- Business able to gain benefits from economies of scale and therefore lower unit costs.
- The business can benefit from division of labour.
- Can produce a standardised product in very large numbers much more quickly.
- Little downtime so production levels optimised.
Name 3 limitations of flow production.
- Initial set up costs high.
- Takes a considerable amount of planning to organise.
- Lacks flexibility to produce wide range.
- If the line stops all production stops.
- Employees are less likely to be motivated.
- Large amounts of stock.
Name 4 factors that influence a business’ selection of production method.
Nature of products, cost of machinary, workforce, finance, customers, competition, stakeholders/objectives, size of business.
Research & Development
The process that enables the creation of new and improved products to meet the needs of customers.
Name 3 problems with research and devlopment.
Risk, copying, limited production of ideas, changes in technology, cost and customer wants.
Morphological Studies
A method that generates ideas cheaply and quickly, grid system with a range of alternatives to be considered.
Market Orientated
An approach to business that prioritises identifying the needs/desires of consumers and creating products/services that satisfy them.
Product Orientated
Means that business concentrates its activities on improving the quality of efficiency of the products.
Name two factors that influence research and development.
- Level of competition.
- External environment.
- Product.
- State of the economy.
Value Analysis
An approach to improving the value of a product or process by understanding its components and costs.
What are the three main types of research and development?
Function, cost and aesthetics.
Critical Path Analysis
Project management technique that requires mapping out every key task that is necessary to complete a project in shortest possible time.
Float Time
Amount of time necessary to finish each activity and whether they can be delayed.
Total Float
Amount of time that an activity can be delayed from its start date without delaying the finish time.
Free Float
The amount of time an activity can be delayed without causing delay to the next.
How to find total float?
LFT - duration - EST.
How to find free float?
EST - duration - EST.
Name two advantages of CPA.
- Helps reduce the risk and costs of complex projects.
- Encourages careful assessment of the requirements of each activity.
- Better allocation of resources.
- Links well with other aspects of business planning.
Name two disadvantages of CPA.
- Reliability of CPA largely based on estimates and assumptions.
- CPA does not gurantee success of a project.
- Resources may not actually be flexible.
- Network of activities can become complicated.
PERT
Similar to CPA but more pessimistic.
Name a benefit of PERT.
- More realistic.
- Simple formula to apply.
- A lot of data can be visually represented.
Main drawback of PERT.
Can be difficult to judge.
Division of Labour
The allocation of labour into specific tasks, intended to increase productivity.
Specialisation.
Where workers perform specific tasks.
Name a benefit of division of labour.
- Tasks should be able to be performed more quickly.
- Output will be increased while lowering unit costs.
- Improves profit margin.
Name a drawback of division of labour.
- Tasks may become repetitive leading to errors and demotivation.
- Automation may take over resulting in redundancies.
Diseconomies of scale
Beyond a certain level of output it may become less likely that further cost reductions can be achieved and unit costs may rise.
Name two examples of diseconomies of scale.
- Communication problems.
- Large scale production is difficult to manage.
- Reduction in morale.
Name two costs of diseconomies of scale.
- Overtime costs.
- Machine breakdowns due to over use.
- DOS must be monitored carefully.
Simple equation for productivity.
Productivity = output/input.
Labour Productivity
Concerned with the volume of outputs or value produced by each employee.
Name 3 benefits of productivity.
- Better customer service.
- Economies of scale.
- Same output with less units of labour, reducing costs.
- Less staff to be trained and supervised, reducing costs.
- Encourages investment.
Name two ways of calculating productivity.
- Labour productivity.
- Capital productivity.
- Capacity Utilisation.
Capacity Utilisation Equation
Output/maximum output x 100
Capacity Utilisation
The percentage of total capacity that is actually being achieved in a given period.
Name two ways a business could reach 100% capacity utilisation.
- Increase in demand.
- Differentiate the product.
- Reduce capacity.
Why might capacity utilisation decrease? (2 ways)
- Competition.
- Stage in the product life cycle (decline).
- Seasonality.
- Alternative products (superior).
Name 2 benefits of capacity utilisation.
- Fall in average costs.
- Increased profits.
- Increased competitiveness.
- Employee motivation.
Stock Control
The processes and controls used by a business to ensure that it has sufficient stock for purpose.
Economic Order Level.
Trying to balance up the cost of holding stock with the amount that is ordered.
Name two benefits of holding stock.
- Meet demand.
- Fluctuations of demand.
- Economies of scale.
- Buffer stock.
Name 3 costs of holding stock.
- Storage.
- Opportunity cost (stops alternative spending and utilisation)
- Depreciation (product may become obsolete/perishable)
- Security
- Administration (checking stock).
- Insurance costs.
Name two advantages of just in time.
- Reduction in storage space, less costs.
- Less working capital.
- Less likelihood of stock perishing.
- Avoids build up of unsold product with sudden changes of demand.
- Less time spent checking and supervising stock.
Name a disadvantage of ‘Just In Time’
- Little room for mistakes as minimal stock is kept.
- Production is very reliant on suppliers, they might be delayed.
- No spare finished product available to meet unexpected orders.
Lean Production
An approach to management that focuses on cutting out waste, whilst ensuring quality and improving efficiency.
Kaizen
Continuous improvement (constant small changes to improve quality/efficiency)
Name an advantage of Kaizen.
- Less likely to require major capital investment.
- Encourages employees to take ownership of their work, increasing teamwork and motivation.
- Will help the business remain competitive.
Name a disadvantage of Kaizen
- Employees may be reluctant to make any suggestions as jobs may be affected.
- Employees may feel under pressure, demotivated.
Cell Production
A form of team working where production processes are split into cells.
Name an advantage of cell production.
- Closeness of cell members should improve communication.
- Workers can become multi-skilled.
- Greater employee motivation.
- Quality improvements as each cell has ownership.
Name a disadvantage of cell production.
- Closeness of cell members could lead to disagreements.
- Workers may not be interested in becoming multi skilled.
- Employees may not want to take responsibility.
Ergonomics
Looks at the relationship between the employee and capital equipment being used.
Name an advantage of ergonomics.
- Time based savings in using machines/equipment.
- Employees may feel more motivated, equipment available to hand.
- Savings will add up.
Name a disadvantage of ergonomics.
- Potential breakdown of ergonomic equipment, increased down time.
- Employer has to be willing to pay for the cost of ergonomic analysis and implementation.
Total Quality Management
Considers the efficient usage of all resources used within the production process. All employees responsible.
Name an advantage of TQM
- Employees may feel empowered.
- Improves quality of end product.
- Increases customer loyalty.
Name the disadvantage of TQM.
Workers may feel resistant to change, demotivation.
Time based management
A general approach that recognises the importance of time and seeks to reduce level of wasted time.
Name an advantage of TBM
- Quicker response times to changing market and customer needs.
- Faster new product development.
Name a disadvantage of TBM
- Employees may feel under pressure to complete products on time leading to stress, demotivation.
- Workers may not be interested in becoming multi-skilled.
- Employees may be resistant to change.
Jidoka
The process for building into the production process an ability to detect and reject faulty goods at the earliest possible moment.
Name an advantage of Jidoka.
- Saves money.
- Targets more likely to be met.
Name the disadvantage of Jidoka.
- Initially could disrupt production in the short term.
Kanban - JIT
Helps to organise the flow of components onto the production line at the right place and right time.
Name an advantage of Kanban
- Lower stock hold.
- Less working capital is tied up in stock.
- Stock less likely to perish.
Name a disadvantage of Kanban.
- Little room for mistakes.
- High reliance on suppliers.
- No spare product available to meet unexpected orders.
Quality
Meeting the needs and expectations of customers.
Name 3 aspects of quality.
Functionality, aesthetics, value for money, durability, after sales service, reliability.
Quality Assurance.
Processes that ensure production quality meets the requirements of customers, with zero defects and right first time.
Name a benefit of quality assurance.
- Costs are reduced as there is less wastage.
- Can improve worker motivation.
- Break down barrier between managers and workers.
Benchmarking
A general approach to business improvement based on best practice in the industry.
Name a limitation to benchmarking.
- Limited access to sensitive material.
- Difficult to find which business offers best practice.
- Difficult for a business to implement improvements to reduce gaps.
Customer Service
The support offered to customers that helps them have an easy and enjoyable experience with you.
Name 4 aspects of customer service.
Empathy, patience, authenticity, communication, positivity, professionalism, product knowledge, confidence.
Name two reasons why customer service is important.
- Adds value.
- Employee motivation.
- Improves reputation.
- Retains customers.
- Word of mouth.
Name 2 impacts of poor customer service.
Damaged reputation, increased costs, loss of sales, loss of profits.
Name 2 ways to measure customer service.
Speed, complaints, customer satisfaction, price, customer loyalty, quality.
Name two ways a business could improve customer service.
Learn from mistakes, role-play, advice from others, ask, training and benchmarking.
Quality Control
The process of inspecting products to ensure they meet the required quality standards.
Name an advantage of quality control.
- Prevents faulty products reaching the customer.
- More reliable than employees.
- Inspectors better placed to find widespread problems across an organisation.
Name a disadvantage of quality control.
- Individuals are not encouraged to take responsibility for work.
- Rejected product is expensive due to full costs but no sale.
- If defect levels very high, profitability will suffer unless steps are taken.
Name a cost of poor quality.
- Product fails.
- Product does not perform as promised.
- Product is delivered late.
- Unresponsive customer service
Name two benefits of improved quality.
- Improved reputation.
- Greater production volumes.
- Lower unit costs, less waste and rejected output.
- Fewer customer complaints.
- Higher selling prices.
Name 5 factors to consider when choosing a business location.
Energy costs, transport costs, labour costs, land costs, community factors, customer convenience, labour skills, site suitability, image and expansion potential.
Supply Chain Management
The integration of the procurement of supplies, production, warehousing and transportation.
Name two key factors of supply chain management.
- Warehousing storage depots.
- Customer requirements. (Goods perishable)
- Information systems (ICT)
- Transportation.
Reshoring
A business returning production/operations to the host country that had previously been moved to a different international location.
Name a reason for re-shoring.
- Greater certainty around delivery time.
- Minimising risk of supply chain disruptions.
- Greater certainty about the quality of inputs.
Offshoring
Relocation of business activities from the home country to a different international location.
Name a reason for offshoring.
- Lower manufacturing costs.
- Better skilled and higher quality supply of labour and goods.
- Avoids protectionism.
Name a potential drawback of offshoring.
- Longer lead times for supply and risks of poorer quality.
- Additional management costs.
- Impact of exchange rates.
- Communication (language/time zones)
Outsourcing
Hiring a party outside a company to perform services or create goods traditionally done by staff.
Subcontracting
The production of a particular part of the product is undertaken by another firm.
Name a benefit of subcontracting.
- Important if there is an inability to perform the service in house.
- Helps to meet deadlines and in some cases control costs.
Name a drawback of subcontracting.
- The business never develops expertise themselves.
- Subcontractors usually paid higher than employees leading to resentment.
