Process: The influence of variety, volume, variation in demand, and visibility Flashcards
What is volume impact on production?
Large-volume production runs create opportunities for greater investment in technology, which in turn enables a more efficient production process. Inputs of materials can be sourced more efficiently, and production scheduling is more straightforward. Specialisation is easier to achieve
What is variety impact on production?
Where a greater variety of products is produced, the production process is not as efficient. A greater variety of resources needs to be sourced and then stored and production runs are smaller. less human resource specialisation is possible
What is variation in demand impact on production?
Where demand for the product or service fluctuates during the year, variations in labour input may be needed. The storage of inventories and output may be necessary
What is visibility impact on production?
Greater customer contact through strategies such as relationship marketing enables greater certainty of demand and smoother production scheduling. It is also possible to bring about more product customisation.
What is the summary of volume?
Refers to how much of the product is made. Volume flexibility refers to how quickly the transformation process can be adjusted to increase or decrease demand. Responsive to require change in volume is essential to efficiently managing lead times. If business can’t identify market changes they may lead to wastage and increased inventory cost.
e.g. low volume a 5-star restaurants
high volume a fast-food restaurants
What is the summary of variety?
The mix of products made, or services delivered, through the transformation process.
e.g. Low variety - car factory with small variations of standard models
high variety - financial advice, a range of electrical goods
What is the summary of variation in demand?
A variation in demand can impact transformation resources. An increase in demand will require increased inputs from suppliers, increased hr, increased energy use and increase of machinery. A decrease in demand will also require operation flexibility as staff may need to have their hours reduced, production may need to slow to avoid inventory, and suppliers may need to pressure due to contactual agreements
e.g. low variation - stapes such as bread and milk
high variation - ice-cream factory
What is the summary for visibility?
Customer contact or ‘feedback’ can directly affect transformation process. This is because customers and their preferences can shape what business make. Customer contact may be direct or indirect. Direct contact takes the form of customer feedback given through surveys, interviews, warranty claims. Indirect claims come through review of sales data to see customer preference will impact the transformation process
e.g. low customer contact - online university course
high customer contact - restaurant
