Production Flashcards
operations management objectives
likely to be productive targets in order to meet demand and any long term productivity goal
why do operation objectives need to be clear
used (SMART)
employees know exactly what to do
good communication is important
what will the usefulness of operations objectives depend on?
no. of employees
right machinery
realistic targets
what does a business need to consider when setting operational objectives
size
other objectives
state of economy
give examples of operations management objectives
increase productivity
improve quality
adding value
difference between the actual price charged for a product and the actual cost of making it
advantages of added value
charge a higher price
target chosen market more easily
create a USP for a product
benefits to stakeholders of added value
consumers get a unique product
associate brand name with quality
shareholders benefit if profits increase
disadvantages of added value
cost of adding value might not be covered by price increase
competition make the added value not as desirable can’t increase price as much
elasticity of product
innovation
introduction of new idea, method of production or new equipment into production process
research and development
process that enables the creation of new or improved products to meet the needs of its consumers
why is research and development needed in a business
necessary to launch new products successfully (meet customer needs)
explore alternative materials
reduce waste
beat competition
why does a business need innovation
launch new products to retain customers
compete with rivals
product innovation
introduction of new and better product into a market
process innovation
introduction of new production process
improves productivity+lowers costs
improves original product/produces new one
disadvantages of research and development
expensive
no success guarantee
business copy you
constant change, annoy customers
benefits of innovation
improve quality
deal with legal and environmental issues (innovation help overcome these problems)
drawback of innovation
competition copy
no guarantee of success
availability of finance
what is the process of research and development
market research
brainstorming
Morphological Studies generates ideas cheaply and quickly
job production
producing a single tailored made item to meet customer needs
benefits of job production
meet customer needs
high quality
motivational
drawbacks of job production
no EOS
skilled labour
slower process
batch production
set procedure of stages production process has to go through
one process completed before next one
benefits of batch production
some EOS
faster than job
greater quantities produced
drawbacks of batch production
time delay between batches
less variety of work
storage space
flow production
continuous process product is assembled on production line creates standardised product
benefits of flow production
EOS
division of labour
maximise time
limitations of flow production
one part breaks all stops
initial set up costs high
employees de-motivated too repetitive
cell production
form of team work entire process of production is split into small groups
Each cell responsible for a complete unit of work
benefits of cell production
employee repsonsible for work in cell incentive for quality
job rotation opps
set own pace of work
division of labour
job is broken down into separate tasks
benefits of division of labour
become good at it high productivity
drawbacks of division of labour
repetitive
impact of division of labour on stakeholders
shareholders-increase efficiency,profit
suppliers more components
customers cheaper product EOS
which factors determine the type of production being used
product
cost of machinery
practical ability e.g enough room
specialisation
the process of concentrating on and becoming expert in a particular subject or skill
productivity
Measures of output per worker over a given period of time.
measures of productivity
Output per worker or hour of labour
Output per hour / day / week
Output per machine
Unit costs (total costs divided by total output)
why is high productivity important
lower cost goods than competitors.
maximise the return it makes on production assets
more output=more sales
how can a business improve productivity
Improved motivation
More or better capital equipment
better quality raw materials (reduces amount of time wasted on rejected products)
Improved organisation of production
diseconomies of scale
business expands in the long run, the unit cost of production increases
economies of scale
unit costs fall as output rises
examples of internal economies of scale
marketing
technical
specialisation
examples of external economies of scale
relocation of suppliers (cost saving)
spending locally improving transport (less time)
where do external economies of scale occur
in the industry
where do internal economies of scale occur
in the business
examples of internal diseconomies of scale
inefficient management
technical difficulties
examples of external diseconomies of scale
pollution (social cost of production)
strain on infrastructure (things get delayed)
capacity utilisation
measure of the extent to which the productive capacity of a business is being used
capacity management
concerned with the usage of resources of a business
what is included in capacity management
analysis of performance+effect on capacity of introducing new product
monitoring capacity of IT server within a business
how do you calculate capacity utilization
actual output/possible output X100
how can full capacity utilization be obtained
increase demand for product produced
different additional products with same resources
constraints of reaching full capacity
product is seasonal (lower demand)
outsourcing (don’t have control over)
level of competition
benefits of operating at full capacity utilization
av unit cost falls, cost spread among more sales
less wastage
more profit (lower costs)
opportunity for employee bonuses
disadvantages of operating at full capacity
less opportunity for maintenance
additional orders impossible to meet
no time for on the job training
pressure on employees
what is stock
raw materials
work In progress
finished goods
stock control
ensuring that appropriate amounts of stock maintained by a business, able to meet customer demand no delay
what are the methods of stock control
stock control charts JIT Kanban fixed reorder stock levels fixed time reording economic order quantity electronic methods
lean production
method of manufacturing for the minimization of waste
total float
amount of Time activity can be delayed from start date without delaying the finish time of the project
free float
amount of time network can be delayed without causing delay to the next task
how do you calculate earliest start time (critical path analysis
Add up all the hours of tasks that need to be completed before that task can be started
how do you calculate latest finishing time
Time taken to complete the task minus previous LFT
what is the PERT equation
Optimistic time+(4 x Likely time) + pessimistic Time/ 6
why does a business use CPA
projects that are complex
complexity and risk- necessary to identify the relationships between activities- work out most efficient way of completing the project.
advantages of critical path analysis
the risk and costs of complex projects
Encourages careful assessment
spot which activities have some slack (“float”)
Provides managers with a useful overview of a complex project
disadvantages of critical path analysis
Reliability based on accurate estimates and assumptions made
does not guarantee the success of a project
Resources may not actually be as flexible as management hope
Too many activities, network diagram too complicated.
Gantt chart
A graphical Representation of the order and duration of tasks
what does PERT stand for
programme evaluation review technique
project management
application of knowledge, skills, tools, techniques to project activities to meet the project requirements
benefits of a gantt chart
Visual Representation
Easy too Monitor
See what is happening
Shows time and resource allocation
drawbacks of gantt chart
Does not show critical activities
Can not see ESTs or LFTS
Can not calculate Floats
what is lead time on a stock control graph
Amount of time between placing the order and receiving the stock
benefits of holding stock
Meet Demand
Fluctuations in demand
Economies of scale
Buffer stock
JIT
just in time (stock control)
stock arrives just before it needs to be used
buffer stock
amount of stock held
1) as contingency in case of unexpected orders
2) in case of any delays from suppliers
factors affecting how much stock you reoder
How long it takes for the supplier to deliver the order
Higher lead higher re-order level
Demand for the product
Higher demand normally means higher re-order levels
fixed time re-ordering
sent periodically or after a fixed time interval
fixed re-order stock level
the minimum amount of stock that a business will hold before it re-orders from its suppliers.
economic order quantity
order quantity that minimizes total inventory holding costs and ordering costs.
applies demand for a product is constant over a given period of time
each new order is delivered in full when inventory reaches zero.
benefits of JIT
Less stock holding- cost benefits
Disadvantages of JIT
Reliant on suppliers
Little room for mistakes
No spare capacity
Time-based management
aspect of lean production.
recognises the importance of time
seeks to reduce wasted time in production processes
The potential benefits of time-based management
Quicker response times
Faster new product development
Reduction in waste,
aspectss of lean production
Time based management Simultaneous engineering (JIT) Cell production Kaizen (Continuous improvement) Quality improvement and management
Jikoda
building into production the ability to detect faults-Prevent downtime
quality circles
Groups brought together to identify potential improvements.
Kanban
traffic light system
amount of stock falls the kanban goes to green to allow more stock
Kaizen
improvement based on many, small changes rather than the radical changes
methods of lean production
Kanban TQM JIT Jikoda cell production
project management
involves planning and organising activities using resources to help achieve objectives
electronic methods of stock control
EPOS
e.g scanning an item
what is project management divided into
planning
executing
monitoring
completing
provision of services
preparing do deliver good customer service
quality control
business reviews quality of all factors involved in production process
quality assurance
way in which business sets out procedures to assure consumers products are right quality
calculation for wastage
no. of rejects produced/ total no. produced
total quality management
all employees are responsible for checking products on production line
emphasis on prevention of mistakes
why is TMQ used in a business
focus on needs of customer
improve quality
involves employees
how will training employees improve quality
do job properly in first place
know exactly what to look for when checking
rectify mistakes quicker
benchmarking
comparing business with its competitor in order to improve own practices
how is benchmarking done
compare products+how they’re produced
limitations of benchmarking
limited access to (trade secrets)
difficult to implement if don’t have right resources
external quality standards
British standards
European standards
international standards
British Standards
reward business that adopted certain quality procedures
European Standards
oblige members to make standards national and precident
benefits of following external quality standards
quality assurance labels attract customers
help reputation
pressure for products to remain this quality (helps reduce costs)
international standards
Guidelines or standards developed for use worldwide. International Organization for Standardisation most well known .
what factors affect the choice of location of a business (10)
government incentives planning reg globalization type of market type of business cost of labour cost of a site infrastructure competition consumers
logistics
includes the integration of supplies, production, warehousing and transportation
supply change management
strategic co-ordination of business functions in supply chain to match supply +demand
warehousing (logistics)
stocks/finished goods ready- lowers risk of production problems
large fixed costs
customer requirements (logistics)
more urgency for perishable products to arrive on time
information systems (logistics)
good ICT system connects departments
communicate demand+co-ordinate
transportation (logistics)
how? road/rail
cost in buying+operating vehicles
reshoring
business returning production to the host country
reasons for reshoring
certainty around delivery times (including shorter delivery times)
Minimising risk of supply chain disruptions
Reducing the complexity of supply chain
easier to collaborate with home-based suppliers
outsourcing
doesnt do all tasks
other are specialised in the tasks required and can do it better and cheaper
why outsource
way of reducing costs
managers can concentrate on less things
offshoring
relocation from the home country to a different international location.
reasons for offshoring
lower manufacturing costs
higher quality supply
advantage free trade areas
important to be located in, or near to, those markets they serve
subcontracting
production of a particular part of the product is undertaken by another firm
service
the action of helping or doing work for someone
