production- operations Flashcards
importance of purchasing and working with suppliers
to build customer satisafaction and loyalty the following criteria want to be fufilled: affordability, accessability and quality
for this ti take place need effieicnet production processes, which can lead to satisfaction via e.g. competitive pricing, timely delivery and consitent quality
- affordability can occur by, taking advantage of economies of scale, bargaining for lower prices and, identifying cost saving opportunities, minimising waste- lean production techniques
- consitent quality- ensuring quality control/ assurance occurs, setting quality standards to be followed, choosing reputable suppliers, inspections of production process.
accessability- alining activities with demand forcasts created via e.g. electronic systems or histoircal forecasts, such as production schedules, inventory managment, stock control, to allow for reduced lead times, minimise srtock outs and increase efficiency
very important to have a good relationship with supplier to ensure all- quality, accessability and affordabulity, able to negotiate e lower terms, able to ensure timely delivery and flexible delivery,minmise delays and ensure have sufficent stock and consistent quality
suppliers can also offer insights to improve, e.g. differing production proce4sses help improve effeiciency, innovative solitions, product development, ways to increase compeititv advanatge
key concepts of stock managment/ control
ensure that goods are not sat around loosing value/ nor adding value but also ensure that have suffient funds to meet demand
- e.g. ensuring that no raw materials are sat around holding up working capital
- ensurong that no finsihed goods are sitting around perishing, made when there isnt demand for them
aiming to bring inventoey to next stage of production process
- montoring flow of inventory in and out of th ebusiness
ensuring there is adeuqate stock levels to meet demand- minimise the risk of stockouts
- easier stock rotation - using older stock before new, buffer stock is small and deliverys regular, easier as stock used after delivery
define all the features of traditional stock control
maximum stock level - this is the maximum level of stock that a firm holds at one time, the level they restock to.
reorder level- often between min and max- level of stock at which new order placed
minimum stock level- lowest amount of invenotry compant wants to maintain to avoid stock out
buffer stock- level of stock between minimim stock level and 0- often incase problems with delivery
lead time- the time it takes from reorder to delivery-( reorder level to lowest point )
what is just in time
just in time is a production method used to minimise any wastage and is based on demand for good/ service
raw materials/ compoenets are not delivered until demand for product/ service occurs and is not made until demand occurs
this avoids any tied up working capital and avoids finished goods perishing/ obsolete
this will minimise costs, improve loquidiity, improve efficiency
although ti requires…
effieicnet ordering system- to order new resources when demand occurs
goof relationship with suppliers to allow for flexbile deliveries to be made
requires a trained workforce and work well in teams as well as a cooperative culture where they are encouraged to set and achieve goals as a team and individually often benchmarked off most successful businesses
- does the cost of extra delivery outwreigh the saving from reduced warehouse space
- if have unexpected order may not be able to meet
- relies heavily on suppliers
what is computerised stock control
holds businesses stock levels on computerised data bases, improving accuracy, effienceny meaning that suppliers can have access to when stock is running low/ falls beloe reoder level to prepare for
as soon as stock declines computer system automatically updates
e.g. EPOS
-increased accuracy
- increased effieicney
- minimised mistakes
- helps forcast future sales minimise under/ over stocks
- reduce wastage. theft
although…
technoloy can fail
may require training staff tp use new system
depends on size of business, for small businesses system will be too costly and not neccisarily neccisary
concequences too much. too little stock
too much stock- worsening liquiditiy as working capital is tied up in assets, finished goods can perish/ go obsolete- wastage, higher storage spaces
too little- orders late/ cancalled reducing brand image/ reputation, worsened profits, employees may me made redundant
