Resource Managment Flashcards
Total quality manufacturing
Employees taking responsibility for quality
Errors or problems are detected at each stage
System of TQM
Everyone involved
Teamwork build trust + skills
Consumer feedback
Quality circle
Small groups of employees who meet to identitfy + solve work related problems
Job productions
Small number of teams produced to make a customer specific
Small specialist business
High quantity
Higher quality more flexible can be motivating
Disadvantages- can’t produce as many scales usually reliant on high skills production cost
Batch production
Produced together , each batch goes through one stage before moving into the next batch
Flow productions
Product moves continuously through production
One task finish next starts
Adv : cost per unit of production reduced through improved work + material flow
Suitable for manufacturers
Capital intensive
Less need for training and skills
Dis: long set up time
High raw materials+ finished stocks unless lean production used
Production shut down if flow is stopped
Cell production
Work assigned into teams
Cells contain people similar skills using similar equipment similar task
Adv - you can do different versions = variety makes employees motivated reducing costs
Adv cell production
Quick feedback on quality issues - fix problem before they spread
Reduce amount of inventory needed to create product
Adapt and change to customer needs = flexible
Dis cell production
Machinery breaks down —> lead production to bottleneck
Move machinery + training can take time
Operating management
Ensure quality
Added value
Operate efficiency
Cocoordinating supply chain
Managing resources
Resource management
Deciding where to locate business
Choose right resource use in production
Utilising all resources effectively (capacity utilisation)
Provide customer service
Operating management targets
Improving productivity level
Controlling unit costs of production
Measuring + controlling quality levels
Product efficiency
Business will produce lower costs goods than competitiors
Efficient business will produce lower costs goods than competitiors
Division of labour
Adv: leads higher skills + faster work
Dis: get bored + demotivated
Slower at work
Education + training
Adv: increase skills means work faster / quality = less errors
Dis: increase skills could increase pay and wages which can increase the money output
Motivation of workforce incentive
Less sick days happier = more productive
Dis: to fast could result in errors = too happy = distracted
Working practices
Adv: close proximity to resources + equipment = increased productivity
Dis: no break or change of equipment
Flexible workforce
Increase motivation = and lifestyle
Dis: distraction level up lack of control of staff
New technology
Increase efficiency + productivity
Dis: lack of employee skills
Demotivated / deskilled workers
Improve productivity
Training
Improve motivation
More capital / equipment / technology
Improved organisation of production e.g less wastage
Economies of scale
Efficiency
Making best use of resources to gain maximum output
Standardisation
Products are identical
Easier to produce no extra time needed to change production + no other equipment
Outsourcing some activities
Paying another business to do some activity for you
Improve quality
Improve flexibility
Relocating
Moving site possibly larger or smaller
Impact allows more machinery / equipment —> save time if everything at 1 place
Delayerijg
Remove a layer in hierarchy
Economies of scale
Arose when costs fall as output increases
Buy in bulk it’s cheaper
Long run average costs
Firm expands its size starts new short run average cost
Increase in production allows even lower costs to be achieved
Diseconomies of scale
When business grows to large that costs per unit increase
Employ too many people leads to miscommunication or lack of control
Management of too much plant + machinery can be difficult to plan + control
Internal economies of scale
Arise from increases output of business itself
External economies of scale
Occur within an industry - all competitiors benefit
Associated with geographic areas
- specialist suppliers close by
- pool of skilled labour to choose from
Capital
Majority of the work is done by Using automation
Adv of labour
Customised products easier to make
Less expensive machinery
Dis capital
Quality of product can vary due to expertise
Hugh investment
Dis labour
Greater risks of problems / employee/ employer relationships
Need for continuous investment + training
Adv capital
Lower labour costs
Better productivity
Better quality / speed
Types of inventory
Raw materials
Work in progress
Finished good
Affect wastage
Poor workmanship
Damage to raw materials during storage - transport
Lead time
How long it takes for the supplier to deliver the order
Opportunity costs
Holding stock means trying up capital (cash)
Business may have used for investment or cash flow
Spoilage
Longer stock are held , greater the risk that come damaged or out of date
Lean production
Systematic menthod for elimination of waste in manufacturing process
Types of waste
D - defective production
O - over production
Principles of production
Just in time for
Kaizen
Total quality manufacturing p
Quality circles
Cell production
Push system
Produce as much as possible
Pull system
B let’s A know when stock is running low
Just in time
Excellent communication between stages of production + suppliers
Flexible approach to management
Kanban
Instructions to produce / send an item or set of items to next link in chain
JIT ADV:
improve cash flow
Reduce waste
Reduce cost of holding stock
JIT dis
Too much reliability
More frequent orders means more admin
Increase cost due to more delivers
Kaizen
Small improvement
Quality
Product or service is of good quality if it meets the need + expectations of the customer
Characteristics of quality product
Tangible :
Appearance
Reliability
Durability
Non - tangible
Imaiage / brand
Reputation
Exclusivity
Business benefit from good quality
Improve sales volume
Cost reductions from waste / re-work
Create USP
Costs of poor quality
Lose customers
Rework or remake product
Replacement / funds
Measure quality
Customer service ratings
Product returns
Quality assurance
Focus on process
Achieve by improving production process
Targeted at the whole organisation
Quality control
Focus on outputs
Achieve by sampling + checking
Targeted at production activities
Quality control definitions
Infection go end product
Quality assurance definition
Design out failure by ensuring quality is maintained at all stages in production Timon process
Inflation
Increase in price level of economy
Dis of batch production
Switch production, size of batch production on capacity allocated
Deflation
Fall in general price level of goods + services
Disinflation
Decrease in rate of inflation
Customer price index
Main measure of inflation for uk
Gov set Bank of England target of inflation of 2%
Low inflation
Price stability
Calculate inflation
Customer price index (CPI)
Internal cause of inflation
Large surge in property prices “wealth affect”
Higher wages / labour costs increase in spending —> increase in price
Boom in credit/ money supply
Rise in business taxes e.g VAT
External cause of inflation
Increase in world oil/ gas prices
Inflation in global commodity prices
Depreciation of exchange rate
High inflation
Demand pull inflation
When there’s excess aggregate demand in economy or market
Business respond to high demand by raising prices to increase their profit margins
Demand pull inflation is associated with boom phase of business cycle
Business cycle
Gross domestic product (GDP) EXPECTED TO GROW
Boom
Peak of cycle gdp growing fast bc economy performing well
Existing firms will be expanding + new firms will enter market
Recession
Bottom of business cycle GDP maybe flat
GDP starts to fall bottom of cycle referred to slump / depression
Demand will start to fall
Exchange rate
Price of one currency expressed in terms of another currency
How much one currency given up order to but specific amount of another currency
Change in currency
Fall in value of currency = depreciation
Value of currency increases = appreciation
Market orientates (supply+ demand)
Devaluation
Action taken by central bank to reduce value of a currency
Some counties do this to boost exports
Stronger, pound , imports, cheaper, exports dearer
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Currency hedging
Take forward contracts to purchase currency at a specific exchange rate in future
Firms who can source suppliers in different countries maybe able to help buy cheaper materials if currency fluctuated go in their favour
Multiple suppliers
Internal trading partners
Having customers in different countries mitigates against the risk that currency fluctuations will affect revenues
Single currency
Firms in countries that trade with firms in same currency are nit affects by currency fluctuations
Price contrast
Agree fixed price contracts in home currency so any change in value won’t impact revenue or demand
EDI/ offshoring
Setting up production abroad means trade can happen without impact of currency fluctuations
Exchange rate cycle
Price change according to demand + supply
As price change demand for goods + services change which affects demand for currency
Cycle process known as an automatic stabiliser
Firm as an importer
String £ makes firm who important raw materials more competitive their costs are reduced
Firm as an exporter
Strong £ will cause demand for exported goods to rise + hence firms become uncompetitive
Level foreign competition
Firms may not see a fall in demand if foreign competition not absorb change in demand , demand for uk exports stay the same
Interest rates
Reward for saving + cost of borrowing
Government spending
Fiscal policy involves use of government spending, taxation + bowwowing to affect the level and growth of aggregated demand
Transfer payments
Welfare payments made to benefit recipients such as state pension + jobseekers allowence
Capital spending
Infrastructural spending such as spending on new roads hospital motorways + prisions
Roles of business legislation
Regulate rights + duties of people in business ensure fairness
Treat employers faire non-discriminatory
Level of fair playing field for all competing busiensss
Protect investors, creditors ,, consumers
