Section 10 - Organisational Structure Flashcards
What is job production?
Making a one off unique product, single + customised, tailor made, meet needs of consumer
What are the advantages of job production?
- Unique
- Higher quality
- Can charge high prices
- High profit margin
What are the disadvantages of job production?
- High costs - materials
- Need skilled workers as labour intensive
- Slower
- Machinery often idle
What is batch production?
Making a group of similar products at once
What are the advantages of batch production?
- Lower unit cost
- Wide product range
- Flexibility
- Less idle machinery
What are the disadvantages of batch production?
- Lots of waste if one batch goes wrong
- Varying quality in batches
- Reliant on one machine
- Costly storage needed
- Lower quality products
What is mass/flow production?
- Making lots of the same product continuously
- Identical
- Made in large quantities
What are the advantages of mass/flow production?
- Quicker
- Cheaper as lower unit costs
- Same quality across all products
- Large outputs
What are the disadvantages of mass/flow production?
- Not unique
- Mistakes result in a lot of wasyte
- Lower quality
- Inflexible
- Repetitive work
- Lower profit margins
In terms of production, how might a business change as it expands?
- Moves from job/batch to mass/flow
- Labour intensive to capital intensive
What are the advantages of moving from batch or job production to mass/flow production (labour to capital intensive) as a business grows?
- Reduced costs for staff as less skilled
- Lower unit costs
- Target larger orders, increase capacity
- Increase efficiency
What are the disadvantages of moving from batch or job production to mass/flow production (labour to capital intensive) as a business grows?
- Initial high costs (machinery)
- Nothing unique, no USP?
- Quality could suffer
- Redundancies
What are the different methods of lean production?
- Kaizen
- JIT (just in time)
- Cell production
What is lean production?
- Cutting away anything that is not necessary for production so no wastage
- Carry no excess at all
- Efficient
- Maximum productivity
What is Kaizen?
Making a product, see how it can be improved, make again, see how can be improved again
What is JIT?
- Just in time
- Where inputs into the production process arrive only when they are needed
- Less storage
- Order when you need it
- Dependence on suppliers (can affect whether you can supply customers
- No economies of scale
What is cell production?
- Where workers organised into multi-skilled teams w/ each team responsible for a particular part of production process
- Teams
- Different skills/ideas
What are the advantages of JIT?
- Saves money on storage
- Less likelihood of wasted stock (e.g. out of date)
- Less build up of unsold product
What are the disadvantages if JIT?
- No room for mistakes as could be costly
- Reliant on suppliers
What are the advantages if cell production?
- More motivation from more variety of work
- Higher quality as each cell has ownership for quality on area
- Members within cell are close so better communication
- Become multi-skilled + more adaptable
- Can cover if one sick
What are the disadvantages of cell production?
- Staff need to be trained
- Have to assign staff enough so they can work efficiently but not overdone
- Can not use machinery as much
What are the advantages of kaizen?
- Constantly making product better
- Adaptable to customer requirements
- Less need for inspection as improved always
- Better teamwork
What are the disadvantages of kaizen?
- Time consuming
- Can be demotivating, accepting failures
- Varying quality
How can a business measure productivity?
- Output per worker, as high as possible
- Labour turnover, low = managing to retain staff, high = might be indicative of problem
How do you work out output per worker?
Total output / number of staff
How do you work out labour turnover?
Number of staff leaving / average staff x 100 [%]
What is quality?
Achieving a standard for a particular product or service which meets customer needs
Why is quality important (especially compared to in the past)?
- More competition, need to be cheaper
- Lots of people want better quality
- Brand image/reputation; customer expectations higher as review negatively otherwise
- Expect life cycle
- Constantly evolving in what expecting as customer
- Government legislation
What makes a product sub standard?
- Not fit for purpose
- Not durable, breaks
- Poor customer service
- Poor instructions
- Delivered late
What methods are there to ensure quality standards?
- Quality control
- Quality assurance
- TQM, total quality management
What is quality assurance?
Checking the quality of the product as you go
What is quality control?
Checking the quality of the product at the end
What is TQM (total quality management)?
Everyone responsible for managing quality
What is specialisation/division of labour?
Work in specific area where skill set
