Section 3 Business Operations Flashcards
What 3 factors do businesses need to consider when choosing supplies
Price-Cheaper suppliers will often supply lower quality products.
Quality-The quality of suppliers needs to be consistent as customers will associate poor quality with the business they buy from ,not the suppliers.
Reliability-If a supplier lets a firm down the firm may not be able to supply it’s own customers.
What is procurement
Finding and buying things that a firm needs from suppliers e.g clothes manufacturer suppliers would involve finding and buying the material it needs.
What is logistics
Getting goods or services from another part of the supply chain to another e.g clothes manufacturer would need to have material to transport to it’s factory.
Why is it important have effective procurement and logistics
It improves the efficiency of a business as a result of this there will be no breaks in production and material doesn’t have to be wasted.
It can also reduce overall costs of the business because it’s efficient it will reduce overall costs so the firm can make more profit.
Why is managing a supply chain effectively very important (3 factors)
Good relationship with suppliers-Makes it more efficient and cost effective
Finding the best price and value-There are many suppliers to chose from,businesses can research potential suppliers so they can make sure they are getting the best value.
Reducing waste and unnecessary costs-They should only buy suppliers they need,reducing waste and unnecessary costs can make a business more streamlined.
What is job production
Job production is used when a firm manufactures individual,unique products
What is lean production
Aim to make businesses more efficient by reducing waste which ensures quality.
What is just in time production
Businesses have no spare products,inputs arrive and outputs are produced just when they are needed.
Benefits of just in time production
-Stock levels are kept to a minimum
-Less waste
Disadvantages of just in time
-Reliant on good relationship with suppliers
-Could be disruptions in transport
-Requires careful planning
What is job production
Where a product is made specifically to customer requirements.
Advantages of job production
-Products are usually high quality
-Products are made specifically for the customer
-High prices can be charged
Disadvantages of job production
-Labour is very intense therefore it’s suited to machinery
-Requires skilled employees
-Workers may demand high wages as it’s very hard work
What is flow production
Continuous movement of items through the production process.
Advantages of flow production
-Can produce on a larger scale
-Consistent standard of quality
-Uses less labour than other production methods.
Disadvantages of flow production
-Jobs are competitive and can lower motivation
-Less skilled employees are required so this may require in low staff retention.
What are factors that will influence the type of production method chosen
Level of demand-Flow production is suited to products that are sold to the mass market
The type of product-Some products can only be made through job production
What is procurement
The process of managing ordering and receipt of the goods and services in the business
What is Stock management
The process of managing stock involves ensuring sufficient of raw materials and finished goods
Advantages of just in case stock
-Spare stock available incase of a sudden increase in demand
-Production is less reliant on suppliers as production schedule will not be delayed.
-Spare products are available incase of unexpected errors.
Disadvantages of just in case stock
-Stock might go out of date
-Prices may need to be reduced to sell excess stock
-Higher stock holding means a need for more storage space.
What are logistics
A process of plan which controls the distribution of goods and services from when they are received from the supplier to when they are delivered to the customer.
What is the supply chain
The network of organisations that get the product to customers
Advantages of a supply chain
-increased efficiency
-Improved flexibility
-Lower unit costs.
