Section 4 Flashcards
Enterprise resource planning - ERP
Use of a single computer app to plan the purchase and use of resources in an organisation to improve efficiency of operations
~> allows for the coordination and linking of all systems
Supply chain
All of the stages in the production process from obtaining new material to selling the product to customer
~> Supply chain management
Significant application for ERP
Stages of SCM :
• plan - decide on resources needed
• suppliers - choose most effective suppliers and ordered JIT
• cost - record costs and calculate price
• manufacture - check quality and monitor progress
• deliver - choose transport system and deliver most effectively
Capacity utilisation
The proportion of maximum output capacity currently being achieved
Current output level x100
Maximum output level
~> Used to determine operational efficiency
Excess capacity
Exists when the current levels of demand are less than the full capacity output of a business - AKA spare capacity
Rationalisation
Reducing capacity by cutting overheads to increase efficiency of operations
Full capacity
When a business produces at maximum output
Capacity shortage
When the demand for a business’s products exceeds production capacity
Outsourcing
Using another business to undertake a part of the production process rather than doing it within the business using the firms own employees
Business- process outsourcing - BPO
A form of outsourcing that uses a third-party to take responsibility for certain business functions, eg. finance
Lean production
Producing goods and services with the minimum amount of waisted resources while maintaining high quality
Wastes of time: • Excessive transport • High worker movement • High inventory holding • Waiting time • Over production • Over processing • Defects
Consists out of:
• JIT
• Kaizen
• Flexible specialism
Simultaneous engineering
Product development is organised so that different stages are done at the same time instead of in sequence
Cell production
Splitting flow production into self-contained groups that are responsible for whole work units
Kaizen
Works on the process that workers have greater insight into productivity + requires constant small improvements not a once off massive improvement
Quality
Meets customer expectations and fits the purpose
Quality standards
Expectations of customers expressed in minimum acceptable production standards
Quality control
Based on inspection/sample of products
Quality assurance
A system of agreeing and meeting quality standards at each stage of production to ensure customer satisfaction
Stages: → product design → quality inputs → quality → delivery system → customer service/after sales
Quality control techniques
→ prevention
→ inspection
→ correction and improvement
ISO 9000
Internationally recognised certificate that acknowledges existence of a quality procedure that meets certain conditions
Total quality management - TQM
An approach to quality that aims to involve all employees in quality improvement
Benchmarking
Identifying best firm in the industry and comparing performance standards
Stages:
- identify aspects to be benchmarked
- measure the areas performance
- Identify best firm in industry
- compare data to establish weakness
- Set standards for improvements
- change process to achieve standards
- Re-measure
Project
Specific/temporary activity with a start, end date, clear goals, responsibilities and budget
Project management
Using modern management techniques to complete a project from start to finish to achieve objectives in time and cost
Elements: → resources : people/material → time → money → scope: size/scale of project
Management elements:
- Define project with objectives
- Divide into tasks/activities
- Control/check time limits
- Give clear roles
- Provide control of quality, issues and risks
Critical plan analysis/network analysis
Planning technique that identifies all tasks in a project, puts into correct sequence then allows for identification of critical path
Critical path
Shortest possible time in which projects can be completed
Network diagram
Diagram used in critical path analysis that shows logical dependancies between the activities
Total float
Total amount of time an activity can be delayed without delaying the whole project duration
Total float = LFT - duration - EST
Free float
Length of time activity can be delayed without delaying the start of the next activity
Free float = EST of next activity - duration - EST of this activity
