Theme 2: Resource management Flashcards
Enterprise resource planning (ERP)
Planning that logs all of a firm’s costs, working methods and resources (machinery, labour, stocks of materials) within a piece of software; this provides a model of the business that can be used to answer questions such as ‘When do we need to start working to get stocks made in time for delivery before Christmas?’
Supply chain
The whole path from suppliers of raw materials through production and storage on to customer delivery
Barrier to entry
Factors that make it hard for new firms to break into an existing market (for example, strong brand loyalty to the current market leaders)
GDP
Gross Domestic Product is the value of all the goods and services produced in a country in a year
Job enrichment
Giving people the opportunity to use their ability (Professor Herzberg’s definition)
Lean production
Focusing on minimising wastage of resources throughout the supply process, e.g. minimum stock levels and minimum wastage through poor quality
Downtime
Any period when machinery is not being used in production; some downtime is necessary for maintenance, but too much may suggest incompetence
Excess capacity
When there is more capacity than justified by current demand (that is, utilisation is low)
Rationalisation
Reorganising in order to increase efficiency. This often implies cutting capacity to increase the percentage utilisation
Subcontracting
Where another business is used to perform or supply certain aspects of a firm’s operations
Buffer stock
The desired minimum stock level held by a firm just in case something goes wrong
Competitive advantage
A feature that gives one business an edge over its rivals
Competitiveness
The extent to which a firm can stand up to - or beat - its rivals
Opportunity cost
The cost of missing out on the next bet alternative when making a decision (or when committing resources)
Stockholding cost
The overheads resulting from the stock levels held by a firm
