Topic 2.4 Resource management Flashcards
Mrs Hudson
Job Production
Producing a one off item for a one off customer
Advantages of job production
- Meets individual customer needs
- High quality so can charge a higher price
- Motivated workers
Disadvantages of Job production
- High production costs
- Very labour intensive
- Time consuming
- Need skilled labour
Batch production
Producing a set number of identical products
Advantages of Batch production
- Using the same machinery
- Lower skilled workforce - lower wages
- Employees are specialised
- Items can be changed to fit trends
Disadvantages of Batch production
- Workers may be less motivated as the tasks are repetitive
- Long time between batches (cleaning equipment)
- Small batches may have high uni costs
Flow production
Continuous production of one single item
Advantages of flow production
- Lower average unit cost as bulk producing
- Automation means quality is always the same
Disadvantages of flow production
- High set up costs because of machinery and automation
- Machinery may break
- Low motivation as tasks are repetitive
Cell production
The production of items being organised into groups then the teams are sent to statins to see the product through to competition
Advantages of Cell production
- Minimal handling of the product reduces costs
- Lead time is reduced
- Motivated workers
Disadvantages of cell production
- May have tension in a cell
- Huge investment into machinery for each cell
Calculating Labour productivity
Output / No. of workers
Calculating Capital productivity
Output / No. of machines
Factors that influence productivity
- Employee motivation (Motivated workers produce more)
- Skills, education and training staff
- Business organisation (Flexible workplaces improve the commitment of workers)
- New technology (increase automation can increase productivity)
The link between productivity and competitiveness
- Having higher productivity will lower your costs and then you can pass these on to your customers which will make you more competitive
Calculating efficiency
Output / Input x 100
Factors that effect efficiency
- Employee motivation
- Technology
- Outsourcing
- Adoption of lean production techniques
Advantages of capital intensive
- Low cost production
- Machines can run without breaks
- Machines are consistent and precise
Disadvantages of capital intensive
- Significant start up costs
- Break downs can severely delay production
- May not be flexible
Capital intensive production
- Predominately uses automation and technology
Labour intensive production
- Predominately uses physical labour
Advantages of Labour intensive
- Low cost
- Provides opportunities for workers to be creative
Disadvantages of Labour intensive
- Workers may be unreliable as they need breaks
- Incentives may be needed to motivate staff
- Training costs may be expensive
Calculating Capacity utilisation
Current output / Maximum possible output x 100
Implications of Over - utilisation
- high level of capacity utilisation - not flexible to respond to new orders from customers
- Staff will be under a lot of pressure to produce high levels of output
- Stuggle to service machinery
Implications of Under - utilisation
- increased unit costs
- Provides flexibility
- The business can respond to sudden increases in demand
- Inefficient
Ways to improve capacity utilisation
- Outsourcing
- Increase workforce hours
- Sub contract
- Reduce time maintaining equipment
What is buffer stock?
- A quantity of raw materials or goods kept incase of unforeseen demand
Advantages of Buffer stock
- Keep up with demand
- If deliveries are delay production can carry on
Disadvantages of buffer stock
- Storage Cost and space
- Stock may become dated
- Opportunity cost (Holding buffer stocks ties up capital)
What is just in time?
- Stock is ordered as required, and delivered by suppliers ‘just in time’ for production
Advantages of just in time
- No Stockholding costs
- Cash flow is improved as money is not tied up in stocks
- Unused storage space is available for productive use
Disadvantages of just in time
- Bulk buying economies of scale are not generally possible
- The ability to respond to unexpected increases in demand is reduced
- Administrative costs related to frequent ordering are increased
- Unreliable suppliers (e.g. late or poor quality deliveries) can quickly halt production
Ways to minimise waste
- For perishable items, refrigeration and careful stock rotation
- Staff training and computer inventory management systems
Competitive advantage from lean production
- Lower unit costs are achieved due to minimal wastage, so prices may be lower than those offered by competitors
Quality control
- Inspecting the quality of output at the end of the production process
Advantages of quality control
- No defective items are sold
- No much staff training is required
Disadvantages of Quality control
- Not every item is checked
- Takes time
- The product gets to completed while defected so waste of resources
Quality assurance
- Inspecting the quality of production throughout the production process
Advantages of quality assurance
- All products are checked
- Products can be re worked as the issues are identified early
Disadvantages of quality assurance
- Takes a long time to check
- More staff need to be employed
Quality circles
- Groups of workers meet regularly to solve quality problems identified in the production process
Advantages of quality circles
- Can improve staff motivation as they have a say
Disadvantages of quality circles
- Whole group of employees have to agree
- Can cause tension
Total quality management
- Organisation of the business with quality at its core and with every worker responsible for quality
Advantages of Total quality management
- Deeply routed into the business - everything is always checked
Disadvantages of Total quality management
- Requires extensive training and time
- Requires commitment from the whole organisation
Kaizen
- Kaizen involves a business taking continuous steps to improve productivity and eliminate waste in the production process
- Changes are small and ongoing rather than significant one-off’s and are constantly reviewed
Competitive advantage from quality management
- Unit costs are low if a business takes a preventative approach (quality assurance or TQM)
- Low costs may allow a business to reduce its selling price to better compete with or undercut its rivals
Implications of poor stock control
- Storage costs
- Risk of stock being dates or ruined
- May run out of stock
- Can’t meet demand
lean production
- Approach to management that focuses on cutting out waste whilst ensuring quality
What is productivity?
- The measure of the efficiency of a person, machine or process of production
3 types of stock
- Raw materials
- Work in progress
- Finished goods
