Topic 3 Flashcards
What is production (or operations) management?
Production (or operations) management rferes to all the activities in managing the transformation process.
What is production in business
Production is the process of changing inputs such as labour services into goods and services that can be sold
What is job production
Job production is a method of production in which a product is supplied to meet the exact requirements of a customer
What is flow production
Flow production is when an item moves continuously from one stage of the process to another
What is specialisation in business
Specialisation occurs when individuals focus on a limited number of tasks
What is lean production
Lean production is an approach to production that aims to minimise waste
What is just-in-time (JIT) production
JIT production holds as little stock as possible. Items are ordered just in time to be used
What is Kaizen in business
Kaizen means ‘continuous improvement’. It is an approach to production that aims to achieve change from a series of small steps
What is just-in-case (JIC) production
JIC production holds stocks just in case there is a delay from supplies or a sudden unexpected increase in demand
What is ‘PURCHASING economies of scales’
Purchasing economies of scale occur when the cost per unit falls if large orders are placed with suppliers due to a bulk discount
What is procurement?
Procurement (or purchase) involves selecting suppliers, establishing the terms of payment and negotiating the contract
What is the supply chain
The supply chain refers to all the businesses, people and activities that take part in the production processes from the start until it gets to the customer.
What are logistics
Logistics refers to the movement of goods, services, information and money throughout the production process
What is customer service
Customer service is the part of a business’s activities that is concerned with meeting customers’ needs as fully as possible
What is customer loyalty
Customer loyalty means that a business’s customers make repear purchases because they prefer the business’s products to those of its rivals
What are global markets
Global markets are made up of customers from across the world
What is data analysis
Data analysis involves gathering and examining data to provide useful information that can be used for decision-making.
What is a buffer stock
A stock of raw materials held in reserve to protect the production process from unforeseen shortages
What is inspection
Inspection is the Testing/examining items to check that materials or items conform to the specified requirements/standards.
What is management
Management is organising/coordinating business activities in order to fulfill production and meet the business’ objectives
What is product knowledge?
An in-depth understanding of the features, use and application of the good/service that will enabke the person selling it to provide any information that the purchaser wants before committing to buy.
What is it meant by ‘product recalls’
The withdrawal from sale by the manufacturer of a defective or contaminated item
What does productivity mean in business
The amount produced by a worker/machine/factory in a given time; the ability to produce more output with fewer resources
What does purchasing actually mean in business
The business buys the goods and services that it needs for producing the goods it sells or for delivering the servuces it sells
Why do some businesses use raw materials
Businesses that use raw materials that are heavy and/or bulky choose to locate close to their suppliers to reduce the cost of transport or storage.
What is Total Quality Management (TQM)?
TQM is a philosophy that involves everyone in the business in the quest for continual improvement in the attitudes, practices, structures and systems that combine to create a top-quality product
What is unit cost and how do you calculate it?
Unit cost is the average cost of each unit
Unit cost = total cost / quantity
What are ‘after-sales services’?
Meeting of customer needs after they have purchased the product. For example; by repairing or servicing the product
Who are suppliers
Supplies are businesses/people that provide goods or services for businesses
What do businesses consider when choosing suppliers (PQR)?
- price
- quality
- reliability
What does ‘price’ mean terms of choosing suppliers?
How much the business is willing to pay for the suppliers
What does ‘quality’ mean terms of choosing suppliers?
The extent to which the suppliers meets or exceeds the expectations of their customers
What does ‘reliability’ mean terms of choosing suppliers?
The ability of the supplier to consistently meet the requirements of the business
What us just in case (JIC) production equal to?
JIC = buffer stocks
What are some advantages of JIC production?
- ability to deal with fluctuations in demand
- reduces chances of production stopping if there are any problems with suppliers
- allows company to negotiate bulk discounts and switch suppliers easily
What are some disadvantages of JIC production?
- stock may go out of date
- more difficult to tailor products to individual customers needs
- costly to share stock
What does it mean by ‘efficiency in production’?
Making the most possible out put given their inputs (LLCE).
- land
- labour
- capital
- enterprise
What are some examples of efficiency in production?
- reduced levels of waste
- lower average unit costs
- increased profitability (due to higher productivity)
What are average unit costs and how do you calculate it?
Average unit costs = total costs/output
They are a measure of how effectively a business is using its scarce resources to generate output
What are some advantages of JIT production?
- lower storage costs
- less stocks go out of date
- excellent relationship with suppliers
- products can be customised for each other
What are some disadvantages of JIT production?
- may not be able to deal with sudden increase in demand
- suppliers may not be reliable
- damage to brand if they cant meet customer orders
- requires excellent relationship with suppliers
- may reduce chances of negotiating lower prices on bulk orders
What are some advantages of job production?
- high levels of customer satisfaction
- can charge high prices for unique products
- workers tend to be highly skilled and motivated by the interesting work
What are some disadvantages of job production?
- highly skilled workers require higher wages
- high prices may exclude many customers
- production time consuming
- lack of opportunities to benefit from economies of scale
What are some advantages of flow production?
- product production is consistent
- labour costs are lower
- materials purchased in large quantities so are cheaper
- large number of products reduced
What are some disadvantages of flow production
- machinery is expensive
- workers are not motivated (repetitive work -> reduced productivity)
- if one part of the line breaks, the whole production process will stop until repaired
How would you measure the quality of goods? (PRPRD)
- physical appearance
- raw materials
- performance
- reliability
- durability
How would you measure the quality of a service?
- customer satisfaction
- skill/knowledge of provider
- waiting time
- speed of service
What are some benefits of providing a good quality product?
- creates a positive brand image and unique selling point (USP)
- can charge high prices
- reduces waste
- increases efficiency
- lower costs of dealing with complaints and refunds
What are some costs of providing good quality?
- training staff
- costs of raw materials increase
- more money spent (less profits accumalated)
What are some advantages of TQM?
- increased motivation
- low wastage level
- achieve certification for quality assurance
What are some disadvantages of TQM?
- relies on commitment of employees (they have to believe in the philosophy)
- training costs cost more
- time consuming production process
What is Total Quality Control (TQC)?
External inspector checks quality at the end of the production line
What are some advantages of TQC?
- monitored by experts
- common problem can be identified
What are some disadvantages of TQC?
- takes responsibility
- lack of motivation
- waste levels high
- specialist wages may be high
How can customer service be effectively provided?
- customer engagement (creating a positive experience)
- having staff with excellent product knowledge
- post sales service (user training, help lines, servicing)
What are some benefits of customer service?
- customer retention
- customer referral
- new customers
- motivated staff
- few complaints
- can charge high prices
What are some costs of good customer service?
- staff training (more expensive)
- time and costs dealing with complaints increase
- cost of high quality raw materials increase
- cost of maintaining good premises (fast websites / AI responses) increases
What is the sales process?
- contact with customer
- inform customer of benefits of purchase
- customer samples
- price agreed
- delivery of product
- post sales service
How has ICT changed the way businesses provide customer service?
- through websites (live chats, FAQs, real time delivery tracking)
- through e-commerce (home delivery, wide range of products, fast AI responses to online customer queries or reviews)
- through social media (live updates and announcements)
What are the four parts of outsourcing? (PPPD)
- production
- payroll
- purchasing
- delivery
What are the cons of production in outsourcing?
- Larger businesses may require large quality management facilities and dedicated staff, leading to high expenses.
- Cost pressures may compel businesses to reduce quality management efforts, potentially resulting in negative consequences for product or service quality.
What are the cons of payroll in outsourcing?
- Quality management becomes more challenging as businesses expand.
- Larger businesses may require extensive facilities and dedicated staff for quality management, leading to high expenses.
- Cost pressures may result in businesses reducing quality management procedures, potentially harming overall quality.
What are the cons of purchasing in outsourcing?
- Outsourcing requires regular monitoring and inspection of the contracted business to ensure they meet the main business’s needs.
- Continuous oversight ensures quality and compliance with standards in manufacturing or customer service tasks.
What are the cons of delivery in outsourcing?
- Outsourcing to high-quality businesses can be costly but ensures high standards and satisfaction.
- Choosing low-quality businesses for outsourcing may result in problems like late deliveries and poor-quality products.
How would quality in a franchise be maintained?
- Franchising makes quality management challenging, requiring strict policies, training, and inspections to maintain consistent service levels across all outlets.
- Rigorous policies, training programs, and routine inspections are necessary for ensuring franchisees meet performance expectations and maintain quality consistency.
