Unit 3- Operations Flashcards
What is the role of the operations department?
To provide the products that the organisation offers
Give examples of Inputs
1) Raw Materials
2) Labour
3) Machinery
Give examples of processes
1) Production
2) Works in Progress
Give examples of output
1) End product ready to be sold
Give examples of factors to consider when choosing a supplier
The Cost of the Raw Materials - cost needs to be kept as low as possible
Quality of Raw Materials - without high quality Raw Materials the finished product cannot be high
Quantity of Raw Materials - supplier needs to be able to deliver the correct amount required
Delivery/Lead Time - They place and receive orders in time so production doesn’t stop
Location of Supplier - the distance decides how long raw materials take to be delivered
Reliability and Reputation - an unreliable business might result in production stopping
What is the importance of having inventory management?
Methods must be used to ensure that the costs of holding stock are as low as they can be while ensuring stock is available for production when needed.
What are the purposes of Stock Control systems?
- To anticipate and prevent running out of stock before it happens
- To ensure production will always run interrupted
- To ensure customer orders are not delayed
- To avoid overspending on unnecessary storage space
What is:
1) Understocking
2) Overstocking
1) Not having enough stock available
- the business may run out of stock and be unable to continue producing
- will not benefit from bulk buying discounts
- increased administration and delivery costs
- orders could be delayed
2) Having too much stock
- more storage space is required
- money is tied up in stock
- additional security and insurance costs
- stock may deteriorate or go out of fashion
- staff may be able to steal easier
What is the re-order level?
The level at which stock should be re-ordered, taking account of usage and lead times.
What is re-order quantity?
The amount that is ordered to take the stock back up to maximum level.
What is lead time?
This is the time taken between an order being placed and stock arriving.
What is maximum stock level?
The highest level of stock that should be held.
What is the minimum stock level?
The level that stock should not fall below in order to avoid shortages.
What is :
1) Just in Time Inventory Control
2) Centralised Storage
3) Decentralised Storage
1) A method of stock control where stock arrives just before it is needed.
They hold small amounts of stock and rely on their suppliers.
Production does not start until a firm order is received.
2) Involves storing inventory in one central location in a large, purpose built warehouse.
3) This involves storing inventory in many locations in smaller warehouses or store rooms.
State the Advantages and Disadvantages of Just in Time control.
Advantages
- No money is tied up in stock
- No warehouse is required
- Reduces storage costs as stock is delivered as it is needed
- Reduces wastage
Disadvantage
- Organisations can lose out on bulk-buying discounts
- can result in high admin and delivery costs
- late deliveries can result in understocking
- relies heavily on supplies cooperation in delivering stock
State the advantages and disadvantages of centralised storage
Advantages
- warehouses can store a massive amount of stock
- organisational procedures can be developed for ordering and receiving stock
- duplication of stock is reduced
- security is improved
Disadvantages
- specialist staff are required
- large amounts of stock are held, which leads to an increase of wastage
- stock delivered to each division causing delayed
State the advantages and disadvantages of de-centralised storage
Advantages
- smaller amounts of inventory result in no negative consequences of overstocking
- inventory is always at hand
- smaller, more local warehouses are more responsive
Disadvantages
- lack of specialist staff can lead to inventory control being clumsy and inefficient
- each division may handle inventory differently
- smaller amounts of inventory can result in negative consequences of understocking
What is Job Production?
Advantages and Disadvantages?
It is used to produce unique, one off products.
Products made one at a time.
Each product is finished before making onto the next one.
Products are tailor-made to exact individual customer requirements.
Advantages- higher prices charged, products can match exact customer requirements, increased staff morale.
Disadvantages- highly skilled staff are required, lead times can be lengthy, Materials may need to be ordered for each individual job
What is batch production?
Advantages and Disadvantages?
It is making products in small groups.
All products in each group are identical but each batch can be different.
All products in the batch move onto the next stage of production at the same time.
Advantages- materials can be bought in bulk, batches can be adapted to meet customer requirements, costs are lower than job production.
Disadvantages- If a mistake is made it can ruin an entire batch, workers complete more repetitive tasks, Time can be lost through the cleaning and resetting of machinery.
What is Flow Production?
Advantages and Disadvantages?
It involves identical products being made on an assembly line.
Product is made in stages with different parts being added at each stages.
Continuous output of products.
Tends to be capital-intensive.
Advantages- huge of quantities of products can be made, workers/machinery specialise in the same routine tasks, labour costs are lowered, often capital intensive.
Disadvantages- products can not be adapted to meet customer requirements, work can be repetitive, machinery breaks down the full production line stops.
What is capital-intensive production?
Advantages and Disadvantages?
It involves producing products that primarily use machinery and equipment.
Made primarily used technology.
It can utilise either automation or mechanisation.
Advantages- machines can work 24/7, quality and accuracy can be standardised and be more consistent, improved productivity, less wastage.
Disadvantages- If machine breaks down production is halted until repairs can be made, maintenance costs are high, restricted output from machinery, replacing employees with machines will demotivate employees.
What is Automation?
It refers to production being fully automatic.
This involves the use of computer aided manufacturing (CAM) to control fully automated assembly line that use robotics.
Human input is not needed or very little is required.
What is mechanisation?
It refers to labour and machines working together to produce products.
Production requires a mix of both machinery and labour to operate it.
A traditional example is a mechanism operating a sewing machine in a textile factory.
What is labour intensive production?
Advantages and Disadvantages?
Involves humans doing most of the work.
It relies on humans rather than machines to create products.
This is most common in job production.
Advantages- humans use initiative and creativity, skilled workers can adapt to what they need to produce, employees are more motivated.
Disadvantages- skilled employees demand higher wages, expensive to recruit skilled employees, at high risk of human error, more waste, limited working hours, inconsistent quality and productivity.