Unit 4 Flashcards
what is operations
operations is responsible for the actual production of the physical goods or services
what are examples of inputs
manpower and machinery
describe how operations work
consists of converting resources and labour(inputs) into goods and services(outputs) = so in the end its added value
what is productivity
how much units are made
the higher productivity means there are lower productivity costs per unit
what is efficiency
minimising waste and costs when producing goods and services, utilises the least amount of resources for maximum output
what is production
this is how raw materials are turned into a product
what are some operational objectives(name 4)
make process efficient and time saving
have more automation in production
reduce costs
improve quality
what is output
amount of something produced by a person or machine
What is a unit
An item or a product
What are resources
What is needed to make a product e.g labour,materials,machines
What is the calculation for unit cost
Total costs ➗ total output
What is the calculation for labour products costs
Output ➗ number of staff
What is labour productivity
The amount of output produced by each employee
What is the calculation for productivity per worker
Total output per time period ➗ number of employees at work
What factors influence productivity
Amount of capital e.g tool machines
Technology e.g IT systems
Human capital e.g skill level
What factors affect efficiency
Tech
Labour
Outsourcing
Service industries
What does labour intensive mean
Using high human intervention e.g services, people on sight
What does capital intensive mean
Relies heavily on automation and machinery
What is capacity
Capacity is a percentage of the business capacity that is actually being used
What is the calculation for capacity utilisation
Actual output ➗ max output X 100
What is the ideal percentage capacity utilisation
90%
Why is 90% the ideal capacity
Allows for a spike in demand
90% is a good efficient number
what is lean production
an approach to management that focuses on cutting waste whilst ensuring quality
what is kaizen
constantly introducing small incremental changes to improve quality or efficiency( continuous improvement)
what does Kaizen depend on
skillset of workers
staff being motivated to improve
relies on democratic leadership
requires everyone to participate
what is good about continuous improvement
more energy efficient
less waste
reduced risk
better customer service
higher capacity utilisation
what is just in time JIT
aims to minimise stock holding and stock wastage
the stock arrives just in time for manufacturing
what does JIT depend on
suppliers as they need to be reliable and up to date
predictability of sales
forecast prediction must be accurate
amount of competition
scarcity of stock
what is over utilisation
trying to produce more than its capital equipment and systems where designed for
what is a pro of working at 90%
unit costs are lower therefore more competitive
balance utilisation with flexibility
what is a con of working at 90%
might not be enough to meet flexibility to meet surges in demand
what are the costs of JIT
warehouse and rent costs
temperature costs
opportunity cost
before you use or sell its a cost
how can you reduce overall capacity
sell off fixed assets
can relocate to reduce size of capacity
however new locations may be too small
how do you increase usage /output
discounts on certain days
promotions and offers when demands are low
make more products
what is outsourcing
third party doing usage on your behalf
giving full control
what is JIC
produce first then try sell the stock
what is redeployment
working in another department or brand where needed
have to have a skillset to be redeployed
what are quality circles
a small group of employees that must meet regularly to look at how quality can be improved
the feedback recommendations go to management
what are some cons of quality circles
can conflict in opinions
cant take all ideas into consideration
takes time off work so someone has to cover shift
leadership might not accept feedback
what are some pros of quality circles
can keep retention high as voices are heard
save management time
its free to hold these circles
getting feedback for free
describe job production
making products individually
specially designed by specialists
one off so premium price is charged e.g wedding dresses and cakes
describe batch production
making a large volume of products at one time
semi skilled workforce
some flexibility e.g bakerys, cars
describe flow production
continuous flow of production in an assembly line
low skill workforce
high automation process e.g newspapers
what is Cell production
production line is reorganised into small teams(cells) each cell develops responsibility for significant part of finished product
how do lean cells work
recues waste, shorter distance to roles, steps placed in sequential order
what are some pros of cell production
saves time of productivity and efficiency
product focused team environment
immediate feedback
what are cons of cell production
depends on workers co operability with other employees
relies on team environment being good
relies on each cell doing job well
what is TQM
TQM puts quality at the heart of everything a business does
all employees are involved and responsible for their work and their team work
what do customers want with a product
is’nt faulty
reliable
safe
can be repaired if necessary
what do customers want with a service
good customer service
after sales service
want to buy from a brand with good reputation
what is warranty
the guarantee by the producer that it will repair or replace any faults for a specific time period
what is quality control
checking product at the end of the production process
if it doesnt meet quality then item is thrown away
what are pros of quality control
quicker
specially trained and skilled empoyees
cheaper than traning employees
what are cons of quality control
waste
high costs
risk that customer receives faulty products
what is quality assurance
everyone is accountable for every stage of production process and every employee is skilled
what are pros of quality assurance
less waste
less defects
reduce costs
improves staff motivation
what are cons of quality assurance
more costs
slower and time consuming
employee accountable
everyone needs to see bigger picture
what is stock
stock is a term to describe everything from raw components to finished goods. it is before a sale is completed
what is stock control
process that makes sure optimum levels of stock is held so demand can be met whilst managing costs
what is buffer stock
minimum stock level that the business decide
what are cons of using stock graphs
relies on stock being used
relies on reliable info from suppliers
business dont work in a straight line
only shows one type of product being sold
what is lead time
the time it takes for stock arrive
what is pro using stock graphs
allows to calculate re order time
business decide buffer and the max stock level and help manage associated cash flow
easy to read and interpret
what is re order level
when stock is re ordered ( can be automatically)
what is a pro of having buffer stock
never run out of stock
can meet surges of demand
what is a con of having buffer stock
ties up cash which could have been used elsewhere
higher storage costs
stock can perish if its a perishable good
what does a business want from a supplier
fit for purpose products, closer location, on time, exclusive and trustworthy, consistency of stock
what are inco terms
who was responsible for what e,g when a product leaves a warehouse not responsible anymore
what does dependability mean
punctuality, reliability, durability
how can a business improve flexibility
batch production, large product portfolio, skilled workforce, communication
what is Mass customization
use of CAM to produce individually tailored output to customers on a large scale e.g macbooks and ford have a choice of customization
what are some pros of mass customization
increased operational flexibility
less waste
stimulating work environment
what are some cons of mass customization
requires CAM , IT costs, CAD costs, labour costs
what does capacity depend on
number of employees and the skillset
tech that the business have e.g machinery and its state
kind of production process
amount of investment in the business
what is under utilisation
business not getting use from machines and facilities they have paid for
why does under utilisation increase costs
this increases costs because it causes fixed costs to be spread over fewer units of output
how does a business deal with under utilisation
try to increase demand
change price or distribution
change marketing mix and promotion
sun contracting work for other firms
reduce capacity(nationalisation)
what does labour productivity measure
how much each employee produces
what are ways to increase labour productivity
improving worker motivation e.g bonuses and reward schemes
training to make workers more productive
new technology to increase speed at which they are working at
what are some advantages of capital intensive production
cheaper than manual labour
machinery is often more precise and keeps consistent quality levels
machinery can work 24/7
machinery easier to manage than people
what are some disadvantages of capital intensive production
high set up costs
machines only suited to one task which means they are inflexible
machinery can break down and can have delays
workers might fear getting displaced to motivation decreases
what are some advantages of labour intensive
people are flexible and retrained
cheaper for small scale production
low cost labour is available and cheaper
workers can solve most problems and can suggest how to improve quality
what are some disadvantages of labour intensive
harder to manage people than machines
people can be unreliable e.g they can get sick
people cant work without breaks or holidays
wage increase means labour costs increase over time
