Unit 4- Improve Operational Performance Flashcards
What are the 6 operational objectives?
•Costs
•Quality
•speed of response and flexibility
•dependability
•environmental objectives
•added value
What are some ways of measuring efficiency?
•labour productivity
•unit costs
•capacity
•capacity utilisation
Calculation for labour productivity
Output per period/ no.employees working in that period
Capacity
The maximum total level of output or production that a business can produce in a given time period
Calculation for capacity utilisation
Capacity used per annum (or month)
/
Maximum possible output per annum (or month)
Unit cost
The cost of producing one unit of output
Benefits of spare capacity
•Allows a business to plan maintenance time
•less pressure on employees
•can cope with sudden increase in demand
•improvements can be planned
Disadvantages of spare capacity
•higher unit costs
•employees may get bored or demoralised
What is the ideal percentage for capacity utilisation?
93%
Lean production
An approach to production that aims to minimise waste,
Which can reduce costs
Just in time production
Aims to hold as little stock as possible, items are ordered just in time to be used
Pros and cons of Just in time production
+don’t have to rent a large warehouse
+if items are perishable there is less waste
+all items made are sold
+room for personalisation
+can charge a higher price
+improved relationship with supplier
-may be more expensive
-may take longer to get to customer
-risky if suppliers aren’t reliable
-sudden increase in demand may not be able to be fulfilled
Just in case production
A method of operating production with buffer stock just in case a supply shortage or demand increases
Kaizen
Kaizen means continuous improvement. It is an approach to production that aims to achieve change from a series of small steps.
Lean production methods
•just in time
•kaizen
•Total quality management
•cell production
•waste minimisation
Cell production
Organising production around teams instead of a production line. The production is divided into a series of different stages which are undertaken by teams or cells
Pros and cons of cell production
+can divide work up
+each cell is responsible for their own work
(improved quality)
+they have control over their own work
-outflow may be less than “flow” production
-may be expensive to invest in equipment for each cell
-cells may work at different speeds (causing tension and conflict)
Quality control
A system that uses inspections to check the quality of work at stages of the manufacturing process
Pros and cons of quality control
+stops faulty products going to customers
+problems can be fixed
-expensive to operate
-doesn’t encourage team responsibility
-may reduce motivation
Quality assurance
A system that improves quality by arranging every process to get products right first time
Pros and cons of quality assurance
+reduced costs
+greater consistency
+motivated workforce
+workers take responsibility
-may need a change in company culture
-could increase short term costs
-can take time to get used to
Total quality management
An approach to quality in which everyone is focused on preventing errors occurring and ensuring quality at each stage of the production process
Supply chain
All the businesses, people and activities that take place in the production process from the start u til it gets the customer
On a bar stock graph what is the reorder level?
When reaching it, it acts ad a trigger point so that when stock falls to this level, the next supply order should be placed
On a bar stock graph what is the lead time?
Amount of time between placing the order and receiving stock
On a bar stock graph what is the minimum stock level ?
Minimum amount of the product the business would want to hold in stock
On a bar stock graph what is a buffer stock?
An amount of stock held as a contingency in case of unexpected orders so that such orders can be met and in case of any delays from suppliers
