Unit 4 Operations Flashcards
5 types of production
Job production Flow Cell Batch Lean
Lean production
Streamlined production with minimal waste, to increase efficiency and save costs
3 types of lean production
Just in time
Time based
Kaizen
Just in time
Ordering stocks only when needed.
Pros cons of JIT (3,3)
+low storage costs
+less working capital tied in stock
+no risk of stock becoming obsolete
- little room for error as minimal stock
- requires good stock control management
- no spare stock for unexpected orders
Time based management
Aims to reduce time wasted in production process, and also get product on market the fastest.
What does time based management require (3)
Flexible production facilities, can swap production from one to another.
Effective communication between managers and staff, so a culture of trust.
Multi-skillled staff-training is key
Pros of time-based management (3)
Reduced lead times-time between customer’s placing order and delivery. Therefore stock holding costs fall
Improved customer satisfaction as quicker, creating CA
Can drive innovation by decreasing R&D time
Con of time-based management
May prioritise speed over quality.
4 types of waste in lean production
Overproduction
Waiting time (idle equipment/people waiting for a process to finish/resources to arrive
Stocks-should be an acceptable buffer, not excessive
Defects
Simultaneous engineering
All parts of project planned together, considered simultaneously. Develops products more quickly
Simultaneous engineering benefits (2)
Reduced product development lead times so can charge a premium price, can be a CA for first mover advantage just like time based management
Greater sense of involvement for employees
Cell production characteristics (2)
Flow split into units, each responsible for a significant part.
Workers are multi skilled for rotation
Pros cons of cell production (4)
+enrichment, more responsibility
+improved communication within cell
+multiskilled
+quality improves
- culture has to encourage trust/participation or can feel overwhelmed, allocation of work must be optimal
- may not be as efficient as traditional flow
- needs training
6 operational objectives
Speed/flexibility Dependability Quality Added value Cost Environment
Drawbacks of 100% capacity utilisation (4)
Cannot meet unexpected orders as cant increase output anymore (eval:can outsource in short run)
No downtime-breakdowns cause delays, no time for equipment maintenance as always used
No margin of error-everything has to be correct, employees suffer, more stress and more mistakes likely
Can lead to excess supply, more working capital tied up
3 costs of capacity
Labour
Equipment/machinery
Facilities
Ways to increase capacity
Increase facility usage. E.g more days a week
Increase workforce hours (can hire peripheral workers)
Increase machinery
Subcontract work in busy periods
Reduce time spent maintaining equipment
How to fix under utilisation (3)
Increase demand, or reduce capacity
Subcontract work for other firms
If a business cant increase demand for their product to increase capacity utilisation, what must it do?
Rationalise-reduce capacity by closing part of production
Other ways of improving under-utilisation (3) in short run and long run
Short run-reduce working hours e.g through overtime/part time
Long run-making staff redundant, and selling factories/equipment
Short/Long term effects of under-utilisation
Short-flexible, can meet unexpected changes in demand
Long-high unit costs make firm uncompetitive
2 main types of technology a business uses
Robotic engineering
Computer tech
Robots pros cons (3,2)
+quicker and cheaper
+reliable/less wasteful
+handle boring repetitive tasks, less supervision
- upfront cost
- demotivate staff
CAD pros cons
More accurate designs, less waste e.g amendments made without completely redoing saves time
-initial cost
CAM pros cons
+reduced risk of human error
+reliability/consistency
+cheaper than labour, can operate 24/7
- expensive initially
- reliant on tech not breaking down
Other developments in IT (5)
3D printing EPOS Automated stock control Emails Internet
Capital intensive pros cons (3,4)
Cheaper than labour in long run
Machinery more precise
Able to work 24/7, less supervision
- high initial costs
- inflexible if only suited to in task
- risk of break down delays
- employees fear of security
When are capital intensive business’s found (2)
In large firms mostly (benefit from technical E.O.S, or where labour costs are high)
Labour intensive pros cons (3,3)
+people are flexible, can be retrained (eval:resistance)
+cheaper for small-scale production
+can suggest ways for improvement/solve problems themselves
- harder to manage
- less reliable
- need breaks/holidays
Where is labour intensive approach common
Small firms that cannot afford specialist machinery/not worth it. Exception NHS
Or where labour costs are cheap
Why is quality important (2)
Competition, a rep for quality can be a CA.
Consumers are more knowledgable, demanding and more prepared to complain
Two ways of managing quality
Quality control and assurance
Quality control and the 3 points of inspection
Process of inspecting products to ensure they meet standards.
- raw materials checked before prod
- during process
- when finished
Cons of quality control (4)
Expensive, done by quality inspectors
Often too late
Can be inconsistent
Done by inspectors rather than employees, cannot improve themselves
Quality assurance
Introducing measures into the production process, so things dont go wrong in the first place. (Preventing errors rather than eliminating faulty goods once made)
How quality assurance works and whys it good
Self checking, makes everyone’s responsibility to produce good work.
Empowers employees to self check quality of own work can be motivating.
What’s needed for quality assurance (2)
Training, and workers committed to quality
Issue of quality assurance
Can result in products only being acceptable , not a high standard
Evaluating quality improvement (4)
Culture may need change (for assurance)
Cost of training
Does quality matter? E.g monopoly
Competitors quality
Total quality management
Whole workforce is committed to quality improvements. Every department focuses on quality, to satisfy co workers and customers for work you are passing on to them
TQM Pros Cons (3,4)
+teamwork as all involved with improving quality
+brand rep for quality
+less faults, less waste
- takes long
- can demotivate if quality is in all parts of business
- expensive-training
- may need culture change
Quality circles
Meet at regular intervals to discuss quality issues, and take corrective action
Pros cons of quality circles (1,1)
Get staff involved with identifying where quality problems arise, motivation
Suggestions can be unrealistic or may not listened too
Mass customisation
A production process involving mass production techniques, where output is tailored to the requirements of the customer
Mass customisation pros cons (6,3)
Low unit costs (E.O.S) with personalised product=high added value
Premium price (product differentiation)
Builds brand strength/loyalty
Reduce intermediary as clear coommunications with customer wants
Reduced stock holding of finished goods as produced to order
More stimulating work
Difficult to remain efficient and profitable, customised products can be expensive (cost of CAM and training)
Take long to produce-only acceptable for luxury products
More waste if poor Q.A or Q.C if not to customer needs
Producing to order pros cons (2,2)
Low stock holding-finished goods sent out-less risk of obsolescence
Customer satisfaction-they get what they want
Capacity to produce to order may be limited
Difficult to handle changes in demand
CPU normally higher-labour intensive+training costs
Outsourcing pros cons (2,2)
Get work done-meet demand
No need to hire permanent staff, only for occasions
No control on production
Profit margin charged on top
Technology to improve efficiency pros cons (2,2)
Increase productivity and quality
Reduced waste
Initial cost+maintenence and updating can be expensive+training staff/redundancies
Resist-lower job security or not want to change
Issues of holding stock (3)
Storage costs
Risk of obsolete
Working capital tied up with an opportunity cost
Types of stock
Raw materials
Work in progress
Finished goods
Flow production stock control-wise
They need large stock of raw materials
Batch production stock control-wise
Creates a lot of work-in progress
Job production stock control-wise
No finished goods as soley produced to order
Cell production stock control-wise
Usually use just in time
Factors when considering suppliers (6)
Price Payment terms (credit) Quality Capacity Reliability/dependability Flexibility
Why do suppliers need to be dependable?
If not on shelves when they need to be, or quality is poor, it reflects badly on brand
Why do suppliers need to be flexible?
Meet unexpected orders e.g outsource or temporary workers
What is a strategic working relationship?
Seeking long term benefits from working together
4 ways to build strategic working relationships
Linked networks
JIT
Shared costs
Innovation
Linked networks
Sharing system e.g stock control, allows both companies to view stock level, improve efficiency and cut costs
Shared costs
Business and supplier can share costs on specialist equipment/systems and store in same place
Innovation
Working closely with suppliers can share new ideas or money through innovation
Strategic supplier vs Non-strategic supplier
Strategic-provides goods essential to business
Non-strategic-sells low value supplies e.g office stationary
More time spent choosing strategic
How many suppliers should a business pick, and evaluate
More cost effective for less suppliers.
However, only 1 supplier can cause problems if they fail, so always worth having an alternative available
How to increase efficiency?
Lean production
Labour productivity
Output/workers
Ways to increase labour productivity (3)
Improve motivation
Training
New technology to increase speed
Batch method, and what does it achieve and eval
Work split into batches, for specialisation
Poorly managed work flow e.g not optimal size, or one is less productive, can result in lots of works in progress, or completed batches waiting to be used
Flow method, and what does it require
Similar to batch but work is passed on without waiting for remaining batch, to keep a constant flow.
Task must be equal length for a smooth flow.
Demand must be constant-otherwise excess supply, storage difficulties
Materials delivered on time to be continuous flow
Quality standards=no time for reworked, stops flow
What does mass customisation require? (2)
Flexible production-be able to customise
High level of automation (CAM)
Re-order level
Lead time (days) x daily usage +buffer stock level
What does buffer stock level depend on (3)
Perishability
Usage rate
Lead time (longer=need more buffer)
2 ways to match supply to demand
Peripheral workers
Outsourcing
4 Reasons for peripheral workers
Cheaper-hourly rate not full salary
Flexible-only when needed-no waste-improved labour productivity
Increased pool of applicants as now part time
New workers are productive>ready to work
4 Reasons against peripheral
Part time>less loyal>less committed>productivity down
Training costs
More subordinates>wider span of control-more work-worse communication>labour productivity falls.
Long term not so good
