unit 4- operations Flashcards
what is operations concerned with
providing customers with a product that they want in a timely, effective, efficient and profitable way
what is operations about
the actual production of the good or service by a business
what 7 positive things does effectively managing operations allow businesses to do
- control costs of production
- add value to its products
- guarantee the right level of service
- guarantee the right level of quantity
- adapt to the needs of customers
- provide itself with ‘green’ credentials
- meet the demand for its products and services
what are 5 operational objectives
- costs
- quality
- speed of response and flexibility
- dependability
- environmental objectives
how is a cost an operational objective
the operations department must be able to control the costs of production in order to maximise profit margins
how is a quality an operational objective
the operations departments is responsible for setting quality standards and ensuring these specifications are met, ensuring the product or service is fit for purpose
how is a speed and response and flexibility an operational objective
opportunities and sales can be lost if a business can’t meet order volumes in a specific time frame. operations is also responsible for ensuring the product is suitably flexible to meet the needs of different customers
how is a dependability an operational objective
businesses can’t afford to let their customers down. those that do tend to lose loyalty and repeat purchases. dependability can be the key factor by which a customer chooses its supplier, especially in industrial markets
how is a environmental objectives an operational objective
the production process can cause many negative externalises, such as pollution. businesses will set targets on a number of environmental factors such as waste disposal
what are the 4 V’s in operations
- volume
- variety
- variability
- visibility
what are 6 examples of internal and external influences on operations objectives
- legal/ political (health and safety legislation)
- economic (adapting to levels of demand in market)
- employee skills (these can determine objectives)
- nature of product (minimising costs for certain products)
- social (consumer may expect more personalisation of the products they buy)
- technological (tech helps product development and processes of manufacture and distribution)
what is labour productivity
this measures the output per employee and is a measure of how productive the workforce is.
what is productivity a measure of
output in relation to the input
what is the equation for labour productivity
output per time period divided by number of employees
what is unit costs (average costs)
it takes into account the total costs of a business and divides this by the level of output
what is the equation for unit costs
total costs of production divided by number of units of output produced
what is capacity utilisation
the maximum amount a business can produce over a period of time given the resources it has available
what does capacity utilisation measure
existing output as a percentage of the maximum possible output
what is the equation for capacity utilisation
actual output in a given time period divided by maximum possible output in a given time period times by 100
what are the 6 ways to increase efficiency and labour productivity
- use data to set targets and motivate the workforce
- use to identify training needs of the workforce
- use to test different production techniques, such as teamwork or cell production
- use to measure the efficiency of the workforce
- use as a tool to identify employees for praise and reward
- use as a tool for performance related pay
what are the 5 use unit cost data
- use to set prices based on profit margin target
- use to make decisions about which products to produce
- use to make decisions about scale of production- what level of output will achieve sufficiently low costs
- use alongside variable costs to analyse distribution of overheads
- use as a target to drive operational decisions such as how, where and what to produce
what are the 4 positives capacity utilisation can be used for
- setting targets for outputs
- identifying when a business should increase capacity
- identifying when a business should decrease capacity
- identifying the maximum level of output before production becomes ineffective
when is capacity utilisation data most effective
used alongside the other measures of performance
what are the 7 benefits of improved efficiency
- labour productivity increased
- unit costs fall
- resources can be reallocated
- profit margins increase
- improved flexibility across the business
- opportunity to explore new ventures
- ability to charge lower prices and therefore improved competitiveness
what are the 4 ways to increase efficiency and labour productivity
- new ways of working
- training
- better management
- introduce new reward systems
how are new ways of working increasing efficiency and labour productivity
design the job of the workforce to be more effective
how is training increasing efficiency and labour productivity
invest in training to improve workers’ skills and motivation
how is better management increasing efficiency and labour productivity
improve supervision, direction and leadership of the workforce
how is introducing new reward systems increasing efficiency and labour productivity
in order to create an incentive to work harder
what is lean production involve
practises that reduce waste in the operational process
what are the main forms of lean production focused on
reducing defects, time wasted and inventory levels
what are the 7 types of waste business can reduce
- motion
- transport
- inventory
- defects
- waiting
- extra processing
- over production
what are 6 ways of reducing waste
- designing the work areas within a business so that employees are close together and in close proximity to the resources they require
- designing production facilities to minimise movement
- using effective stock control systems
- adopting quality assurance techniques to minimise defaults
- designing products and services to meet the exact needs of customers
- using a range of forecasting techniques to predict demand and match production accordingly
what are the 5 difficulties of adopting the lean production
- if there are disruptions in production, business may be vulnerable if there is no inventory
- it creates over reliance on suppliers to deliver on time
- there is the danger of stripping away processes and features that employees and customers value
- it puts pressure on workforce to self check and monitor their own work
- kaizen can bring about change that may be resisted by the workforce
