UNIT 4 OPERATIONS - INCREASING EFFICIENCY AND PRODUCTIVITY 2 Flashcards
Lean prodcution is all about
geting more from less
reducing waste in terms of tiem , space and resources
what are teh types of waste
too much stock held
high defects
too large factory/outlet
explain how too much stock held is a type of waste
we get wast in terms of extra costs
as storage costs of storig too much stock we dont need
may go out of date e.g become obsolete and therfore persish this is cost as stock has been wasted
bad for enviro - conflict with enviro target of op obj
wxplain how high defects is a waste
wasted raw materials
as some components cant be used again this is wasteful for the environment and icnreased cost to business
explain how too large factory/outlet is a waste
waste in terms of rental costs and space
adds to UC as paying fixed costs only to utilise a low space
what is JIT
Inventory strategy a bs employs to increase efficicney and reduce waste by recieving goods only as theyre needed for production
Jit requires a lot of organisaiton why
bs must inform suppliers when consumer demand rises - less of a consideration as tech is a thing
+ve of JIT
reduced waste
greater productiivyt
reduced space and staff due to less warehousing
greater flexibility in terms of repsonsiveness to changes in taste/fashion
lower costs as a cinsequence of above
explain how JIT reduecs waste
lower inventory
so lowe storage csots and less staff needed to maintain these overheads so less costs in terms of employees
loewr inventory so less risk og stock not being sold, obsolete, damaged - less momey wrrapped up in stock
this increases cashflow and gives ability to be flexibile financially to other opportunities
esplain how JIT creates greater productivity
it is a pull method of prodcution
they make the order
this put times pressure on bs to fulfill order
increased responsibility isplaced on employees and they may have to QC stick this could leaed to added repsosbilibilry
increasing motivation
and productivity
limitations of JIT
running out of stock
misse oportunities for bulk purchase
reliant on supplier/trust
epxlian JIT running out of stock
relies on suppleir delivering on time
transportation problmes due to weather or industrial aciton could alt production
furthermore if firms struck by disaster such as japan with earthwuake and tsunami in 201
production may be halted for months this is singifiant as can lead to loss of sales and reputation issues - customers may think no longer can rely on you , youre not dependabl e
explai JIT limitaiton in terms of missed op of bulk purchasing forsuppliers
supplys purchased in samller q and only when needed therfore limit opportunity to get pruchasing EOS
so have higher average unit costs
which measn you may loos out on firthe rprice comp beenfits
explain trust issues and relying on supplier for JIT limitaiton
reliant on relationship between company and its supplier
if they fail to deliver on time or their are quality issues no sale or production
no rev to pay costs
although its possible we miss out on purchasing EOS when using JIT why might abusiness be able to negotiate a special selling price
if buy ongoing supllies over a period of time
supplier will also save costs due to reduced requirement for storage and themselves undertaking JIT production
