operations (BS N5)

• Factors to consider when choosing a supplier

  • Price
  • Location and transport costs
  • Lead time
  • Product quality
  • Discounts and trade credit offered
  • Ability to supply on time
• Price

  The price offered by the supplier directly affects the production costs for a company
• Location and transport costs

  Proximity to the supplier can impact transportation and delivery costs
• Lead time

  The time taken between placing an order and receiving it
• Product quality

  The quality of raw materials directly influences the quality of the finished product
• Discounts and trade credit

  Trade discounts for regular orders make the cost of raw materials cheaper, trade credit allows the business a period of time without having to pay for purchases
• Ability to supply on time

  Timely delivery is crucial to ensure uninterrupted production and meet customer demands
• Types of inventory

  • Raw materials
  • Work-in-progress
  • Finished goods
• Inventory control

  Keeping track of the materials, products, and supplies that a business needs to make its products
• Reasons for inventory control

  • Meeting customer demand
  • Minimising costs
  • Avoiding under and overstocking
• Overstocking

  Allows a business to meet any unexpected orders, provides a buffer to prevent production disruptions, but ties up capital, increases storage costs, and risks inventory becoming outdated or obsolete
• Understocking

  Reduces costs associated with storage, maintenance and security of inventory, but can lead to production stoppages, sales declines, and customer dissatisfaction
• Inventory management techniques

  • Maximum inventory level
  • Minimum inventory level
  • Lead time
  • Reorder quantity
  • Buffer inventory
• Inventory control graphs provide a visual representation of inventory levels over time
• Components of an inventory control graph

  • Maximum inventory level
  • Minimum inventory level
  • Reorder quantity
  • Lead time
  • Reorder level
  • Buffer inventory
• Computerised inventory control systems

  • Barcode scanners
  • RFID technology
  • GPS
  • Inventory management software
  • EPOS systems
• Advantages of computerised inventory control

  • Eliminate manual errors
  • Determine up-to-date inventory levels instantly
  • Avoid over-stocking and under-stocking
  • Reduce need for inventory-taking
  • Automatically reorder when needed
  • Identify best sellers/non-movers
• Job production

  Manufacturing approach where products are customised or made to order according to specific customer requirements
• Job production

  • Allows customisation, results in high-quality output, enables personalised service
• Disadvantages of job production

  • Higher costs, longer lead times, limited economies of scale
• Batch production

  Items are created stage by stage in bulk to meet a specific demand, production is stopped on completion of each batch
• Advantages of batch production

  • Cost-efficiency, flexibility, streamlined production, quality control
• Disadvantages of batch production

  • Higher setup costs, longer lead times, less customisation
• Flow production

  Also known as continuous production, enables a product to be created in a series of stages on an assembly line with large numbers of the same goods produced continuously
• Advantages of flow production

  • High efficiency and productivity, lower unit costs, consistent product quality, quick production turnaround
• Disadvantages of flow production

  • Lack of customisation, higher initial setup costs, limited flexibility, dependency on equipment reliability
• Product quality

  The overall characteristics and features of a product that make it reliable, effective, and satisfying for the customer
• Importance of product quality

  • Customer satisfaction, brand reputation, competitive advantage, cost savings
• Quality management systems

  • Quality raw materials
  • Quality labour
• Quality management is about making sure that everything a company does meets a high standard of quality
• Quality assurance

  Making sure products meet standards from start to finish in manufacturing. It involves checking materials, parts, and final products at different stages throughout the production process to avoid defects and make sure finished goods meet the expectations of customers.
• Environmental factors

  Businesses today have a responsibility to minimise their environmental footprint to ensure they operate in a responsible and sustainable way
• Environmental considerations

  • Climate change
  • Waste management
  • Resource conservation
  • Environmental regulations
  • Sustainable supply chains
  • Reputation
  • Stakeholder expectations
• Manufacturers failing to act environmentally responsible

  • Manufacturer A emits high levels of pollutants into a nearby river
  • Manufacturer B uses excessive amounts of packaging materials for its products, resulting in excessive waste
  • Manufacturer C engages in deforestation practices to source raw materials for its products, contributing to habitat destruction and loss of biodiversity
• Ethical factors

  Businesses are also required to act ethically and think about what is right and wrong in terms of how its operations are conducted
• Manufacturers failing to act ethically

  • Manufacturer A exploits workers by providing poor working conditions, paying unfair wages, and disregarding health and safety regulations
  • Manufacturer B illegally dumps toxic waste into nearby rivers, causing harm to ecosystems and communities
  • Manufacturer C sources ingredients from suppliers known to employ child labourers in hazardous conditions
  • Manufacturer D knowingly sells defective or unsafe products without proper warning or recall procedures
• Examples of eco-friendly operations

  • Implementing energy-efficient practices
  • Reducing greenhouse gas emissions
  • Minimising waste
  • Using sustainable materials in production processes
  • Conserving water
  • Minimising transportation of goods
• Recycling

  The process of converting waste materials into reusable materials to create new products
• Recycling in manufacture

  • Manufacturing processes often generate scrap materials that can be recycled
  • Packaging materials can be recycled
  • Defective or obsolete components can be recycled
  • Water can be recycled through wastewater treatment and filtration
• Minimising packaging

  The intentional reduction of packaging materials used in the manufacturing process to reduce waste, conserve resources, and promote environmental sustainability