Unit 4

Cards (43)

  • Operations: The actual production of the good or service
  • Added value  = selling price – costs of input
  • Capital intensive is where production or operations depends on investment in and use of capital
  • Labour intensive is where production or operations depends on investment in and use of labour
  • The 4V's: Volume, Variety, Visibility, Variability
  • Types of operational objectives: Cost, Quality, Dependability, Innovation, Speed
  • Labour Productivity = Total output/Number of employees
  • Unit costs = Total costs / Total output
  • Efficiency is using its inputs more effectively
  • When efficiency increases, unit costs fall
  • How to improve efficiency: Improve labour productivity, Introduce lean production, Technology
  • Capacity utilisation = (Actual output / Maximum output) x 100
  • Firms operate at less than 100% capacity because of seasonal variation in demand or a decrease in demand
  • Potential benefits of spare capacity are planning for maintenance time, buffer benefit
  • If production is rushed, quality may fall
  • Lean production is the process of reducing waste and making operations more efficient
  • Cell production is organising production around teams instead of a production line
  • Kaizen is making small changes about the way things are done which, over time, lead to major improvements
  • Benefits of JIT
    Less costs in holding stock, Less working capital required, Less obsolete / ruined stock
  • Disadvantages of JIT
    Little room for error, Very reliant on suppliers, Unexpected orders harder to meet
  • Andon is if there is a problem the cord is pulled and production stops
  • The resource mix is the combination of capital and human resources
  • Quality is difficult to define and can vary according to the situation
  • Quality can be measure by failure or reject rates, level of product returns, customer complaints, customer satisfaction
  • To improve quality, careful selection of supplier partnership, employee training, investing in new technologies
  • Quality control is a system of testing or inspecting the output against standards
  • Quality assurance is the maintenance of quality by attention to detail at every stage of the process, including suppliers
  • Total quality management aims for continual improvement throughout every functional area
  • Quality standards are sets of criteria used to establish quality systems
  • Dependability is a process starting and finishing at a stated time
  • Mass customisation is the personalisation or custom-tailoring of goods or services to meet customer needs
  • Mass customisation allows flexibility, maintains cost savings through producing large quantities, enables customers to decide on their own features
  • Mass customisation is made possible through technologies, e-commerce and internet marketing, Lean production
  • Inventory management is how a company controls its inventory as it is bought
  • Just-in-time (JIT) is an approach whereby materials arrive just when they're needed by the manufacturer
  • Lead times is the time it takes between the order being placed with the supplier and the stock arriving at the factory
  • Buffer level of inventory is the amount of stock held
  • Re-order levels are when stock falls to this point then it is re-ordered
  • Vertical integration is acquiring companies up or down the supply chain
  • Supply Chain: Suppliers, Manufacturing, Distributers, Retailer, Customer