Unit 4

• Operational objectives

  Quality

  Dependability

  Environmental

  Adding Value
• labour productivity output / employees
• unit cost total cost/ units
• capacity utilisation output/capacity *100
• Cons of 100% capacity utilisation cannot respond to fluxuations in D at short notice
• Outsourcing

  companies use external providers to carry out business processes
• Productivity units produced by an employee in a certain period of time
• Efficiency ability of employees to increase output from fixed number of inputs
• Lean production minimises waste and increases efficiency
• Just in time production

  lean production

  ordering of supplies when needed

  reduces waste and storage costs
• cons of JIT production

  no spare stock to meet unexpected demand

  reliance on supplier
• Pro capital intensive production

  cheaper in long run

  helps support labour increases efficiency
• Con of capital intensive production

  high start-up costs

  conflicts with shareholder objectives
• pro of labour intensive production

  operational flexibility

  skilled labour reduces defects- motivated- productivity
• con of labour intensive production

  Cost of training
• CAD

  Enables firm to design and test products on screen without building a physical prototype
• CAM

  The use of computer software to control machines and produce goods by lifting, cutting and moving materials

  CAD + CAM = prototypes
• how is quality measured? surveys customer feedback
• Pros of good customer feedback good reputation advantage over competitors
• How is quality identified?

  checking during production process

  customer service and complaints
• Pro of customer service corrects unidentified issue
• consequences of bad quality

  returns

  recalls

  lost customers

  low customer expectations
• total quality management set of management principles that place quality at the heart of everything a business does
• features of TQM

  expensive- training employees to embrace the quality culture

  rely on customer feedback for kaizen
• pros of maintaining high quality

  good image/reputation

  charge higher prices

  avoid product recalls
• costs of maintaining high quality

  inspection costs

  staff training

  provision of extra services
• Just in case production purchasing stock with buffer stock
• pros of JIC production

  economies of scale

  flexibility

  positive customer service due to lead time
• cons of JIC production

  storage costs


  decreased cash flow

  waste of resources
• Lead time time it takes to create a product and deliver it to consumers
• Methods to improve supply chain flexibility

  mass customisation

  speed

  dependability

  Globalisation
• pros of CAD

  increases efficiency

  relatively cheap

  increases speed of design process
• Cons of CAD

  Skill to use CAD

  Expensive
• Pros of CAM

  Faster manufacturing process than humans

  increase precision and consistency

  minimises waste
• Cons of CAM

  high setup

  cost Wages for skilled CAD users
• Cell production Teams of workers completeting whole tasks in close proximity
• Quality assurance when systems are used to prevent defects from occurring
• Quality control Final good and service meets certain level of quality
• Pros of QA

  reduces defects

  improves rep over time
• Cons of QA

  High costs

  Slow production

  Demotivating