3.4

• lean production

  minimum waste

  maximum quality

  time consuming

  may not be possible
• JIT is ordering stock in small, frequent batches to arrive exactly when you need it
• JIC is ordering buffer stock in large, infrequent deliveries to store overtime
• benefits and drawbacks of JIT

  minimal waste

  less warehouse space needed so cheaper rent

  no extra stock to recover damages or mistakes in production

  production line stops if deliveries are late
• benefits and drawbacks of JIC

  benefit from spikes in demand

  benefit from purchasing economies or scale

  expensive rent as more warehouse space needed
• quality control - checking products for quality at then end of the production line only
• quality assurance is checking quality at stages along the production line
• outsourcing is having other businesses make your product on your behalf
• lead time is the time taken from when the order is placed and when the product is arrived at the customer
• Types of flexibility

  Product

  Process

  Labour

  Capacity

  Financial

  Location
• Total quality management is checking products at every stage of production and delivery
• Positives of providing customisation

  Allows customers options

  Customers feel they have more control

  Increases customer satisfaction

  Increase in footfall

  Perceive product of better quality
• Negatives of providing customisation

  Reputation at risk as business image is attached to any customisation made

  Makes operations more complex and expensive

  Mistakes made can affect reputation
• Types of customisation

  Collaborative - any aspect of product can be changed

  Adaptive - a base product is adapted

  Transparent - personalised service like make ur own sandwich

  Cosmetic - different packaging, same product
• Types of flexibility

  Volume

  Delivery

  Product
• How to operate overcapacity

  Overtime

  Extending hours

  Outsourcing

  Running machinery at a higher production rate
• Labour productivity

  Technology

  Efficiency of systems of production

  More qualified workers

  New approaches to motivation

  Improved training

  Improved flexibility of production
• Lean production methods

  JIT

  Quality circles

  TQM

  kaizen
• Operational objectives

  Costs

  Quality

  Speed of response

  Flexibility

  Dependability

  Added value

  Environmental objectives
• Ideal capacity depends on

  Level of demand for product

  Flexibility of production lines

  Seasonality of output and demand

  Implications of failure to meet demand

  Opportunities for outsourced production
• Types of economies of scale

  Technical

  Specialisation

  Purchasing

  Marketing

  Financial

  Research and development

  Social

  Managerial and administrative
• How to use technology to improve operational efficiency

  Robotics

  Automation

  Planning

  Controlling

  Stock control

  Communications

  Design

  Employment
• Importance of quality

  Appearance

  Reliability

  Durability

  Functions

  After sales service

  Repair and maintenance
• Kaizen is a policy of implementing small incremental changes in order to achieve better quality and efficiency
• mass production has high stock levels, no close scrutiny of process methods, has infrequent large deliveries, one way communication, lower level of worker responsibility, quality inspection when product is finished
• lean production has two way communication with workers, eliminates unnecesary processes, frequent small deliveries, higher levels of worker responsibility and minimal stock levels
• Labour productivity is the metric used by businesses to assess the performance of their operations staff.it is the measure of output in an given time. it can be improved with technology, new workers, improved flexibility and training.
• product flexibility looks at making adaptations, having variety and customisations
• Labour productivity looks at training, having multiskilled workers and having temporary or part time workers
• capacity flexibility is how a business reacts to and meets demand, deals with excess stock and investment opportunities
• location flexibility looks at adjusting distribution efficiently and making expansions
• financial flexibility is having cash reserves and external sources of finance
• process flexibility is the ability to adjust product lines in response to demand, having new technology and using outsourcing
• Capital and labour intensive

  Labour intensive is when products are mainly produced by humans.

  Capital intensive is when products are mainly produced by machines and robots.
• Advantages and disadvantages of labour intensive

  + customised products are easier to make

  -quality of products can vary due to skill of worker + cheaper machinery costs S

  -skilled workers take time to train so higher training costs +humans can use their own initiative and problem solving skills

  -skilled workers will be paid more than unskilled workers
• Advantages and disadvantages of capital intensive 


  -less employee wages and costs

  +more difficult to customise orders as machinery will need adapting -quality can be standardised/ the same each time

  -stoppages in production can be costly +machines can work continuously/ 24/7

  -initial set up costs of machinery are high
• positives of outsourcing 


  we can react to changes in demand quickly

  the outsourcer could be more specialised that us

  it let's us focus on our core business needs