Making operational decisions

• Flow production


  Continuously making identical products- usually on an assembly line

  Advantages:

  > Lower unit costs

  > Mass production

  > Consistency

  Disadvantage

  > set up Is expensive

  > Customers want specific preferences
• Job production


  Individual products made at one at a time, to meet specific customer needs

  Advantages:

  > High quality

  > Unique to customers

  Disadvantages

  > Highly skilled staff

  > High costs for training
• Batch production 


  Set of quality of identical products

  Advantages:

  > produce more products than job production- large quantities produced

  > Lower unit costs

  Disadvantage:

  > Reduction in efficiency and productivity/flexibility

  > higher costs as its not fully automated
• How to improve productivity

  • investing In up to date machinery
  • Providing incentives
  • Providing training
• impact of technology on production

  need to balance

  • costs - machinery for dangerous jobs, don't pay higher wages
  • Productivity
  • Quality- consistency
  • Flexibility
• impact of unreliable supplier

  • staff unable to complete orders
  • Limited choice and variety for customers or no products at all
  • Loss of customers
• Procurements

  • getting right supplies for the right supplier
• stock

  • high storage costs
  • Increased waste- perishable goods
  • Reduced income- need to sell excess
• • Maximum stock level- largest amount of stock the business can store
  • Minimum stock level (buffer stock) - lowest amount of stock a business can store on site while still being able to operate
  • lead time- how long it takes from ordering stock for it to arrive
  • Reorder level- point where business needs to order more stock 


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• Quality control 


  > traditional method of checkin quality - checked at the end of the production process

  Advantages

  > leaving operatives free to complete other tasks

  Disadvantages:

  > High cost for inspectors

  > Workers less likely to take responsibility for errors
• quality assurance 


  > every member of staff will be responsible for contributing towards quality

  Advantages:

  > consistent quality result in competitive advantage

  Disadvantages

  > Training costs
• just in time 


  > Business holds low inventory and orders in when required

  Advantage:

  > removes buffer stock space- more space used for sales

  > no longer large amounts of capital tied up in stock

  Disadvantage:

  > Hard to react with unexpected demands

  > poor service due to misjudgement
• relationship with suppliers (factors)

  • cost of materials
  • Quality of the material
  • Level of trust
  • Availability of materials or product
• logistics

  • organisation and management within a business of a transport of raw materials and goods
• Impact of logistics

  • costs kept lower if production is quick
  • Reputation
  • Customer satisfaction
• Sales process

  1. Customer interest
  2. Speed and efficiency of service
  3. Customer engagement
  4. Post-sales service
  5. Customer loyalty
• Customer interest

  • attract potential customers
• Product knowledge

  • employees have good product knowledge
  • Hugh level product knowledge and customer service
  • product knowledge adds value
  • Undergo training and refresher courses- costly
• Sales approach 


  hard approach- actively seek customers and advise them

  Soft approach- advise customers if customer requires help, allows customers to look at their own terms
• Speed and efficiency

  • good customer service attracts customers
  • Makes customers feel valued
  • Add value
• Customer engagement

  • interactions
  • Build relationship - loyalty
• Post sales service

  • support after buying product
  • Dealing with complaints efficiently- online services
  • Help assist after purchase
  • Customer relationship
  • Feedback
• Customer loyalty

  • customer loyalty