Section 4

Question 1

Enterprise resource planning - ERP

Answer 1

Use of a single computer app to plan the purchase and use of resources in an organisation to improve efficiency of operations

~> allows for the coordination and linking of all systems

Question 2

Supply chain

Answer 2

All of the stages in the production process from obtaining new material to selling the product to customer

~> Supply chain management
Significant application for ERP

Stages of SCM :
• plan - decide on resources needed
• suppliers - choose most effective suppliers and ordered JIT
• cost - record costs and calculate price
• manufacture - check quality and monitor progress
• deliver - choose transport system and deliver most effectively

Question 3

Capacity utilisation

Answer 3

The proportion of maximum output capacity currently being achieved

Current output level x100
Maximum output level

~> Used to determine operational efficiency

Question 4

Excess capacity

Answer 4

Exists when the current levels of demand are less than the full capacity output of a business - AKA spare capacity

Question 5

Rationalisation

Answer 5

Reducing capacity by cutting overheads to increase efficiency of operations

Question 6

Full capacity

Answer 6

When a business produces at maximum output

Question 7

Capacity shortage

Answer 7

When the demand for a business’s products exceeds production capacity

Question 8

Outsourcing

Answer 8

Using another business to undertake a part of the production process rather than doing it within the business using the firms own employees

Question 9

Business- process outsourcing - BPO

Answer 9

A form of outsourcing that uses a third-party to take responsibility for certain business functions, eg. finance

Question 10

Lean production

Answer 10

Producing goods and services with the minimum amount of waisted resources while maintaining high quality

Wastes of time:
• Excessive transport
• High worker movement
• High inventory holding
• Waiting time
• Over production
• Over processing
• Defects

Consists out of:
• JIT
• Kaizen
• Flexible specialism

Question 11

Simultaneous engineering

Answer 11

Product development is organised so that different stages are done at the same time instead of in sequence

Question 12

Cell production

Answer 12

Splitting flow production into self-contained groups that are responsible for whole work units

Question 13

Kaizen

Answer 13

Works on the process that workers have greater insight into productivity + requires constant small improvements not a once off massive improvement

Question 14

Quality

Answer 14

Meets customer expectations and fits the purpose

Question 15

Quality standards

Answer 15

Expectations of customers expressed in minimum acceptable production standards

Question 16

Quality control

Answer 16

Based on inspection/sample of products

Question 17

Quality assurance

Answer 17

A system of agreeing and meeting quality standards at each stage of production to ensure customer satisfaction

Stages:
→ product design
→ quality inputs
→ quality
→ delivery system
→ customer service/after sales

Question 18

Quality control techniques

Answer 18

→ prevention
→ inspection
→ correction and improvement

Question 19

ISO 9000

Answer 19

Internationally recognised certificate that acknowledges existence of a quality procedure that meets certain conditions

Question 20

Total quality management - TQM

Answer 20

An approach to quality that aims to involve all employees in quality improvement

Question 21

Benchmarking

Answer 21

Identifying best firm in the industry and comparing performance standards

Stages:

1. identify aspects to be benchmarked
2. measure the areas performance
3. Identify best firm in industry
4. compare data to establish weakness
5. Set standards for improvements
6. change process to achieve standards
7. Re-measure

Question 22

Project

Answer 22

Specific/temporary activity with a start, end date, clear goals, responsibilities and budget

Question 23

Project management

Answer 23

Using modern management techniques to complete a project from start to finish to achieve objectives in time and cost

Elements:
→ resources : people/material
→ time
→ money
→ scope: size/scale of project

Management elements:

1. Define project with objectives
2. Divide into tasks/activities
3. Control/check time limits
4. Give clear roles
5. Provide control of quality, issues and risks

Question 24

Critical plan analysis/network analysis

Answer 24

Planning technique that identifies all tasks in a project, puts into correct sequence then allows for identification of critical path

Question 25

Critical path

Answer 25

Shortest possible time in which projects can be completed

Question 26

Network diagram

Answer 26

Diagram used in critical path analysis that shows logical dependancies between the activities

Question 27

Total float

Answer 27

Total amount of time an activity can be delayed without delaying the whole project duration

Total float = LFT - duration - EST

Question 28

Free float

Answer 28

Length of time activity can be delayed without delaying the start of the next activity

Free float = EST of next activity - duration - EST of this activity