3.3 Business Operations Flashcards
(55 cards)
Operations management
The department responsible for the transformation of inputs into outputs.
Methods of production:
Job production
Where one off tailor-made products are made from start to finish.
E.g. a piece of artwork, bridge, wedding cake etc
Each is unique
Labour intensive
Methods of production:
Flow production
A continuous movement of items through the production process. This means that when one task is finished the next task is started immediately.
Specialisation
Where work is divided into separate tasks or jobs that allow workers to become skilled at one of them.
Division of labour
Breaking a job down into small, repetitive tasks that can be done quickly by workers or machines specialised in this one task.
Job production advantages
• Charge higher price due to time spent
• Better quality product
• Staff more likely to be more motivated and skilled
Job production disadvantages
• More difficult to make large revenues due to slower production —> lack of economies of scale
• Higher costs of production
Flow production advantages
• Can make large number of products - maximise revenue and benefit from economies of scale
• More efficient production method
• Lower costs of production
Flow production disadvantages
• Product less likely to be high quality - can’t charge premium price
• Interdependent —> delays can cause interruptions
• Staff less likely to be motivated
Lean production
An approach to production developed by the Japanese to eliminate waste. It involves the management of resources in a business to reduce waste an improve efficiency. Corrects defects when they occur.
Lean production methods
Kaizen
Just in time
Cell production
Kaizen
“Kai” means “change”
“Zen” means “good (for the better)”
Continuous improvement involving everyone
Small gradual change
1 person 2 jobs
Teamwork
Just in time
Production happens with minimum stock levels.
Completed just in time for the next task.
Cell production
Way of dividing the process into series of sperate stages.
U shaped.
Teamwork.
Self checking.
Advantages of lean production
Employees are used more efficiently.
Costs are reduced.
The number of defective products is reduced.
Disadvantages of lean production
Production is reliant on suppliers.
Expensive to set up.
Efficiency
How well a business is using their resources.
It’s influenced by:
• How well employees are managed
• How good suppliers are
• Level of investment in machinery/technology
• Production method
Procurement
The finding of, purchasing of, or acquisition of goods and services.
Stock control
The systems and policies in place to order and manage stock.
What 2 choices does a business face when managing stock?
1) Just in Time
2) Just in Case
Just in case
A method of stock control that keeps a larger amount of stock just in case it is needed.
What are buffer stocks?
Excess or spare stock.
What are advantages of just in case?
• Can respond to customers order quickly and surges in demand.
• Can achieve purchasing economies of scale.
What are disadvantages of just in case?
• Costs of storing stock.
• Stock can go out of date or obsolete.
