4.4d Improving flexibility Flashcards Preview

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Flashcards in 4.4d Improving flexibility Deck (26):

Ways flexibility can be improved

1. Managing customer demand
2. Managing the business' supply


Ways to manage supply

- Produce to order
- Mass customisation
- Outsourcing


Produce to order definition

Product is only manufactured once and order has been received


Modular approach definition

Basics of the product are fixed and some elements are allowed to be customised


Advantages of produce to order

- Customers get exactly what they want
- Less costs spent on buying raw materials that are never needed
- Can add value


Disadvantages of produce to order

- No consistency of production
- Increased unit costs due to poor capacity utilisation


What does mass customisation involve?

Making bespoke individualised items for different customers but on a mass level
(See diagram)


Four approaches to customisation

1. Transparent
2. Collaborative
3. Adaptive
4. Cosmetic


How do adaptive customisers work?

They offer one standard, but customisable product that is designed so that users can alter it themselves.


How do cosmetic customisers work?

They present (package or market) a standard product differently to customers


How do transparent customisers work?

They provide individual customers with unique goods or services without letting them know explicitly that those products have been customised for them


How do collaborative customisers work?

They conduct a dialogue with individual customers to help them state their precise needs, the make customised products for them


Advantages of mass customisation

- Can better target specific market segments
- Allows a competitive advantage to be created
- Added value


Disadvantages of mass customisation

- Rejected customised products cannot be reused for another customer
- Further increased flexibility from suppliers is needed


Advantages of part-time workers

- Lower costs
- More flexible
- Can recruit wider range of skills for same total employment cost


Disadvantages of part-time workers

- Potentially higher costs on training
- Harder to communicate with employees if they spend less time in the business


Advantages of temporary workers

- Very flexible
- Ideal for specific jobs
- Chance high quality temp can be persuaded to join the business permanently


Disadvantages of temporary workers

- Higher cost per hour
- Temps are less likely to know and understand the business
- Potentially less motivated and productive


Outsourcing definition

Getting another business to provide part of the production process for you


Advantages of outsourcing

- Can react quickly to changes in demand without permanently increasing capacity
- Specialist companies can provide higher quality
- Reduced operational and recruitment costs


Disadvantages of outsourcing

- Quality can be damaged
- Price of final product will be pushed up
- Might slow down production process


Supply chain definition

System in place that facilitates the delivery of a product from a business' supplier to its customes


What was the traditional supply chain policy?

'Viking' - volume is king


Ideal supply chain features

- Wide variety of suppliers with alternatives
- Clear and effective method of distribution
- Suppliers who conform to the quality, ethical or environmental standards
- Reaches around the world


Advantages of a supply chain

- Very competitive
- Easy to source items
- Time differences allow for 24/7 business


Disadvantages of a supply chain

- Cultural and language barriers
- Cost issues for delivery of final product
- Environmental and ethical concerns

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