Ch 3 Flashcards

Question

How can organisations 'compete on cost'

Answer 1

Economies of scale – bulk buying or decreasing cost per unit Outsourcing and downsizing Updating and introducing new technology - reducing labour costs per unit Streamline production processes Standardizing products aimed at larger markets (minimal variety) Lean manufacturing – eliminating waste Training and development – improve skills and capabilities of employees (become more efficient and productive

Answer 2

Competing on quality refers to offering the best product available in the market. Organisations can employ quality management strategies such as Quality Control (QC) Quality Assurance (QA) and Total Quality Management (TQM)

Answer 3

Continuous evaluation of processes and reduction of human variables. Building stronger customer relationships with tailored products to Customers (specialized/different varieties) and immediate response to Customer needs. Integrating technology where possible to reduce defects in production Process. Public communication of organisation wide commitment to quality.

Answer 4

Insuring a faster transformation process (than competition)

Answer 5

Improve technology - increase speed of production Improve supply chains and create independent work teams Develop faster feedback mechanisms Adapting process to improve responsiveness to changes

Answer 6

Involves planning the layout of workspace to streamline the production process The layout of a production plant affects the flow of inputs and the effectiveness of this flow will impact on efficiency of the production process

Answer 7

ptimize operations – it will result in improved efficiency in productivity, satisfied customers and deadlines met

Answer 8

Physical space – for anticipated volume of production Equipment and technology required to use Location of stock and warehousing Efficient flow of goods and services through the system – links between stages of production Conforms to legal regulations Work environment

Answer 9

The layout of a production plant affects the flow of inputs and the effectiveness of this flow will impact on efficiency of the production process

Answer 10

Deals with large-scale processes, such as the construction of bridges, ships, aircraft or buildings

Answer 11

Used for big project production – deals with large scale bulk activities such as contraction of bridges, ships, aircrafts or buildings Product cannot be moved due to weight or size so - it is more efficient to bring materials to one site; workers and equipment come to one working area Fixed production layout is best suited to an organisation that have no viable alternative facilities layout due to the difficulty in moving the product due to it’s size

Answer 12

Advantages Allows for bulky products to be assembled as efficiently as possible "Storage of materials; need constant change and it’s difficult to find secure storage Disadvantages Expensive; high costs of storing and transporting resources to the site"

Answer 13

deals with the manufacturing of goods in mass volume using an assembly line

Answer 14

Machinery and equipment are arranged in a line and components are added to the product in a sequence of steps (usally along a conveyor-belt) A product layout is best suited to the manufacture of high volume standardized goods

Answer 15

Advantages "Reduced need for staff – use of technology result in staff only being required for highly specialized tasks Allows for economies of scale – reduced cost per unit Operate 24x7 Produce high quality and consistent goods with few defects Disadvantages: Unsatisfied staff become board with low skilled repetitive tasks – job satisfaction lowers A problem on the production line could result in the whole factory needing to be shut down – stopping all operations Capital intensive – extremely expensive to setup, as it requires significant machinery and technology "

Answer 16

Deals with high varieties of products by grouping activities, equipment and machinery of similar functions together Often

Answer 17

Often referred to as functional layout as equipment and machinery that perform similar function are arranged together A process layout best suits an organisation that deals with a variety of products Batch production – similar item are produced simultaneously and move through stages of production Used to deal with different needs of customers Process layour often uses cells rather than having a straight production line (arranged such as a ‘U’ shaped figure The teams working on a product or components in this cell would be able to solve problems together as communications is improved If other cells fail other teams can continue to work on their product Products which a cell is responsible for can be easily changed and altered

Answer 18

Advantages Flexible – can quickly change to meet customer needs Improved communication and cooperation between cells Will not stop entire operations is one cell, this will not affect operations Allows for use of technology Disadvantages Unsatisfied staff become board with low skilled repetitive tasks within a single cell (work can be monotonous) Less efficient use of resources – can not achieve the benefits of economies of scale "

Answer 19

Focuses on attracting customers and allowing easy movement throughout the store, while providing high exposure to certain products Strategies include: ‘High impulse’ or ‘high margin’ products in predominant locations Locating ‘high draw’ (essential/popular) items on opposite sides of the store Locating ‘power items’ (high priority items for most shopping trips) at intervals throughout a series of aisles

Answer 20

An office layout focuses on efficient movement of information and proximity to resources and improved communications. Strategies may include: Provide a break room – enable employees to take a break from the work environment Personal storage space / meeting rooms Office working space is often ‘open’ or in pods – with staff working closely together, a code of conduct is often adopted called ‘cubicle etiquette’ (ensuring minimal noise and tidy workplaces

Answer 21

Controlling the release of materials into the production process Receiving materials Storing materials safely Identifying ongoing materials requirements through timely purchase of goods and through forecasting Reducing holdings of surplus stock

Answer 22

Is the strategy that manages the use storage and delivery of materials to ensure the right amount of inputs is available when required in the operations system

Answer 23

Is the goods and materials held as stock by an organisation

Answer 24

Is the physical handling of gods in the warehouse an at distribution points

Answer 25

Adequate material handling procedures and techniques can result in a more efficient production process and cost savings – proper handling can also reduce accidents, breakages and spoilage Timely purchase of goods to prevent a surplus of holding stock

Answer 26

Is an outline of the activities undertaken to combine resources (inputs) to create goods and services (outputs) Outline of the transformation process Organisation needs to decide what to produce, how to produce it and how much of it Provides basic details for materials planning

Answer 27

Details what is to be produced and when

Answer 28

Linked to specific delivery dates or contracts for delivery in the future Business cannot increase it’s rate of production without increasing the amount of necessary inputs Inability to conform to MPS could lead to decisions such as upgrading plant, equipment and employing more staff Provide a clear focus to employees of what an organisation is trying to produce over a period of time.

Answer 29

Involves developing an itemized list of all materials involved in the production to meet the specified orders

Answer 30

Completed once MPS is updated Ensures accuracy and helps to build more effective supplier relationships Helps to reduce the cost by minimizing waste MRP should consider: Lead time required by suppliers – whether items need to be ordered in advance (days, months, weeks) The exact number of inputs needed to complete the task The amount of stock (inventory) on hand Purchasing procedures e.g. whether the organisation wishes to take the advantages of bulk buying receiving discounts from suppliers

Answer 31

Ensures that the costs are minimized and that the operations system has access to the right amounts of inputs when required

Answer 32

Costs can be minimized by not allowing materials to remain idle and by making sure that inputs are available for the operations system when needed – an operations system that runs out of materials will not perform at optimal level Strategies may include: Some organisations choose to have a large inventory base ensuring they will not run out Not allowing materials to remain idle – stock taking up space for lengthy periods of time can result in missed opportunity to invest in other capital Materials can also have a ‘used by date’ which means they can become unusable after a certain period of time Smaller inventory results in lower costs, but requires efficient handling to ensure inventory does not run out to avoid devastating consequences Bar coding and computerized stock to control inventory and minimize loss or theft of stock as well as proving an ‘up-to-date’ information about stock such as stock levels Stocktakes physically count stock on hand them compare to the amount expected to be available – any differences indicates issues with stock control

Answer 33

Is a materials management strategy that ensures that the exact amount of materials inputs will arrive only as they are needed in the operations process Appropriate for non-durable goods

Answer 34

Benefits Minimize storage space required and decrease storage costs and capital investment required Reduce chance (or effect) of over ordering Reduce risk of waste in storage Limitations Reliant on suppliers – if delivers are delayed or canceled insufficient inputs may be available to conduct operations (productively if at all)

Answer 35

Is the range of suppliers from which the organisation purchases materials and resources

Answer 36

Low quality – it is difficult or costly to produce quality products Low quantity – organisations cannot meet demand (or produce anything) If materials are not on hand nothing can be produced

Answer 37

Assessing location (distance) to suppliers Efficiency of delivery Stock use rate Price and comparisons (including quality) with other suppliers of similar products

Answer 38

Suppliers must be able to guarantee delivery and adapt to varying production schedules LSO’s have recently come to terms with developing more sustainable (greener) supply chains to promote social responsibility – suppliers agree to the organisations code of conduct for suppliers Maintaining effective relationships with suppliers to provide more productive outcome and minimize waste. Monitoring and investing time into building relationships is costly

Answer 39

Refers to the degree of excellence of goods and services and their fitness for a stated purpose A quality product should be durable, well designed, easy to use and delivered on time

Answer 40

Minimize waste and defects Strictly conform to standards Reduce variance in final output

Answer 41

Quality control Quality assurance Quality management

Answer 42

Involves the use of inspections at various points in the production process to check for problems and defects

Answer 43

Specifications or benchmarks are set before the physical checks are completed Actual performance is then compared to the established criteria if the established criteria is met it is likely the business will be meeting customer expectations – competitiveness also increases as costs associated with waste and faulty products are reduced

Answer 44

Establish performance standards Inspect performance Compare actual performance with standards Take corrective action if necessary

Answer 45

Benefits Defects recognized – immediately by trained specialists Issue identifies – in production process that can later be addressed Accountability for quality rests with management and QC team Clearly defined roles for personnel and workers Limitations Some defects may be missed Limited focus on production only Workers avoid responsibility for quality and do not feel encouraged to suggest improvements Lack of ownership over quality

Answer 46

Involves the use of a system so that an organisation achieves set standards in production

Answer 47

Certification by an external body which shows the quality of the production meets a set of predetermined quality standards QA sets specifications that an organisation must meet to gain certification – an achievement valued by customers An International Standardization organisation (ISO) provides guidelines on how organisations should establish quality assurance systems by adopting specific procedures, controls and recording and documentation measures

Answer 48

Benefits Productivity improvements from improved processes that reduce waste Consistent standard of quality across whole organisation Suppliers have documented quality systems Loss of experienced staff has less impact Employees and management share responsibility for improving quality" Limitations: Expensive to implement –high cost of audits/training Pressure on management to create and continually update processes Audits and extensive training time consuming and can detract from core business Time and cost issues negatively effect productivity

Answer 49

is an ongoing organisation wide commitment to excellence that is applied to every aspect of the organisations operation

Answer 50

Quality becomes both a commitment and a responsibility to every member of the organisation Aims to provide zero defects whilst maximizing customer satisfaction TQM can improve price competitiveness and quality – allowing a business to attain a ‘competitive advantage’ W Edwards Deming said that: If employees tried to build a product correctly the first time, then organisations would avoid the expense of inspections and waste of rejected products

Answer 51

Deming’ believed that quality problems would be best solved with an emphasis on employee involvement – many organisations use ‘quality circles’ as a means of achieving employee empowerment

Answer 52

Are groups of workers who meet to solve problems relating to quality Participation of employees in decision making encourages worked who meet to solve problems relating to quality Quality circles introduce ideas from all areas of the organisation that will improve quality and the processes to improve productivity

Answer 53

Involves and ongoing commitment to achieving perfection

Answer 54

The process that involves a constant evaluation of and improvement, in the way things are done in a LSO Kaizen emphasizes continues improvement in all facets of an organisation All employees are involved in continually seeking ways to improve work performance Benchmarking against worlds best practices

Answer 55

Quality is based on the expectations of the customer – includes ‘internal customers’ All team realize they are serving needs of customers – external or another team within the organisation reliant on quality of their input

Answer 56

Benefits Organisation-wide responsibility – all workers and management have responsibility for quality – improving employee motivation and input Continual assessment – of every aspect of the organisation Limitations Allocating responsibility for errors is difficult Reliant on staff motivation and willing to contribute Difficult to manage – if staff of managers have poor communication skills Expensive – with training and costs associated with implementing and monitoring

Answer 57

Benefits Reduced time and errors in process Reduction in labour costs Improved health and safety performance New opportunities – for upskilling (acquiring of new skills) Speed up (shorten) processes Maximize use of raw materials Limitations Large capital investment – to purchase implement and train employees Impact on workforce – may lead to job losses and increased stress for workers required to use new technology "

Answer 58

Includes any technology used in the office environment such as; computer, hardware and software, cabling severs, internet, eftpos, telecommunications. Both service and manufacturing use office technology (services are likely to use more though) Development of technology has enabled the opportunity for people to do more work in less time which means a greater range of tasks can be completed in work time

Answer 59

Benefits Can work from many locations outside the office Enables tasks to be completed in less time (more efficient) and more accurately Limitations Cost to purchase, implement maintain and operate

Answer 60

Are highly specified from of technology capable of complex tasks

Answer 61

Used in engineering and special areas of research, as well as assembly lines Allows a high degree of speed, strength, precision and accuracy generally unmatched by human labour Use to undertake repetitive tasks No emotional complaints – work conditions, hours, management or pay High cost items usually unaffordable for small/medium firms (only affordable to LSO’s)

Answer 62

Is a computer design tool that allows a business to create product possibilities from a series of input parameters Once

Answer 63

Once the design is created it can be viewed on many angles assisting designers and end users to visualize what is to be produced Materials and time required for completion can be calculated, which then enables costing for the project to be quantified If cost is too high or design is too limited, input parameters (limits) can be altered

Answer 64

Is software that designs and controls manufacturing processes

Answer 65

Can be linked to CAD | CAM can be used broadly to calculate how much each input would be required

Answer 66

Is the method of manufacturing in which the entire production is controlled by a computer

Answer 67

CIM uses a computerized system to combine CAD and CAM to manage the entire production process (product design, analysis, planning, purchasing, costing, inventory control and distribution can be controlled by a computer Can take product from concept to production very swiftly

Answer 68

Refers to going over and above legal requirements to satisfy all stakeholders Initially can have a negative affect due to higher costs – however long-term gains form more productive workers, increased satisfaction from customers and better yield for shareholders due to increased sales will outweigh any investment costs

Answer 69

Managing inputs appropriately Managing suppliers appropriately Managing staff appropriately Managing customer relations appropriately

Answer 70

procurement (supply of inputs) – ensure suppiers are ethical and socially responsible – this may be costly and take time and effort to investigate Fair dealing with suppleirs – prompt payment Local VS international suppliers – local creates jobs for the cimmunity, the increased spending from wages the local community where as overseas suppliers take away from Aus’t eco growth Greenhouse gas emissions and increases in environmental costs (choice of transport) Environmentally sustainable inputs – (cost more and may not be available locally e.g resources and materials

Answer 71

Efficient use of resources – minimize wastage Not appropriate for organisations to offer suppliers gifts such as free meals, trips or entertainment based on personal friendships

Answer 72

Occupational health and safety - beyond legal requirements – improved outcomes for staff, less time lost through injuries. Can be costly for rewriting procedures, providing safety equipment, writing documentation etc Training – benefits staff by upskilling increasing motivation – however loss of time while employees are trained, as well as the cost of training Efficient use of resources – minimize wastage Irregular and incomplete maintenance of production facilities can result in detrimental consequences Introduce an online health and safety training program

Answer 73

create good products that provide value – fir for the intended purpose and provide value for money Packaging decisions – aim to minimize packaging and reduce the environmental damage while still considering perishable items and hygiene Dangerous or defected products could result in injury Delivery option – (e.g replacing older cars with green environmentally friendly cars) Ensure goods and services are available and accessible to all customers – all nationalities including disabled (installation of auto entrance doors)

Answer 74

Consists of all the activities in which managers engage to produce goods and services ACreating, operating and controlling a transformational process that takes a variety of resources to produce and produces outputs of goods and services to satisfy consumer demand The core objective of all organisations is to effectively produce goods and services – and operations management is the strategy used to achieve this objective Production involves the skillful brining together of a number of resources such as; finance, equipment, management, technology and people to create finished goods and services through a series of operations

Answer 75

Technology Product design layout Materials management Quality management

Answer 76

Refer to the systems that organisations are introducing to maintain customer contact Can be used to improve customer service and competivness as it stores infomation about existing and potential customers Use software to handle contact between a business and its customers. This allows more accurate identification of customers and their needs (improves services provided to customers)

Answer 77

Is the quality management approach that seeks to identify and remove the causes of problems in the operations process, achieving virtually defect free process (99.999%) Deals with quality management

Answer 78

# Define - project goals that will satisfy demand Measure - characteristics that are critical to quality such as production capabilities and risks Analyse - the cause of defects Improve - proposing ways to improve defects Control - the performance of the process so that defects are reduced or eliminated

Answer 79

The social movement that Aims to help producers in developing countries create fairer trading conditions for themselves Free trade is about responsible payment to producers, decent work conditions for workers and sustainable farming practices Fair trade is governed by a standards set by international certification body of fair trade international - responsibilities of members to comply with standards of quality

Answer 80

Refer to the systems that organisations are introducing to maintain customer contact Can be used to improve customer service and competivness as it stores infomation about existing and potential customers Use software to handle contact between a business and its customers. This allows more accurate identification of customers and their needs (improves services provided to customers)

Answer 81

Is the quality management approach that seeks to identify and remove the causes of problems in the operations process, achieving virtually defect free process (99.999%) Deals with quality management

Answer 82

# Define - project goals that will satisfy demand Measure - characteristics that are critical to quality such as production capabilities and risks Analyse - the cause of defects Improve - proposing ways to improve defects Control - the performance of the process so that defects are reduced or eliminated

Answer 83

The social movement that Aims to help producers in developing countries create fairer trading conditions for themselves Free trade is about responsible payment to producers, decent work conditions for workers and sustainable farming practices Fair trade is governmened by

Answer 84

The social movement that Aims to help producers in developing countries create fairer trading conditions for themselves Free trade is about responsible payment to producers, decent work conditions for workers and sustainable farming practices Fair trade is governmened by

Answer 85

Obligations a business had over legal responsibilities to wellbeing of consumers shareholders and community and environment

Answer 86

The application of moral standards to management behaviours

Answer 87

Aims to eliminate waste at every stage of production. Involves analysing each stage of the production process detecting where inefficiencies are and correcting them

Answer 88

Reduces unnecessary movement of workers machines and products Minimises storage required Reduces defects in products and equipment breakdown Reduces waste Shortens time taken to produce new products

Ch 3 Flashcards

(112 cards)