decision making to improve operational performance Flashcards
(19 cards)
What are common operational objectives?
Costs, quality, speed of response, flexibility, environmental objectives, and added value.
What is the value of setting operational objectives?
Provides focus for the operations function, helps measure performance, improves efficiency, and aligns with overall business strategy.
What are key operational performance calculations?
Labour productivity, unit costs (average costs), capacity, and capacity utilisation.
Why is capacity important in operations?
Ensures the business can meet demand efficiently without overproducing or underutilising resources.
How can efficiency and labour productivity be improved?
Through training, better equipment, motivation, and improved work organisation.
What are difficulties in increasing efficiency and productivity?
Resistance to change, high training or investment costs, and potential drop in quality or morale.
What is lean production?
Minimising waste without sacrificing productivity, e.g., Just in Time (JIT) vs. Just in Case (JIC).
What is the difference between Just in Time and Just in Case?
JIT reduces inventory by producing only when needed; JIC holds buffer stock to prevent shortages.
What is the optimal mix of resources?
The most efficient balance of labour and capital depending on the type of production.
How does technology improve operational efficiency?
Automation, robotics, inventory management, and improved customer and supplier communication.
What are methods of improving quality?
Quality assurance (preventing errors) and quality control (checking for errors after production).
What are benefits of improving quality?
Increased customer satisfaction, repeat business, lower costs due to fewer returns.
What are the consequences of poor quality?
Loss of customers, increased costs from returns and repairs, and damaged reputation.
What are ways to manage supply to match demand?
Outsourcing, using temporary/part-time staff, and producing to order.
What factors influence how much inventory is held?
Lead time, re-order level, buffer stock, and re-order quantity.
What is an inventory control chart used for?
To monitor stock levels and plan reordering to avoid stockouts or overstocking.
What influences the choice of suppliers?
Cost, reliability, quality, ethical practices, and lead times.
How can a business manage its supply chain effectively?
Through strong supplier relationships, accurate forecasting, inventory control, and responsiveness.
What is the value of outsourcing?
Reduces costs, increases flexibility, and allows the business to focus on core activities.
