Gibbins operations Flashcards
(31 cards)
Operations management meaning
Area of management concerned with designing and controlling the process of production and redesigning business operations in the production of good and services
Adding value=
The difference between the price of the finished product/service and the cost of the inputs involved in making it
How to add value(function/cost/aesthetics)
- building a brand
- delivering excellent service
- product features and benefits
- offering convenience reducing cost
Benefits of adding value
- charging a higher price
- creating a point of difference from the competition
- protecting from competitors trying to steal customers by charging lower price
Disadvantages of adding value
- not guaranteed that the cost if adding value can be recouped
- the increase of price may restrict sales
- the elasticity of product may make price increases hard to accept
Value added =
Selling price - cost of inputs
The mission statement
Is the overriding goal of the business and the reason for its existence. A mission statement provides a strategic perspective for the business and a vision for the future
Aim meaning
Long term plan for the business
E.g. to survive, grow, increase market share, increase or maximise profit
SMART objectives
Specific Measurable Achievement Relevant Time bound
Invention meaning
The action of creating a new process or device, opening a new market
Innovation
Adding on developments to an existing product, improving its functions
Job production
Involves firms producing items that meet the specific requirement of the customer
- these are a one-off, unique items such as those made by an architect or wedding dressmaker
Pros to job production
- meets customer needs
- quality
- motivational
- flexible
- add value
Cons of job production
- No economies of scale
- higher costs
- skilled labour
- cash flow problems
Batch production
Many similar items are produced together. Each batch goes through one stage of the production process before moving into the next stage e.g. bread, clothing
Flow production
Involves a continuous movement of items through the production process. Mass
Ads of flow production
Is continuous Economies of scale Standardised products Division of labour and specialisation Employees become skilled and more efficient
Cons of flow production
Difficult to alter the production process Boring for employees High setup costs Breakdowns Stock holding
Cell production
- Workers are organised into multi-skilled teams
- each team is responsible for a particular part of the production process including quality control and health and safety
Cell production pros
- closeness of cell members should improve communication avoiding confusion
- workers become multi-skilled and more adaptable to future needs of the business
- great worker motivation as there is variety of working tasks
Cons of cell production
- workers can feel that they are constantly being pushed for more and more output with no respite
- cell production may not allow a firm to use their machinery as intensively as Flow production
Research and development meaning
The process that enables the creation of new and improved products to meet the customers needs and wants
Process of R and D
- Market research Vs product orientated
- brainstorming
- morphological studies( grid system generates ideas cheaply and quickly)
Factors influencing R and D
- level of competition
- product
- external environment
- state of the economy
