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Business Nat5 > Operations > Flashcards

Operations Flashcards

1
Q

What’s a supplier

A

Suppliers are companies that provide goods or services that a company or business requires producing its products or achieving its aims.

Suppliers can influence a business’s ability to produce a product or provide a service.

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2
Q

What are the factors that can influence a businesses choice of a supplier

A 
price
location and transport costs
lead time
product quality
reliability
Reputation
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3
Q

Describe PRICE that influences a businesses choice of supplier

A

The price of supplies will have a direct effect on how much it costs the company to produce a product. A higher cost ofraw materialswill lead to a highercost of production. If a company can find a cheaper supplier, it could lead to increased profit.

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4
Q

Describe LOCATION & TRANSPORT COSTS that influences a businesses choice of supplier

A

If a supplier is located near to your company the transport and delivery costs will be lower. If the product being supplied isperishableit would be better to source a supplier close to your business as they will be able to deliver the goods quickly.

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5
Q

Describe LEAD TIME that influences a businesses choice of supplier

A

the amount of time taken between an order being placed and an order being received. Some companies will require stock tobe delivered quickly especially if the products are perishable or the company is usingjust in time (JIT)stock

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6
Q

Costs and risks of overstocking

A

Money tied up in inventory could be invested elsewhere in a business.
Inventory can go out of fashion or spoil meaning the business will have to write it off as a loss.

Having too much inventory results in higher storage costs in terms of both overheadsand security.

Having too much inventory is better than having no inventory, as this would prevent any production. Overstocking has the benefit that it allows a business to meet any unexpected orders. But as a rule, it makes financial sense for businesses to keep down the amount of stock they hold.

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7
Q

Costs and risks of under stocking

A

Business cannot fulfil orders on time.
Production may stop due to the lack of available materials.

It will never be possible to meet unexpected large orders.

The business will be viewed as unreliable, and its reputation will be damaged.

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8
Q

Describe RELIABILITY that influences a businesses choice of supplier

A

If a supplier does not deliver at the agreed time, or with the correct goods, this can affect a business’s ability to produce and deliver their product to the customer

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9
Q

Describe REPUTATION that influences a businesses choice of supplier

A

Suppliers that have a good reputation will be more likely to fulfil orders on time and provide a high-quality product. If a supplier has a bad reputation, you may not be able to rely on them to provide the quality supplies that your company requires.

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10
Q

What to think of when choosing a supplier

A

Does the supplier offer discounts?
Does the supplier offertrade credit?
Are there any additional charges?
Can the supplier deliver on time?
Are the supplier’s prices competitive?
Is the supplier able to supply the quantity needed?
Are the supplier’s goods of an acceptable quality?

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11
Q

What is inventory management (stock)

A

Inventory is the materials held by a business in order to produce the product being sold

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12
Q

What are the three different types of inventory

A

Raw materials
Works in progress
Finished goods

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13
Q

How does a business mange inventory

A

Businesses will have a system in place to ensure they have sufficient inventory held in thewarehouse.
The system may utilize modern technology.

For example, barcodes may be used on products to relay information about sales to the warehouse via an ICT system. Then when the inventory reaches a set level or trigger point the business will be alerted to reorder and restock the levels of inventory.

Businesses must avoid the problems of having too much inventory, calledoverstockingand the problems of not having sufficient inventory, calledunderstocking.

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14
Q

What IS methods of production

A

The way a product is made will vary depending on:
the type of product
how specialized or customized the product is
the level of skills required by the workers

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15
Q

What ARE the methods of production

A

Job production
Batch production
Flow production

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16
Q

What is job production

A

Job production concentrates on producing one product from start to finish. Once one product is complete, another can begin. It is highly specialized and very labor intensive.

Some examples:
making a wedding dress
painting a house
building an oil rig

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17
Q

What are the advantages to job production

A

High quality product
Can customise orders
Workers involved in tier production start to finish

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18
Q

What are the disadvantages to job production

A

Production cost likely to be high
Production time might be longer
Investment in machinery might be higher as special equipment might be needed

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19
Q

What is batch production

A

Batch production enables items to be created stage by stage in bulk (‘a batch’).
Used in food production
Example croissants

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20
Q

What are the advantages to batch production

A

Allows flexible production

Inventories of part-finished goods can be stored and completed later

21
Q

What are the disadvantages to batch production

A

Making many sale batches can be expensive

If production runs are different there might be additional costs and delays preparing equipment

22
Q

What is flow production

A

Flow production is also known as continuous production. It enables a product to be created in a series of stages on.anassembly line.

Large numbers of the same goods are produced continuously in this production process.
Example car assembly plant

23
Q

What are the advantages to flow production

A

Automatic assembly lines saves money and time

Quality systems can be built into the production at each stage

24
Q

What are the disadvantages of flow production

A

Standardised product used

Workers find work repetitive and boring

25
Q

What is quality

A

Those features of a product or service that allow it to satisfy customers’ requirements.
“Fit for purpose!”

26
Q

What is quality methods

A

This section of operations looks at ways of improving the quality of the products or services that the firm produces or delivers

The ways in which a firm can improve the quality are

27
Q

What are quality methods

A 
Quality Control
Quality Assurance
Benchmarking
Quality circles
Total quality management
BSI
Other trade organisations.
28
Q

What is quality assurance

A

This is where the manufacturer checks the quality of the product at regular intervals throughout the production process

All aspects of the process are looked at to ensure there are no errors

29
Q

What is quality control

A

This where the manufacturer passes a sample of their raw material and the final product through a quality control check

Unacceptable products are discarded as waste or reworked to the acceptable standard

30
Q

What is quality circles

A

Small groups of workers meet at regular intervals to discuss where improvements can be made to the production process

Suggestions are made to management for approval before being implemented
Production workers know more about the production process than “managers”

Workers are motivated by being involved and consulted about production problems (empowerment).

31
Q

What is benchmarking

A

Benchmarking is the process of setting competitive standards, based on the achievements of other firms, against which an organisation will monitor its progress

Benchmarking tends to focus on the “best in class” companies, but for specific functions a company may compare itself to an organisation in a different industry.

32
Q

What are the types of benchmarking

A

Internal - comparison with a function within the organisation
External - comparison with other organisations
Competitive - direct comparison with a competitor
Generic - comparing general business activities (eg recruitment)
Customer - contrasting the level of fulfilment of customer expectation.

33
Q

What is the British standards intuition(BSI)

A

BSI is an organisation that produces national standards for certain products

A ‘Kite’ mark symbol is awarded to products that are proven to have met certain quality and safety standards

Although the paperwork and process of achieving the standard is lengthy, it provides the organisation with a competitive advantage as consumers have confidence in their product
Various International Standards (IS) can also be achieved.

34
Q

What is other trade organisations

A

Certain trade organisations introduce standards and logos to be displayed on products to say they have met agreed standards of quality and safety.

35
Q

What is quality management

A

This is a system of getting it right first time every time!

From the suppliers’ quality procedures through the manufacturing process and onto the retail quality controls and distribution
No errors are tolerated!

All staff, regardless of their position or job are expected to be involved in ensuring a quality end product

Every aspect of the business is scrutinised
Staff recruitment and training are viewed as essential

Constant auditing of processes to ensure they are working
Teamwork and employee empowerment at all levels of the organisation are seen as essential.

36
Q

What is labour and capital

A

All production operations combine the two factors of labor and capital. The importance of labor and capital to a specific business are described in terms of their intensity.

37
Q

What is labour intensive

A

Labour intensive is when products are mainly produced by human workers. Machines and special tools may be used too, but overall it requires human creativity and effort to produce the product.

38
Q

What are the advantages to labour intensive

A

Customised products are easier to make
Less expensive machinery costs
Humans can use their own initiative and problem solve

39
Q

What are the disadvantages to labour intensive

A

Quality of products can vary due to the worker
Skilled workers take time to train
Skilled workers will be paid more than others

40
Q

What is capital intensive

A

Capital intensive is when products are mainly produced by machines and robots, meaning the initial outlay and maintenance, will be very high.

41
Q

What are the advantages to capital intensive

A

Less employee wage and costs
Quality can be standardised
Machines can work 24/7

42
Q

What are the disadvantages to capital intensive

A

More difficult to customise in orders
Breakdowns in production can be costly
Initial set up costs for machinery high

43
Q

What is ethical and environment

A

All businesses must be socially responsible and adhere to government guidelines on how they can operate in terms of their effect on the environment and disposal of waste.

44
Q

What are the ways a business can operate ethically and environmentally

A

Renewable energy- solar panels or wind turbines could be used to help generate some of the electricity used in the production of products. This would reduce carbon energy consumption and in turn reduce energy costs incurred by the business.

Reduce energy consumption- special controls can be fitted to lights and machinery so they automatically switch off when not in use. This would reduce energy consumption.

Reduce transport- reducing transport requirements will reduce the carbon footprint of the organisation and will reduce pollution.

Recycling- using recycled packaging or recycling waste products would mean that an organisation may reduce production costs and meet their environmental aims. This would also reduce the amount of rubbish that goes to landfill sites.

45
Q

Costs of recycling (cons)

A

Recycled material may reduce the quality of the finished product
Image of the product may be perceived as inferior
Recycled materials need to be sorted which takes time

46
Q

What are the benefits of recycling

A

Can save money if recycled materials are used to make products
Can be used as a unique selling point
Reduces cost as landfill is required

47
Q

What is minimising packaging

A

Businesses use packaging to help preserve their product, transport it, protect it from damage and to attract customers. To help the environment and reduce costs most businesses aim to reduce the amount of packaging they use.

48
Q

Costs of minimising packaging (cons)

A

Increased risk of damage due to the insufficient packaging

May become less attractive to customers

49
Q

Benefits to minimising packaging

A

Can improve brand image

Reduces cost because landfill is required

Business Nat5 (1 decks)

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