Operations Flashcards
(34 cards)
Logistical management of inventory 4 steps
1) inventory- getting supplies from suppliers
2) storage - ensuring appropriate storage of stock
3)order processing - dealing with customer orders and ensuring they get correct thing
4)distribution - deciding on best method to deliver to customers , eg road air rail
Consequences of overstocking 5
Out of date
Theft
Extra storage costs
Out of fashion
Money tied up in stock
Understocking consequences 5
Turn away customers
No bulk buying discounts
Bad rep
Production may be haunted due to running out of inventory
Increased delivery costs
6 points on stock management system
Re order level
Minimum stock level
Maximum stock level
Lead time
Buffer stock
Re order quantity
What is JIT
Ordering supplies when required or when a order is placed
4 pros of JIT
No wastage all inventory used
No money tied up in stock
No warehouse 4 saves costs
More responsive to external factors
4 cons of JIT
If deliveries late production haulted
Requires excellent relationship with supplier, time consuming to get
Relies on good infrastructure between supplier and firm
No room for error in production
What is centralised storage
All inventory in one central large warehouse
4 pros of centralised storage
Specialist staff employed 4 improves speed of inventory management
Can store massive amounts of stock 4 bulk buying
May be cheaper than several decentralised warheouese s
Easier to track stock
3 cons of centralised storage
Specialist staff 4 higher wages
Specialist equipment 4 maintenance and costs of it
Inventory has long delivery times to reach stores
What is decentralised storage
Inventory held in several small storage rooms close to stores
3 pros of decentralised storage
inventory always close at hand if needed
More responsive to local needs
Low chance of overstocking these warehouses
4 cons of decentralised storage
Theft as lack of security
Lack of specialist staff 4 handling of inventory inefficient
Hard to track stock
Often under stocked
Role of logistics manager
1 plans for stock needed
2 organises the staff and equipment needed for logistics
3 commands warehouse staff to complete tasks
4 coordinates supply chain and methods of distribution
5 controls quality , quantity , cost and efficiency of movement of stock
6 motivating staff
Purpose ofnsales budget 3
Targets for staff
Used to reward bonuses when targets met
Motivates staff to work harder
What is capital intensive
Producing products PRIMARLIY by means of machinery and equipment
CAN BE EUTHER AUTOMATION OR MECHINISATION
What is automatisation
Production fully automatic
5 pros of automisation
Consistency highest possible
CAM doesn’t loose concentration 4 low/no mistakes
No breaks or holidays for robots
Robots can perform dangerous tasks humans can’t
Lower wage costs as less employees needed
4 cons of automisationm
High setup costs
Breakdown = huge loss of production, time and waste age of mats
Replacing employees with machines demotivated remaining employees
Lack of human touch = lack of creativity
What is mechanisation
Labour and machines working together in production
Pros of mechanisation
Contsineecy hugh as human error reduced
Speeds up production
Human touch still present 4 creatucuty
Cons of mechanisation 3
Human error still involved
No production 24/7
If machinery breaks workers left idle
What is labour intensive production
Humans doing most of the work
3 pros of labour intensive
High creativity
Labour could be less expensive then a purchasing machinery
Employees more motivated
