operations management Flashcards
(153 cards)
1
Q
why do you have operation management objectives?
A
to provide a sense of direction and motivation
they need to be SMART
2
Q
name two reasons why targets may be unrealistic
A
not the right machinery or sufficient employees
3
Q
what do you need to consider when setting operations objectives
A
legal status and size of business
the state of economy- growing economy make it easier to achieve targets
level of competition in market - highly competitive= low price and lower profit margin.
government of the day-as part of political agenda may be encouraging or discouraging business. level of taxation can impact.
legislation can impact production set targets
4
Q
external factors on operations management (social factors)
A
changing tastes- affect demand for products, so effect what business produces.
holidays abroad- e.g cruises more popular as people no longer feel for elderly.
religious changes- UK moving to multi cultural society so changes in purchasing habits, so produces responded to what they create. e,g food.
5
Q
external factors on operations management (ethical factors)
A
how product is produced- sustainability more important
level of wastage- production process save energy?
changing resources more significant-
labelling of packaging.
6
Q
external factors on operations management (environmental factors)
A
healthy regard for planet and its resources- growth in concern
the use of sustainable resources in production process will enhance credibility & enhance sales.
7
Q
external factors on operations management (legal factors)
A
level and specific nature of legislation
complying with law is essential as not will damage reputation
legislation can effect production process- health and safety may have cost implications
8
Q
external factors on operations management (economic factors)
A
state of economy- terms of level of inflation will affect cost of production
the level of unemployment- availability of labour to produce goods.
cost of labour- full time employment wage increases & cost of labour= business using machines instead
growth in economy- business more confident to invest so meet growing level of demand.
the value of pound- strong pound harder to sell abroad
9
Q
external factors on operations management (political factors)
A
nature of government in power
the concern as to whether a particular political party would increase minimum wage- affect business as they budget for following years costs can either be passed on to the consumer or absorbed, often depending upon the price elasticity of the product.
10
Q
external factors on operations management (technological)
A
technology is ever changing
rapid technological advances- More money is being spent on research and development in order to either remain competitive or, in some instances, be viewed as the market leader in terms of new technology.
technology for automatic steering and parking
solar energy- cut energy bills- allowing operations management to spend saved energy bills elsewhere.
11
Q
external factors on operations management (international factors)
A
golablisaition pace increases- need to be aware of markets growing .
globalisation offers more choice
12
Q
what is added value
A
the difference between the actual price charged for a product or service and the actual cost of all components and assembly of the product or service.
13
Q
what are the advantages of added value
A
Being able to charge a higher price.
A higher level of profit.
The higher price may enhance the image of the product or service.
It may enable the business to target its chosen market more easily.
It may offer the opportunity to make the product more distinctive and establish a unique selling point (USP).
14
Q
name three ways added value can be done
A
high standard customer service
additional features
high quality products
delivery service
15
Q
benefits to stakeholders of added value
A
customers- although price higher they get a more unique product.
customers- additional service
customers may feel additional features good value for money.
suppliers- added value lead to increase sales so suppliers supply more
shareholders- profits increase & dividends.
16
Q
disadvantages of added value
A
It is not guaranteed that the cost of adding value can be recouped by increasing the price.
The increase in price needed to gain from added value may restrict sales and therefore sales revenue.
The amount of competition may make it harder to increase the price in order to recoup the cost of adding value.
The elasticity (price, income and advertising elasticities) may make any required price increase difficult to be accepted within the market.
17
Q
what is innovation
A
process where ideas are transformed into new products or services.
18
Q
what is research and development
A
set of activities intended to identify new ideas that have the potential to result in new goods and services.
19
Q
what are the main aspects covered in research and development
A
to launch new product successfully, to ensure meet customers needs.
examines how to improve efficiency
explore alternative methods and material to produce goods.
aim reduce wastage in production process
maintain competitive advantage
20
Q
main problems with research and development
A
costly
risky as no gaurantee of success, could lead to cost with no revenue to cover costs.
other business can copy, even patents don’t last forever. as haven’t incurred same cost of research and development copy business could charge less.
unemployment- shift to capital intensive labour- trade unions object.
technological changes in communication after research led to changes in working practices for employees. phone. isolation & lack of team building.
market research- need to be sure product something consumers will buy.
21
Q
what is product orientation
A
this means that a business concentrates its activities on improving the quality of efficiency of the product.
22
Q
brainstorming- what is a morphological study
A
A method that generates a lot of ideas very quickly and therefore more cheaply
23
Q
what are the three aspects to value analysis
A
function
cost
aesthetic
24
Q
what is the function aspect of value analysis
A
The nature of the product will determine its task.
if it does not fulfil item function useless.
25
what is the cost aspect of value analysis
significance will vary depending on nature of product and market It is sold.
good value for money attractive to customer
It is often a challenge to guarantee the functional element of the product without incurring high costs.
26
what is the aesthetic aspect of variance analysis
look of the product.
for some goods little or no consequence, for others does. clothes
27
key information based around balancing aspects of variance analysis
difficulty for research and design department is how to balance.
All three aspects should be covered, but the nature of the product will determine which aspect is prioritised
28
what are the factors affecting research and design
level of competition in market - highly competitive research expenditure higher.
product type- The more sophisticated the product in terms of technology, the more likely that research and development will be needed to keep up with technological developments.
external enviornment
state of economy- recession more likely business take cutbacks.
29
what are the main methods of production
job, batch, flow, cell
30
what is job production
making one off, specialised products for each customer.
31
important aspects of job production
Job production is usually concerned with satisfying a consumer's specific needs and can also refer to the production being undertaken by one employee who completes the whole task. This type of production is often undertaken by small, local businesses
bespoke, tailor made and one off.
Job production tends to be labour-intensive, as the number of goods produced would not make it worthwhile investing in an automotive process.
The costs of setting up a job production process are significantly less than batch or flow.
The process is more expensive in terms of labour costs and the cost of materials, as there are few opportunities to gain from bulk-buying economies of scale.
32
what are the advantages of job production
meet exact customer needs
high quality of work - concentrated on only one single unit.
easier to motivate workers as build product from start to finish, so feel involved and committed.
easy to add value due to highly specialist work.
less stock is tied up
33
what are the disadvantages of job production
no opportunities for economies of scale.
high production costs
labour more likely to be skilled- harder to find and more expensive to employ and train.
slower process.
harder to gauge costs- as not done before.
higher labour and material costs.
34
what is batch production
where a number of similar items are produced in a set or group, go through all stages together but they can differ slightly.
35
important aspects of batch production
Every batch of goods goes through every stage of the process together. The process is then repeated, when the next batch goes through exactly the same processes.
As each stage of the production process is the same, different products can be produced using the same process
done by Hand or machine- doesnt matter.
36
benefits of batch production
produce in larger quantities than job.
some economies of scale dependant on batch size generally faster than job production due to the larger number of products produced
greater quantity= lower unit costs
more flexibility than flow to meet customer needs.
37
disadvantages of batch production
time delay between batches which means nothing produced (downtime)
changing machine to different press take serveral hours, nothing happens (downtime)
this reduces level of output compared to flow.
more stock needs to be held, adding to cash outflows.
more storage needed
less variety of work and low level skill needed- not as motivating as job. affects morale and productivity.
38
what is flow production
involves identical products being made on an assembly line. the product Is made in stages, with parts being added as it moves along assembly line.
a conveyor belt approach.
39
important aspects of flow production
is used in order to produce vast quantities of a standardised product. The division of labour enables employees to concentrate on one particular task in the production process and therefore they are able to increase the level of productivity.
large numbers that are produced, the level of capital equipment used in the production process is very high. Flow production is often automated.
40
what are the advantages of flow production
economies of scale & reduce unit cost of production
large scale of production- employees benefit from division of labour and reduce costs further.
standardised product optimised production.-little downtime as continuous
low costs
more opportunities for division of labour (specialisation) where labour can concentrate on specific tasks and enhance productivity.
41
what are the disadvantages of flow production
high initial set up costs for automated systems.
takes a lot of planning to organise flow system.
lack flexibility to produce wide range of products
if line stops, whole production stopped unlike batch.
repetitive nature of production tasks= boring and affects motivation. affect productivity, labour turnover and absenteeism.
large amount of stock in terms of work in progress.
greater reliance on suppliers to deliver in time .
lead time to set up substantial.
any change in products= considerable amount of downtime.
42
what is cell production
production divided into set of tasks, each set completed by a work group.
43
important aspects of cell production
The layout of a cell production plant is often U-shaped to enable the process to be contained within a given area in which a team operates.
A reduced version of cell production operates when a team is responsible for a section of the production process or collection of workstations within the productive process. intention to empower workforce and encourage more responsibility.
44
what are the advantages of cell production
improved working conditions as employee work in teams. reduces boredom.
employees are responsible for the work within their own cell, there is an incentive to ensure that the quality of the work is high. reduces waste.
sense of responsibility.
opportunity for job rotation in team.
45
what are the disadvantages of cell production
expensive set up costs
tools are duplicated
46
what is division of labour
job or task is broken down, train people to do the task and as they repeat the task they get faster so productivity increases.
47
why would business introduce division of labour?
reduce costs
increase production
remain competitive in the market.
48
what are the impacts of division of labour
increase profit
suppliers more orders
employee gets bored
reduced price which can lead to bonuses
HR get more work as people leave.
49
what does changing the method of production depend on
nature of products involved
actual cost of machinery
financial situation of business (budget)
significance/ importance of customers, in terms of meeting specific needs
degree of competition in market
views of stakeholders of business
objectives of business
practice ability to change- e.g factory room
support for workforce
cost of possible redundancies
need to produce standardised products
availability of required technology.
50
what is project management
planning and organising activities using resources to achieve the business objectives
51
what are the main aspects of project management
planning
executing
monitoring
completing
52
what is critical path analysis
Critical path analysis (CPA) is the process that allows for the overall time of a project to be calculated, and to allow a diagrammatic network to be drawn which shows when activities should start and finish.
53
how do you calculate earliest start time
EST of previous activity + duration of current activity
54
how do you calculate latest finishing Time
last end activity- length of activity
55
what is float
a float shows how much time an activity may overrun before has an effect on next activity or whole project
56
what is total float
amount of time an activity can be delayed without delaying completion date.
more serious delay as a delay in overall finish time may lead to costs incurred.
57
how do you calculate total float
LFT of the activity- duration of activity - EST of previous activity
58
what is free float
the effect upon the next activity and not the project as a whole; consequently, any such delays are not as serious.
59
how do you calculate free float
EST of the next activity- duration- EST of current activity
60
what are the advantages of critical path analysis
a simplistic visual form of communication to show the order and timing of activities.
simple method to calculate the shortest time in which to complete the project.
knowing EST allows JIT production.
see when they need finance for the project to ensure supplies ready.
management can see consequences of potential delays.
61
what are the disadvantages of a critical path analysis
value of CPA depends on the accuracy of activity times
may be reduction in quality to make sure its done on time. cut corners.
doesnt consider cost implications
62
what are Gantt charts
a graphical representation of a scheduling system that allows for multiple task to be shown to be done at the same time. showing when activities begin and end allowing for overlap creating a predictable timetable.
63
what can Gantt charts do?
It can be used to calculate how long a project will take, and which activities are dependent upon other activities. It also shows which activities should be completed at any given time within the duration of the project.
64
what are the advantages of Gantt charts
simplistic visual representation so easy to read.
easy to monitor progress
shows time and resource allocation such as labour.
65
what are the disadvantages of Gantt charts
doesnt show critical activities
can't see at a glance EST or LFT
hard to calculate floats
66
what is PERT
There is a need to estimate the shortest (optimistic) time and the longest time to complete a given task (pessimistic).
67
how do you calculate PERT
(optimistic time taken + 4) x (likely time x pessimistic time)
divided by
6
68
what are the advantages of PERT
more realistic given pessimistic view
simple formula to apply
able to see critical path
a lot of data can be visually represented to aid decision making.
69
what are the disadvantages of PERT
Gauging the optimistic times is guesswork unless project been done before.
Gauging pessimistic times is guesswork.
Complicated to use.
70
what is productivity
relationship between inputs and outputs
71
how do you calculate productivity
Productivity= output
divided by
input
72
how can you improve productivity
use less inputs for same outputs
increase the output for the same input
monitor the employees but avoid micro management
set realistic targets
make jobs rewarding
team spirit
ergonomic layout
division of labour
profit incentives
suggestion boxed
73
what are economies of scale
Economies of scale are benefits that arise as the firm grows that result in a lower cost per unit of output
74
what are diseconomies of scale
diseconomies of scale arise when the cost per unit of output rises as the firm grows.
75
why do businesses grow?
greater profits
increased market shares
higher chance of survival
cost reductions as firms Better use of resources
76
what is internal growth
natural growth of a firm achieved by increasing production and sales.
77
what is external growth
growth achieved by takeover and merger.
78
what are the internal economies of scale
purchasing economies- gained as benefit of being able to purchase raw materials and other supplies in large quantities. larger firm greater likely discount.
Financial economies - larger firms negotiate cheaper loans
managerial economies and likely to get in first place as less risk
managerial economies- larger firms- employ specialist managers. firm operate more effectively. each manager carry out role in efficient way.
technological economies- as firms get bigger gain benefit of buying more effective capital equipment.
marketing economies-Larger firms can benefit from being able to use more effective methods of marketing. Above- the- line- methods such as television advertising are only available to larger firms.
risk- bearing economies- Small firms tend to concentrate on a limited range of products, while larger firms can spread the risk by diversifying into different products. They may even expand by taking over their suppliers. firm can reduce costs.
79
examples of external economies of scale
concentrating economies-Firms benefit as an industry grows in a specific region because skilled labour tends to move to that area. Local training colleges run specialist courses and suppliers that that industry tend to locate nearby. reduce costs.
Information economies. Firms can benefit as information services are set up for the benefit of the industry. This could be access to data or market research information that has been collected for whole industries, making it cheaper for individual firms to access information
80
why do diseconomies of scale occur?
communication problems.As a firm increases in size, it becomes more difficult to communicate in an effective way. The increased number of staff makes decision making more complex.
Problems in managing the production process. more space needed
machines work longer- more breakdowns
storage costs grow
production as hard to manage large scale production.
81
what is capacity
the maximum that a firm can produce in a given period with the available resources.
82
what is capacity utilisation
the proportion of maximum capacity being used by a business.
83
how do you calculate capacity utilisation
current output/ maximum possible output X 100
84
what is capacity management
Capacity management is concerned with the usage of the resources of a business.
The factory space, the mount of machines available, the number of raw materials at the disposal of the business, the IT capacity within a business and the amount of labour available, all have to be managed in order to produce the goods required at any given time.
85
what does capacity management include
The analysis of performance and the effect on capacity of introducing new products.
Performance fine tuning in an attempt to gain the most effective and efficient usage of the present capacity.
Capacity planning to aid the development of a strategy for the business.
Monitoring the capacity of the IT server within a business
86
how can a business reach full capacity
increase demands for products produced- however worry that increase too much and it is isn't viable.
produce different product with same resources
reduce capacity- sometimes by 'mothballing'- where some capacity is kept but not in usage. other cases productive capacity actually reduced. often case economic climate/ demand for product fall.
87
what are advantages of working at full capacity
decrease unit costs as the cost will spread across more sales.
fixed costs spread over more gods and variable costs may benefit from economies of scale such as bulk buying.
less wastage.
increase profit as result of falling costs.
busy employee= motivation * Opportunities for employee bonus payments through overtime or profit sharing
more competitive due to reduced costs, enhance survival.
stakeholders view business in good light
88
disadvantages of working at full capacity
not much time for maintenance- consequence downtime
hard to meet additional orders.
put pressure on employees- stressed leading to increased absence.put more pressure on other employees.
emphasis on producing goods so little time for training.
if attempt to satisfy as many orders will affect quality. fall in sales, damaged reputation.
corners cut
89
what are the constraints of reaching full capacity
level of competition
stage of the product life cycle
seasonality
alternatives available
outsourcing
90
what is stock control
used to show how much stock you have at any one time and how to keep track of it
91
what is stock
raw materials
work- in- progress- partly assembled or needed to complete.
finished goods- completed not yet delivered
92
what are the advantages of holding stock
satisfying demand- otherwise customers turn elsewhere
cope with fluctuations in demand-being able to take advantage of a surge in demand, for whatever reason, may lead to further sales and a potential increase in orders and revenue.
buffer stock to meet late deliveries- ensure sufficient stock available but also no disruption to production line.
cost saving due to economies of scale purchase
93
why are stock control charts used?
used to monitor the levels of stock.
They show the total cost of the stock on an annual basis, once both costs have been taken into consideration.
94
what determines the maximum stock level?
storage capacity-larger more willing to hold more stock.
products- characteristics in terms of its rate of turnover, size also affect level of maximum stock
level of sales- maximum stock level higher
cost of storage
degree of competition- market is competitive opportunity to gain more sales
timing of marketing campaigns
time of year- selling seasonal products may have to stock pile products.
amount of time taken to deliver new stock
95
what determines the reorder level
amount of time taken from reorder to actual delivery
how near supplier is to factory
sales records to date- if sales increasing earlier order level.
fixed time reordering- regular stock delivery and know how long needs to last. not suitable for business where demand varies.
economic order level
96
what determines minimum stock level
sales
lead time
if its run out before
97
what determines level of buffer stock
The likelihood of delays with deliveries.
The speed of the production process.
Reliability and location of suppliers.
The level and pattern of demand.
98
what is buffer stock
It is the difference between the minimum stock level and holding no stock.
It should be viewed as emergency stock.
99
what is lead time
This represents the length of time between reordering the stock and its arrival.
100
how do you calculate the average level of stock
maximum stock level + minimum stock level/ 2
101
what are the main methods of stock control
fixed reorder stock level
economic order quantity
last in first out
electronic point of sales
kaban
102
when is fixed reorder stock level used
used for more consistent products, doesn't suit varying demand.
103
what are LIFO and FIFO?
related to the order in which stock is sold and how restocking takes place.
This system does, however, assume that shelves are stacked correctly. If staff do not bring all the old stock to the front of the shelves and then stack the new stock at the back, the system breaks down.
Some stores are able to fill some cabinets from the back to ensure that the old stock is sold first; however, this is not possible on supermarket shelves, and therefore the success of FIFO relies on the efficiency of the employees.
104
what products do LIFO and FIFO work for and not work for?
suitable- long shelf life- such as paint or canned food.
not appropriate for-perishable products that have a short shelf life
105
what is economic order quantity
balances the costs for storage and the amount of stock and cost economies of scale
106
what is electronic point of sale
invaluable in ensuring stock levels and the reordering of stock is done efficiently.
The EPOS information is scanned by bar codes.
Each product has a unique bar code number which is read electronically at the checkout desk, and the information is passed via electronic data interchange (EDI) to a computer that will automatically reorder stock at the required level.
107
what is kanban
inventory control system used for JIT, can see the state of each piece of work at any time.
108
what is lean production
An approach in which all employees are involved in putting into operation a series of working practices that will help the business to meet the demands of the consumer in an efficient and effective manner.
It concentrates on the elimination of waste in its broadest sense.
It not only looks at how a business can reduce its waste in terms of materials used, but waste in terms of time.
Reducing the amount of energy used helps to reduce costs and thus contributes to the competitive edge for a business.
Anything that helps to reduce the time it takes to introduce a new product, produce a new product and deliver a product is related
109
what are the main types of lean production
time based competition
total quality management
jidoka
kaizen
JIT
cell production
ergonomics
110
what is time based competition
This is an attempt to reduce the time taken between the generation of the idea for a product and it going into production (lead time).
This can be speeded up by the usage of computer-aided design (CAD) and virtual design techniques that can eliminate the need to build prototypes.
tested virtually before actual product put into production.
111
what is total quality management
Total quality management considers the efficient usage of all the resources used within the production process, whether directly or indirectly related to the actual production process.
it is considered vital that all employees are responsible for the well-being of a business, and not just those that produce the product.
Employees are empowered to take the responsibility for the work they do. It is a different approach to the control of quality within a business. The emphasis is on finding ways to prevent mistakes rather than inspect for mistakes
112
what is Jidoka
automatically stopping the process when something is wrong and then fixing the problem on the line itself as they occur.
try and keep production line operating as downtime very expensive
113
what is kaizen
continous improvement.
achieved more easily if all employees are encouraged to take part in the process, and not just the management.
Improving one part of the production process often encourages improvements in other parts of the process.
114
what is quality and quality circles
help to achieve lean production
As quality is now considered as something that needs to be built into the product that is produced, the business needs to focus on how quality can be improved and maintained.
This is a voluntary scheme where employees, often between four and ten in number, are allowed to meet in working hours to discuss problems related to their working environment and workstations.
*They will also aim to create solutions to problems and pass on these suggestions to management.
115
what is just in Time
whereby levels of stock are kept low in order to reduce the amount of space required for storing stock.
By ordering stock in smaller quantities but with more frequent deliveries, the business is able to hold less stock with all the related advantages.
116
what is kanban
helps to operate JIT
A Kanban system helps to organise the flow of components onto the production line at the right place at the right time
117
what are the benefits of JIT
reduced costs due to less held stock
reduced lead time
reduced storage
less cash tied up
less likely damage or out of date so less wastage
118
what are the risks of JIT
delay in delivery have impacts
can't cope with error due to little held stock
large set up costs for kanban technology
119
what is cell production
form of teamwork Employees are placed in different teams, with each team responsible for a particular part of the production process. including parts derived to area and o f high standard & health and safety.
as long as process completed in time and passed on to next stage of high standard the employees in cell can rotate job to enhance Job satisfaction.
120
what are ergonomics
Ergonomics looks at the relationship between the employee and the capital equipment (machine or tool) being used.effective ergonomic design is one where the minimum amount of time is wasted in using the machine or equipment.
121
what are the location decisions
government incentives
planning regulations
globalisation
type of business
type of market
cost of labour- if labour intensive likely near cheap plentiful supply. select area of high unemployment.
cost of site
infrastructure- transport links. needs to move inputs in and outputs out. also facilities, schools transport links
competition
consumers
type of product/ service - if in primary sector no choice. access to customers as they want convenience
122
how does the market influcene location
a more competitive market keep the price low so the business has to reduce its costs.
123
definition of logistics
Logistics is concerned with supply chain management.
It includes the integration of the procurement of supplies, production, warehousing and transportation.
effective logistic management Is therefore reduction of the costs involved at each stage of these processes.
The flow of finished goods from the business to the customer is particularly important.
124
what are the main factors effecting logistics
warehousing- benefits of holding stock
customer needs- fast delivery?
information systems- organisation
transport- type needed
125
definition of supply chain management
the strategic co- ordination of business functions within a firm and with other businesses in its supply chain. The aims of SCM are to co- ordinate supply with demand and lower costs.
126
what is outsourcing
occurs when a business contracts a specialist company with expertise in a particular area to provide activities and/or services that would otherwise, be performed 'in-house' by its own employees. reduced the delivery responsibility.
127
advantages of outsourcing
initial capital costs of transportation, taxing vehicles, labour cost of drivers & human resource problems- e.g sickness.
the other firm now has the (contractual) responsibility to deliver on time.
that managers can concentrate on important core issues such as improving productivity or expanding into new markets.
128
what is subcontracting
outsourcing part of business operations to another company, finish within a certain contracted deadline
129
what are the disadvantages of outsourcing
arguments could occur over what has been agreed in the contract. payments could be withheld, creditor company could refuse to provide delivery service consumers are not interested in the finer details of a dispute they are only interested in receiving their product.
If they are not delivered on time there is a negative effect on the reliability of the company that produced the goods, which could jeopardise future orders and profits.
130
disadvantages of subcontracting
failure to provide agreed service on time to desired standard
if certain tasks are always subcontracted, the business never develops the expertise itself to perform that particular task.
those who are working for a subcontractor are usually paid higher rates than "regular' company employees, since they are not receiving the benefits that regular employees are in terms of (say) holiday or sickness pay. This might cause resentment and discontent.
131
what is offshoring
relocation of processes or functions from a ''home'' country to another country, shipping costs and long shipping times.
132
what is reshoring
refers to the returning of production operations back to the original country.
Sometimes a business will own its own distribution centre. Essentially, a distribution centre is a warehouse which may be a specialised building
133
what are the advantages of reshoring
ability to respond much more quickly to customer needs.
small production runs of new products can be market tested much more easily and then redesigned to meet customer requirements
134
why in some countries such and china is there advantages in offshoring
labour costs are lower and there is a huge demand for standardised product, but where the products are to be marketed in advanced economies
135
what is distribution management
the process of managing the movement of goods to the point of sales. It includes activities such as stock control, warehousing and transportation.
136
what is quality concerned with
The design of the product.
The reliability of the product.
Ensuring that the product is properly checked while in production and not only when completed.
product is fit for purpose- safe, fit, and last time
satisfying legislation-sets standards for products
137
why is quality imortant
markets because consumers now expect it as standard and not an optional extra.
business has to recall products because a major fault has been discovered, not only are sales lost, but the reputation of the business is damaged. Recovering a good reputation requires time and money.
138
what is quality assurance
concerned with the way in which a business sets out its procedures to assure its consumers that the products produced are of the right quality.
139
definition of quality control
this is a process In which a business reviews the quality of all factors involved in the process of production
140
what is wastage rates
A measure of employee performance that could be used alongside labour productivity is the level of waste and/or rejects produced
141
how do you calculate wastage rates
number of rejects produced (by employee or department/total number of products produced X100
is as a %
142
what are the main aspects of total quality management
focus on customer needs
improve quality in all departments
encourage team approach
involve employees
find ways to improve performance and quality
find inefficiencies and seek out waste.
143
what is benchmarking
Achieved by comparing a business with that of a competitor that us usually the market leader, I order to improve its own practices. It involves setting standards for the performance of the business.
identifying best practices- compare products
144
what are the types of benchmarking
internal, external, competitive, functional, strategic
145
what Is internal benchmarking
benchmarking businesses or oprerating from within the same organisation, for example business units in different countries.
146
what is external benchmarking
comparing performance of one organisation to two or more other organisations.
147
what is competitive benchmarking
enterprise compares its performance to that of the best competitor in its own industry.
148
what is functional benchmarking
compare to other industries but within the same function and similar processes
149
what is strategic benchmarking
examines the long term strategies and general approaches that have enabled high performers to succeed.
150
what are the limitations of benchmarking
limit access to sensitive material
hard to find the business with the 'best practice'
hard to implement improvement to reduce a gap in the market.
151
what are the main types of services
physical e.g builders
virtual e.g websites
152
what are zero defects
a business should be able to benefit from an improvement in quality and therefore a reduction in costs, as fewer defects equal less waste.
153
what are the main external quality standards
BS 5750
ISO 9000
