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A2 Business > Operations Management > Flashcards

Operations Management Flashcards

1
Q

Lean Production

A

Working practices that focus on removing waste, whilst maintaining or improving quality.

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2
Q

Time Based Management and Lean Design

A

Reducing waste by managing resources, ensuring products are fit for the market in the shortest time. Aims to reduce wastage and time wasted on unproductiveness, to increase efficiency.

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3
Q

Simultaneous Engineering

A

Aims to minimise development times, where separate design and engineering stages are tackled at the same time.

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4
Q

Just-In-Time

A

Ordering materials just before they are needed. Lower storage / wastage costs. Suppliers are nearby and are flexibility / reliability. Late delivery could be costly.

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5
Q

How JIT is achieved

A

Based on pulled demand, aiming to operate with zero or minimal buffer stock. Needs to be 0 defects at every stage of production. Removal of hidden inefficiencies.

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6
Q

Critical Path Analysis

A

A technique used to identify which tasks can be done simultaneously and the order to when they need to be completed.

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7
Q

Nodes Thirds

A

Big One - Node Number
Top Right - Earliest Start Time
Bottom Right - Latest Finish Time

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8
Q

CPA Problems

A

CPA doesn’t ensure effective management
Project requires many activities, CPA may be confusing
Resources available

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9
Q

Kaizen

A

Continuous improvement - employees make suggestions for small-scale improvements. Provides motivation for employees given power / opportunity to increase efficiency

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10
Q

Kaizen Advantages

A
  • Efficiency of production
  • Removal of waste resources
  • Reduction in cost
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11
Q

Total Quality Management

A

This is when the idea of quality is instilled throughout the business, where quality is checked after each stage.

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12
Q

Operation Management Definition

A

The attempt to ensure that the right goods/services are produced at the right time at the right cost at the right quality.

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13
Q

Operational Targets

A

Predetermined targets which relates to a number of efficiency measures e.g unit costs, quality, capacity utilisation.

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14
Q

Under Utilisation

A

May increase costs, fixed costs spread over less output increasing unit costs.
Higher capacity creates economies of scale decreasing variable costs.

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15
Q

Capacity Utilisation

A

Current output as a percentage of potential output.

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16
Q

Benefits of Quality

A
  • Less wastage rate.

- Motivation increase productivity Recognition.

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17
Q

Improve Cashflow

A

Short term/long term finance i.e factoring, loans, sale and leaseback.
Lengthen the credit time to pay back suppliers.

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18
Q

Factors Affecting Suppliers

A

Price, Payment Terms, Quality, Capacity, Reliability, Flexibility

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19
Q

Quality Definition

A

This is when the good/service meet customer expectations.

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20
Q

Quality Assurance Measures

A

Each Stage of the production process, the product is checked to meet the quality requirements.

21
Q

Advantages of CPA

A

Individually assessing tasks CPA ↓ time
Resources can be ordered/hired on their EST, ↓ costs
CPA can show the implications of the delayed task

22
Q

Economies of Scale

A

Factors that cause unit costs to fall as the amount of output a business produces increases.

23
Q

Purchasing Power

A

Large businesses have the power to negotiate large discounts on bulk-orders with their suppliers, therefore reducing their variable costs


24
Q

Technological EofS

A

Large businesses are able to afford the capital needed to invest in new, up-to-date equipment / tech. Machinery can decrease unit costs
 and increase productivity.

25
Specialisation EofS
opportunity to hire specialists like IT consultants / accountants. Able to advise the business on how to reduce costs
26
Diseconomies of Scale Definition
Factors that cause the unit costs to rise.
27
Poor Comms DofS
Communication (may) harder when a business grows. Quality / motivation may suffer / mistakes - costly. Written comms (may) less motivating than face-2-face. Large firm time to communicate face-to-face so emails / letters.
28
Management DofS
Small businesses managing easy. When businesses start to grow and more people become involved, it can be hard to monitor aspects like productivity. Regular meetings may be required which will add to costs
29
How to change DofS
Delegate power and enrich jobs to increase motivation, hold regular training to improve management, and decentralise a business structure and empower staff in order to improve coordination.
30
Quantitative Decision making
Payback - How quickly the investments will be recovered | ARR - Average annual profit generated by the project
31
Qualitative Factors
Locate near where staff live Economies of scale Access to customers/suppliers and infrastructure
32
Multi-Site Advantages
Closer to customers + geographical market Easier recruitment Marketing/Managerial EofS Flex capacity by adding/removing locations Understanding of local market cultures
33
Multi Site Disadvantages
Duplication of activities Harder to control operations Challenging to communicate Strategic risk not understanding local market
34
Problems with international location
Language/Cultural differences - Costs, working hours, public holidays Economics/Political/Legal stability Impact on public image using cheap labour Communication
35
Stock Wastage
Stock wastage – loss of stock either in production or service process, e.g. scraps thrown away, reworking of items that were not done correctly initially or defective products that cannot be put right, damaged products due to improper handling or storage, stealing, passing the sell-by-date.
36
Stock Rotation
FIFO (First In First Out) or LIFO (Last In First Out). FIFO avoids the problems of leaving older stock to become unusable at the back of the shelf or warehouse.
37
Needs of Kaizen
CORE principle – Commitment (underlying drive), Ownership (opinions and have a say of the performance), Responsibility of having an opinion and personal Excellence. Marginal gains – little improvements work together to collectively find new ideas.
38
Cell Production
Organising production around teams, each team given responsibility to a stage improving quality
39
Stakeholders Affected - Lean Production
Employee - J-I-T, Kaizen Suppliers - J-I-T, CPA Shareholder - Long vs Short term Competitors - Loss in market share, pricing, less qualified labour stay with Kaizen
40
Internal Influences on Ops Obj
Corporate Objective Finance - investment/cost HR - quality/capacity of workforce Marketing - Product determines operational set-up changes to marketing mix may strain operations
41
External Influences on Ops Obj
Economic Environment - PED changes in D/S Competitors - Efficiency Technological - Innovation important Legal/Environmental - Regulation
42
Operational Strategies
Growth - Organic/Takeovers acquiring others operations | Economies of Scale - Purchasing, Technical, Managerial
43
Minimum Efficient Scale
Output for a business in the long run where internal economies of scale have been fully exploited, lowering unit costs
44
Diseconomies of Scale
Problems experiences as a firm increases the scale of production leading to a rise in unit costs - High Capacity breakdowns - Controlling productivity levels - Communication - Alienation losing morale.
45
DofS Solutions
Delegation, job enrichment, autonomous teams. Training for communication and listen to worker’s views. Decentralise power, empower with wider spans of control.
46
Capital Intensive
Minimise costs, small labour costs Large part is fixed costs buying capital High financial barriers to entry Inflexible hard to switch products
47
Labour Intensive
High Labour costs | Flexible to meet needs
48
Operational Innovation
``` Improve Productivity Lower unit costs Better Quality meet needs Product range risk bearing EofS USP creation adding value Competition innovated products hard to protect Availability of finance ```

A2 Business (10 decks)

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