Operations Management - Production Flashcards
3 Types of production
Job - one off unique production
Batch - certain number
Flow - continuous
Advantages of job
- unique, so can be sold at higher price
- skilled workers so higher quality
- keeps workers motivated
Disadvantages of job
- labour intensive
- higher cost to produce
- can’t benefit from economies of scale
- low amount of sales
- time consuming
Advantages of batch
- greater quantities can be produced
- reduced waste
- standardisation so increased efficiency
- better quality than flow
- uses machinery more than job
- lower wages
Disadvantages of batch
- down time to change machinery over so not producing
- if one thing goes wrong, while batch is effected
- gets boring so less motivation
Advantages of flow
- can produce lots more
- standardised products
- faster production lowers average cost so benefit from economies of scale
- lower wages as lower skilled workforce needed
- automated so less mistakes
Disadvantages of flow
- lower quality products
- job gets boring, no motivation
- breakdowns effect whole production
How to determine what type of production to use?
- what product is
- size of the business
- cost of making it
- how many you need
- amount of workers
What is specialisation?
Where a firm specialises within a market or product
Benefits of a firm specialising:
- efficiency
- better quality product
- greater knowledge of the market
Drawbacks of a firm specialising:
- greater risks, compared to those firms with more products
Benefits of workers specialising in one job?
- higher quality products
- motivational
Drawbacks of workers specialising in one job:
- repetitive
- lower skilled jobs can be demotivating
- may lead to lower quality
- may lead to higher absenteeism and higher labour turnover
What is division of labour?
How you allocate labour by task
What is productivity?
The output per worker
How is productivity calculated?
Total output ➗ number of workers
How could you increase productivity?
- setting targets
- means of motivation
- improving working conditions
- training and education
- more organised production ie. Lean production
- teamwork
- improved technology/ machinery
How to calculate capacity utilisation?
Hours used ➗ total hours available ✖️ 100
Why don’t you want 100% capacity utilisation?
Doesn’t allow for any flexibility
How do you get over 100% capacity utilisation?
Subcontracting/outsourcing - firms producing things for you
Other measures of productivity:
Profits Costs Average costs Revenue Value analysis
How to increase labour productivity?
- increased technology
- training
- motivational techniques
- lean production techniques
- flexi hours, job share etc
2 techniques to improve efficiency is known as
Work study (observing what you do) and bench marking (setting standards)
How can the firm increase value?
- increased quality means they can increase price
- lower average costs
- try and get alternative supplies