Operations Management - Production Flashcards
(61 cards)
1
Q
3 Types of production
A
Job - one off unique production
Batch - certain number
Flow - continuous
2
Q
Advantages of job
A
- unique, so can be sold at higher price
- skilled workers so higher quality
- keeps workers motivated
3
Q
Disadvantages of job
A
- labour intensive
- higher cost to produce
- can’t benefit from economies of scale
- low amount of sales
- time consuming
4
Q
Advantages of batch
A
- greater quantities can be produced
- reduced waste
- standardisation so increased efficiency
- better quality than flow
- uses machinery more than job
- lower wages
5
Q
Disadvantages of batch
A
- down time to change machinery over so not producing
- if one thing goes wrong, while batch is effected
- gets boring so less motivation
6
Q
Advantages of flow
A
- 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
7
Q
Disadvantages of flow
A
- lower quality products
- job gets boring, no motivation
- breakdowns effect whole production
8
Q
How to determine what type of production to use?
A
- what product is
- size of the business
- cost of making it
- how many you need
- amount of workers
9
Q
What is specialisation?
A
Where a firm specialises within a market or product
10
Q
Benefits of a firm specialising:
A
- efficiency
- better quality product
- greater knowledge of the market
11
Q
Drawbacks of a firm specialising:
A
- greater risks, compared to those firms with more products
12
Q
Benefits of workers specialising in one job?
A
- higher quality products
- motivational
13
Q
Drawbacks of workers specialising in one job:
A
- repetitive
- lower skilled jobs can be demotivating
- may lead to lower quality
- may lead to higher absenteeism and higher labour turnover
14
Q
What is division of labour?
A
How you allocate labour by task
15
Q
What is productivity?
A
The output per worker
16
Q
How is productivity calculated?
A
Total output ➗ number of workers
17
Q
How could you increase productivity?
A
- setting targets
- means of motivation
- improving working conditions
- training and education
- more organised production ie. Lean production
- teamwork
- improved technology/ machinery
18
Q
How to calculate capacity utilisation?
A
Hours used ➗ total hours available ✖️ 100
19
Q
Why don’t you want 100% capacity utilisation?
A
Doesn’t allow for any flexibility
20
Q
How do you get over 100% capacity utilisation?
A
Subcontracting/outsourcing - firms producing things for you
21
Q
Other measures of productivity:
A
Profits Costs Average costs Revenue Value analysis
22
Q
How to increase labour productivity?
A
- increased technology
- training
- motivational techniques
- lean production techniques
- flexi hours, job share etc
23
Q
2 techniques to improve efficiency is known as
A
Work study (observing what you do) and bench marking (setting standards)
24
Q
How can the firm increase value?
A
- increased quality means they can increase price
- lower average costs
- try and get alternative supplies
25
4 external economies of scale
1. Auxcillary industry
2. Labour
3. Location
4. Reputation
26
4 Diseconomies of scale
Loss of control - business too big to control
Labour relations - workers become demotivated and feel insufficient when so many people are working there
Communication - bigger businesses make it harder to communicate
Bureaucracy - bigger businesses tend to have more rigid systems in place making it harder and more costly to get things done
27
why has quality grown in importance?
Because people have more disposable income and there are more suppliers
28
Who is quality identified in the eye of?
The consumers
29
Quality control?
The observation techniques and activities used to fulfill requirements for quality
30
Quality assurance?
The planned and systematic activities implemented in a quality system so that quality requirements for a product or service will be fulfilled
31
Internal measures of quality
Looking at increases of sales
Lifespan of product
Reject rate
32
Working out reject rate
Number rejected ➗ total number produced ✖️ 100
33
External measures of quality
```
BSI kitemark
IOS 9000
ABTA/ATOL
Woolmark
Hygiene stars
```
34
When does a company loose control of quality?
When it leaves the factory
35
How does a business try to maintain some control of quality?
Warranty
Servicing
Guarantees
36
What's the previous traditional method for checking quality?
Products checked at the end
37
Problems with the traditional method of checking quality?
Time wasting
Material waste
Higher costs
38
Benefits to the consumer of having the external measures of quality?
- guarantees replacement if things go wrong
- gives customers reassurance of high quality
- confidence in the company
39
What is customer service?
Quality assistance and advice provided before during and after the transaction process of a product or service has taken place
40
Why is customer service important?
Good customer service gives greater customer satisfaction. Ultimately leading to a better reputation, an increase in sales or repeat sales
41
What are the problems with poor customer service?
Can create a bad reputation for the business and perhaps a loss of sales due to having to make refunds or customers not returning. It can also create de motivation of staff.
42
3 types of stock?
1. Finished products
2. Raw materials
3. Work in progress
43
Things to think about when it comes to stock control
```
Cash flow
Costs
Liquidity
Competition
Waste
Storage
JIT
lead time
Sales/demand
The product
Production time
Over/under sticking
```
44
What is lead time?
Time it takes from order placed to when it's received
45
What to consider when purchasing commodities?
| Products in their raw state
```
Price
Quality
Nature of economy/market
Availability
How it's been produced
Alternatives
Lead time
Reputation
Quantity needed
```
46
What's overstocking?
Holding too much stock
47
What's understocking?
Holding too little stock
48
What's buffer stock?
Holding a minimum amount of stock
49
The problems with overstocking?
```
Waste
Damage
Storage costs
Security
Theft
Money tied up - opportunity costs
Monitoring and handling costs
```
50
What are the problems with understocking?
```
Loss of orders
Production delays
Loose ability to benefit from EOS
No flexibility
Could gain bad reputation
De motivating for staff
```
51
6 economies of scale
```
Purchasing
Technical
Risk bearing
Managerial
Financial
Marketing
```
52
Before making a decision a business would carry out what?
A SWOT ANALYSIS
Strengths
Weaknesses
(Internal)
Opportunities
Threats
(External)
53
Benefits of working at a high capacity?
- good efficiency
- greater service so more sales
- suggests a successful business
- better use of staff
- usually less waste
54
drawbacks of working at high capacity?
- less flexibility
- pressure on the workers can be de motivational
- mistakes more likely so increase of waste?
- no downtime for machines
55
What prevents a firm working at full capacity?
- nature of demand for a product
- competition
- working capital
- objectives
- workforce
56
Main features of lean production?
```
Total quality management
Jidoka
Kaizen
Quality circles
JIT
Kanban
Cell production
Ergonomics
Time based competition
```
57
Internal economies of scale
```
Managerial
Marketing
Technical
Purchasing
Risk bearing
Financial
```
58
Total quality management
Everyone involved
Each part of the process is looked at
Bench marks set
Teamwork
59
Issues faced when introducing TQM?
- change in routine leads to demotivation
- training required
- slower production, loss of sales
- new investment in tech needed
- may need a change in factory layout
60
Benefits of TQM?
- greater quality and reliability
- less waste
- everyone involved so motivation
- greater skilled staff
- teamwork
- more control
- faults are noticed straight away
61
Cost of overstocking - stock control graphing
JIT- just in time
Economic order quantity- ordering the most efficient amount
Fixed reorder level- recording at a certain level
Fixed reorder interval- where the amount may vary but the time they order is the same
Two bin system- once one bin emptied you use the other and full up the empty bin
