Operations managment Flashcards
(114 cards)
1
Q
How is added value made
A
business adds value to raw materials it uses when it makes a product
2
Q
What is calculation for added value
A
selling price- cost of purchasing raw materials
3
Q
How to increase added value
A
-purchase cheaper raw materials
-raise price
-achieve brand status as will sell more
-improve customer access
4
Q
Difference between added value and profit
A
profit is price sold for-all costs of production so will be lower as wages, fuel and insurance need accounted for
5
Q
What is job production
A
method to produce unique products made one at a time
6
Q
Benefits of job production
A
-production is flexible and adapted to customer needs
-high quality products
-employees highly skilled and interesting challenging jobs
7
Q
Drawbacks of job production
A
-goods can take a long time to make compared to mass
-prices will be alot higher as skilled workers will command higher payments for time and expertise
8
Q
Example of job production
A
wedding dress and tailer made suits
9
Q
What is batch production and an example
A
limited number of identical products, at each stage of production work will be completed for whole batch before next stage
bakerys is an example
10
Q
Benefits of batch production
A
-lower unit costs and higher ouptut than job production
-semi skilled employees
-aim at niche markets yet produce range of goods
-some economies of scale compared to job production
11
Q
Drawbacks of batch production
A
-time lost when machienes have to be resetfor new production
-not equipped for larger scale orders
-lower quality than job
12
Q
What is flow/mass production and an example
A
production of products on a product line a continuous process flowing from one stage to the next
13
Q
Benefits of mass production
A
-much faster than job/batch
-meet large orders
-lower labour costs as limited skills
-motivation difficulties
-large economies of scale gained
14
Q
Draw backs of mass production
A
-goods produced are identical so wont have wide product range
- production line/machines are highly expensive
15
Q
What is productivity
A
measurement of efficiency of which business turns inputs into output
16
Q
How to calculate labour and capital productivity
A
Labour- Output(per period)/number of employees(per period)
Capital- Output/capital employed
17
Q
The higher the productivity the higher the
A
efficiency production or sales generation
18
Q
How can productivity be improved
A
.tech
.lean production
.training
.workforce reorganisation
19
Q
Advantages of having high productivity
A
-increased eos
.increased competitiveness
-lower unit costs
-performance bonus to workers(motivated)
20
Q
What is full capacity
A
means all employed factors of production are being used to optimium levels of output producing maximum output to business current investment levels
21
Q
When would business operate at full capacity
A
when economy is booming and demand is buyont
22
Q
What us space capacity
A
the capacity that business could produce at full output- current output
23
Q
What does it mean it share capacity is significant
A
-overtime not available so limited bonuses and threat of redundencu so demotivated work force
-make workers redundant costs money and would need to reorganise increases costs
-reduced profits- limting capital for r and d reducing competitiveness
24
Q
Options to increase capacity utilisation
A
-subcontractoing production
-rationilisation
-increasing use of assets
25
What is subcontractong of production
someone else to produce goods for you reducing risk by reducing capital investment required as no machines bought or buying factory space
lack of quality control
limited number of sub contractors so goods prices can be high
delivery delays
26
What is rationalisation
disposing products or services not deemed as profitable allowing concentration on strengths
some customers lost who bought item
redundency costs
27
What is increasing the use of assets
may subcontract floor space or expand range into new or niche markets yet produce(mr and devlopment costs)
try to out ride this in expectation marjet will recover and demand will increase
28
Problems with working at full capavity
-lack of flex ability
-possible fall in quality
-pressure on staff
-machine break downs and failures
29
What is cad
computer aided design
30
What is cam
computor aided manufacturering
31
What can cad be used for
design new products or alter existing products such as cars, shipbuilding.
32
Pros of cad and cons
speeds up design process increasing competitiveness
efficiency as easy to alter design without going back to drawing board
marketing tool to show products before
idenify design problems before preventing need for expensive rework
relatively cheap x100 vs cam
skills to use cad are specialised
outsourcing
33
Uses of cam
robotic welders, cam packaging vegetables for supermarkets
34
Benefits and drawbacks of cam
faster production process comared to humans
precise and consistent quality leading to better rep
minimises waste due to less human error
initial costs can be very high
wages for the machinists
35
What could business do to use cam
outsource cam
36
What is computor modelling
used to model anything from wear and tear of shoes to electrical generation of wind turbine
37
Benefits of computor modelling
what if scenario to see risks and changes
so perfect products snd improve efficiency
38
What are uses of information tech
databases on customers improving customer relations
cash flow models improving financial efficiency
epos to manage stock
39
Benefits of IT
marketing info on purchase habits can allow targeted marketing
40
Benefits of using technology
Improved quality
Faster innovation less expensive to model snd test new products
More effective marketing and sales
Less dependence on labour reducing costs especially if workers had bargaining power to get higher wages
41
Drawbacks
-workers may feel like job is at risk so demotivated and look for otber jobs
42
What is lean production
waste is any process that does not give added value to product so aims to remove wasteful elements for production precess resulting in higher productivity and reduced costs
43
Examples of wasteful elements
-raw materials lying around
-finished product sitting in warehouse waiting to be delivered to customers
-skills and knowledge of workers not being usrd by management
-work in progress sitting in parts bins waiting to be usef
-overproduced of stock than is needed
44
How to get effective lean production
-good relationship with suppliers(jit)
-commited,skilled motivated employees
-trust between management and employees
-a culture of quality assurance
-a more modern,flexible people based structure
45
What is jit
a method of lean production aim to ensuring inputs into production process only arrive when they are needed
46
Objectives of jit
elimination of waste
improved productivity
47
Benefits of jit
-lower stock holding means reduction in storage space saving rent and insurance costs
-stock only arrives when needed so less working capital tied up in stock
-less likelihood of stock perishing, becoming obsolete or out of date
48
Drawbacks of jit
-need for complex specilest stock system
-no spare finished product to meet unexpected orders, all made into actual orders
-highly reliant on suppliers if they dont arrive on time whole production schuedle is delayed
49
What must mangers and suppliers do for jit to he incoorpersted
man-understand full production process from start to end
sup-strong effective communication with suppliers many use bar codes that are scanned and automatically orders stock at appropriate time
50
What must employees and customers involvement be
-trainded to use systems of lean production, job enrichment giving more employee control=motivation
-cust-order online so is delivered straight away not left in warehouse
51
What is kaizen
continuous improvement taking incremental steps to improve quality, design and waste reduction
52
What is the main working element of kaizen
use of kaizen groups who have commen stake in production process
meet regularly to discuss problems and suggest improvement that can be done with minimal costs leading to quality and levels of production increaseing
53
Other key elements of kaizen
-all employees from director to shop floor should always ask how they can improve
-a motivated workforce committed to business
-a trainded workforce-understand roles effectively
-effective communication systems-workers communicate easily to superiors and vice versa
-job security
54
What are the benefits of kaizen
-improved labour relations
-reduction in waste
-improved motivation
-improved productivity and quality
55
What is cell production
production line is divided into a number of cells with groups of workers involved in tasks
56
What does cell production involve
-workers trainded to carry out number of tasks in cell - job rotation
-skills means workers can improve quality and create flexibility in production process meet regularly
-possible for cells to be self managed
57
What is time based management
time regarded as key business resource meaning speed adds value
-speed of deliverys for examplr
58
What can be used for time based management
cad,cam,critical path analysis,simultaneous engineering
59
What is simultaneous engineering
mutliple stages of designing and developing product carried out at same time to get in on shelves faster
60
What is needed for simultaneous engineering
-effective communication between departments involved
-regular product development meetings
61
What is quality
the fitness for purpose of product or features of product or service that staisfy customers w
62
Benefits of quality
-able to differentiate product (usp) higher sales
-increase prices as willing to pay more for quality brand loyalty reducing prices sensivity making more inelastic
-reduced waste
63
How to improve quality
-purchasing right quantity and quality of raw mats
-marketing(market research into wants)
-operations(structureing snd managing production process)
64
What is tqm
total quality management is an operations management system that creates structures within organisation that satisfy internal and external customers and suppliers
65
What does T stand for
total-intergraiton of staff,suppliers,customers and other stakeholders all seen as part of single system
66
What does M stand for
management-need for management to improve processes and moniter them continuously in order to identify improvement
process owners can make changes to processes to improve them
67
What does Q stand for
quality can be speed of deliverys, consistency, innovation.
68
Name all methods used for tqm to be effective
-quality chains
-empowerment
-monitoring
-teamwork
-quality circles
-zero defects
-benchmarking
69
What is quality chain and empowerment and monitering
qc- process involve internal customers- next person in production line treated as customer to achieve customer satisfaction
empowerment-give workers control over tasks completed
monitoring-checking standards are being achieved and measuring levels of failure so they can be improved
70
How are teamwork, quality circles, zero defects and benchmarking used
-teamwork- cells of production and team approach
-quality circles- employee involvement in deciisions and product improvement
-zero defects-perfect product quality
-benchmarking- standards based on thebest of competitors
71
Benefits of tqm
defects less so less money lost increasing efficiency
enhance brand
add more value
72
Drawbacks if tqm
inital costs of implementing
staff may command higher pay
qualuty may not be critical to firm
73
What is quality assurance
quality is built in and checked throughout production process instead of at the end
74
Methods of quality assurance
-recognised standards
-benchmarking
-production control
-team working
-product design checking
75
Teamwork in assurance
check quality throughout process building trust, morale and communication with members
76
What is production contril
ensuring standards are set and professes designed meet these targets are used
77
What does production control involve
-monitoring costs through budgeting
-control of operations through critcal path analysis
-supervised output
-feedback methods, monitering customer satisfaction and feedback
78
What is quality control
system of maintaining standards in manufacturing by testing sample of output against expected standards at end of production process instead
79
4 difference between quality control and quality assurance
qc- indentifies defects qa-prevent defects
qc-fixes issue when it occurs qa-issue shouldnt occur
qc-is on final product qa-overall process
qc-check samples qa-use quality circles
80
Pros of control and cons
avoid defect reaching customer
cost of identification
other departments not motivated
81
Pros and cons of assurance
less defects less waste less cost
motivated increase productivity
time to implement
costs to implement training
resistence to change
82
What are purchasing departments
responsible for purchasing goods + services for business to operate
ensure recieved in time to avoud delays
procurring goods at competitive price while maintaining good relations with supplier
83
What is stock control
ensuring required quantity and and quality stock
ensuring smooth flow of goods from production to final customer
84
Key aspects of stock management
-ensure that stock is available for use within manufacturing process when needed
-part finished goods do not sit around unused and lose value sent to next stage asap
-finished goofs are available for timely delivery to customers and not made until customers found for them
85
What is the re order level
what level stock is at when stock is reordered
86
What is lead time
time from placing inventory order and to its arrival
87
What is reorder quantity
how much stock suppliers deliver
88
Ads and disads of keeping high stock
-allows to meet a change in demand
-as a contingency plan incase of late delivery's or stock damage to prevent production stopping
-benefit from eos of bulk buying
89
Ads of keeping low stock
-cost of storing stock
-have good liquidity less cash tied up in stock
-less likely to break, go off
90
Computorised stock control
improves efficiency and accuracy
reorders when below certain level duch as supermarkets when stock is scanned in
91
Advantages of stock management
-reduced working capital-improves liquidity and not tied up in stock so can be used elsewhere
-less storage space
-less stock wastage and discounting
-improves relations with customers gurentee on going orders
92
What is research and development
identifying new ideas and turning them into products,services and processes.
93
What is two main types of innovation
product- new or improved products or services
process- better or lore efficient ways of producing existing products or giving services
94
Benefits of process innovation
-reduced costs
-improved quality
-more responsive customer service
-good flexibility of operations
95
Benefits of product innovation
-charge higher prices
-first mover advantage building customer loyalty
-enhanced reputation as innovation
- greater percived added value
96
Key benefits of effective innobation
-improved productivity and reduced costs
-build a brand
-advantage over competitors
-higher sales more profit
97
What is research
enquiry into and discovery of new ideas
98
Methods if research
pure- research to find out how or why- usually unis or research institutes
labatory research- testing pharmacies
evulation-if exiting products
brainstorming-using descision groups
99
What is development
changes ideas from research into commercially viable product or process
100
What is the steps in product development
identify problem
research
development of ideas to solve problem
development of prorotypes
final design
testing
manufacturing and launch
101
Advantages of r and d
-reduction in costs
-reputation increase
-launch new products for competitive advantage
-working environment improved safer and cleaner
102
What company is r and d essential to
aircraft, electronics companies
103
What is economies of scale
reduction in average costs of production that occur as business increases scale of production
104
Calculate cost per unit
total production costs in period/total output in period
105
What are internal economies of scale
reduction in average cost per unit of output due to increase of internal efficiencies of business
106
5 types of internal eos
-purchasing
-managerial
-financial
-marketing
-technical
107
What is purchasing, managerial and financial eos
purchasing in greater quantities resulting in lower unit costs
financial as larger firms benefit from access to cheaper finance
managerial-employing specialist staff to raise efficiency reducing average costs of production
108
What is marketing and technical eos
technical containerization in shipping an freight
marketing-as grows each pound spent on advertising has greater effect as tv advert for firm with 10 stores has less affect than firm with 20
109
Whats an external eos
reduction in unit costs who benefit from expansion of industry
110
Examples of external
supplier- network of suppliers attracted to area where industry is growing- reduces buying costs allows use of jit
educational-training schemes in colleges reducing recruitment costsand training costs of business
financial- financial services can improve for a patient industry such as where cash flows an issue debt factoring may be made available
111
What are diseconomies of scale
factors causing rise in costs per unit of output as scale of organisation grows
112
Internak diseos
coordination- larger organisation is more difficult to coordinate as alot of delegation leading to management going in own direction so to counter many management meetings held
motivation- harder to satisfy and motivate as feel ignored and distant from decision making
communication issues- hierarchy will increase with size so more misunderstanding snd ineffiency as firm grows increasing average costs allows use
113
External diseos
overcrowding industrial area- traffic congestion occurs leading to late staff and late deliverys and local residents may hate it
increased prices of resources- more businesses in area increases demand for labour, land, services and materials so all increase in price
114
How do small businesses survive as rhey cannot benefit from eos
-provide service difficult to scale up
-customer loyalty
-niche markets
-population density
-target market size
-avoid diseconomies of scale
