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Topic 3-Business Operations Flashcards

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1
Q

Define production

A

The action of making or manufacturing from
components or raw materials

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2
Q

What is job production

A

Job production is where
one single product is
made at a time
• Products are made for a
specific client or customer

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3
Q

Features of job production

A

goods are made by
skilled craftspeople who will be well motivated

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4
Q

Advantages of Job productiom

A

Bespoke, unique, one off, to customers
measurements or specifications e.g. a kitchen
• Very motivated workers who can see one
item made from start to finish
• Motivated workers are normally more
productive and have lower rates of
absenteeism
• Higher prices can be charged to the
customers

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5
Q

Disadvantages of job productiom

A

Skilled labour and
craftsmen are
expensive
• Wide range of tools
may be required
• Hard to speed up if
demand increases

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6
Q

What is flow production

A

Flow production uses
production lines with
continuous movements of
items through the process
• Many mass produced
products are made this
way such as; cola, cars
and toothpaste

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7
Q

Advantages of flow production

A

A business can make larger quantities which
means they can bulk buy raw materials and save
money (economies of scale)
• Automated and computerised production means
improved quality and more complex designs can
be made in shorter times
• As production is continuous stocks of parts and
raw materials don’t need to be held this means a
business can use the JIT (just-in-time) system

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8
Q

Disadvantages of flow production

A

High costs to buy the factory and machinery
• Low motivation of staff due to repetitive tasks
• Break downs and lost production can be costly
• Very inflexible, hard to change the factory
machinery to make different products, the
production process will be set up to make just
one item e.g. bottled cola

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9
Q

What is lean production

A

Lean production uses JIT or just-in-time delivery
- the aim is that stock arrives at the factory just
as it is needed.Uses as few resources possible.

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10
Q

The 7 wastes

A

Transport,motion,inventory,waiting,over-proccesing,over production,defects

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11
Q

What is just-in-time delivery

A

Just-in-time means that a business does not
keep stocks of parts in a warehouse
• Instead they order the parts and get them
delivered same day from the supplier

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12
Q

Warehouse full of parts=?

A

Just-in-case

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13
Q

Parts arrive just when needed =?

A

just-in- time

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14
Q

Advantages of Just-in-time

A

As parts are ordered as
they are needed there is
no wastage
2) Parts are not warehoused
which is a massive cost
saving in terms of
premises and staff
3) Stock is less likely to go out
of date
4) The business will improve
their cash flow, as their
money is not tied up in
stock

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15
Q

Disadvantages of Just-in-time

A

The business won’t be
able to meet
unpredicted surges in
demand
2. The business won’t be
able to quickly replace
damaged parts
3. If the delivery does not
turn up in time this can
stop the whole
production line, which is
costly

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16
Q

Define procurement

A

Procurement is the process by which businesses
buy raw materials, component, products,
services, and other resources from suppliers
to produce their own products and services.

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17
Q

Benefits of reduced costs by using Jit for stock control

A

Less stock held
• No warehouse costs

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18
Q

Drawbacks of cost of
using JIT stock control:

A

making more frequent
purchases
• Buying in smaller
quantities means no
economies of scale

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19
Q

What is direct procurement

A

Buying raw materials that
are used in the making of
the product, or delivery
of the service.
Eg:window washing company buying soap and sponges.

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20
Q

What is indirect procurement

A

Buying maintenance
contacts, admin
stationary, marketing
advert space, ICT and
other support items.
Eg:window washing
company may need paper
to print their invoices on

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21
Q

List the 6 factors when choosing suppliers

A
  1. Quality and reliability
  2. Speed and flexibility
  3. Good service
  4. Value for money
  5. Communication
  6. Financial security
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22
Q

Choosing suppliers - quality and
reliability

A

The quality of the
business supplies needs
to be consistent - the
customers associate poor
quality with the business
and not their suppliers

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23
Q

Choosing suppliers - speed and
flexibility

A

Flexible suppliers help a
business to respond
quickly to changing
customer demands and
sudden problems

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24
Q

Choosing suppliers – Good service

A

The business will need
the suppliers to deliver on
time, or to give them
plenty of warning if they
can’t

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25
Choosing suppliers - value for money
The lowest price is not always the best value for money • Reliability and quality from suppliers the business will have to decide how much they willing to pay for the supplies • The business will want the suppliers to strike a balance between cost, reliability, quality and service
26
Choosing suppliers - communication
The best suppliers will want to talk with the business regularly to find out what needs they have now and how they can serve them better in the future
27
Choosing suppliers - financial security
The business will need to make sure their suppliers have sufficiently strong cash flow to deliver what is wanted, when its needed
28
Relationships with suppliers: quality
A business will want its suppliers to sell them the best possible quality products for the price
29
Relationships with suppliers: delivery
Some businesses may wish to enter into a JIT agreement with a supplier • This may involve a number of deliveries being made a day • If a delivery is late this may stop production and could cost the business money
30
Relationships with suppliers: availability
Once the business has an agreement with a supplier to deliver quality stock on time – there will be problems if the stock is not available • This may stop production entirely
31
Relationships with suppliers: cost
Once a supply deal has been made, both sides will want the deal to last a long time to reduce the costs of having to find other suppliers or customers or renegotiate another deal
32
Relationships with suppliers: trust
Trust is important when creating a supplier relationship • The best relationships work well when there is joint problem solving and open communication between the businesses • Trust can be built through: – Reliable deliveries – Quality products or services
33
Define logistics
Logistics is the activity of transporting goods to customers
34
What can logistics include
Transportation,packaging,inventory,security
35
Define a supply chain
A supply chain is all the businesses which provide parts of the product until it gets to the consumer
36
The impact of logistical and supply decisions - Time
Suppliers need to make sure the goods or services ordered arrive / are completed on time • There may be cost penalties if they are late
37
The impact of logistical and supply decisions - Length of supply chain
The longer the supply chain – the more intermediaries – the more businesses that must be paid • A short supply chain is easier to manage and will cost less – these savings can be passed down to the consumer as lower prices
38
The impact of logistical and supply decisions - Customer services
Good customer service will mean repeat business • It is cheaper to keep an existing customer than to gain a new one
39
Define quality
In manufacturing, a measure of excellence or a state of being free from defects, deficiencies and significant variations
40
Define TQM
TQM (Total Quality Management) is a management approach to long term success through customer satisfaction
41
What is TQM
TQM is a management approach change in business culture that puts quality at the heart of everything in the business • In essence its getting it right first time every time
42
Features of TQM
Quality circles, where small groups of workers meet to solve work problems
43
TQM means Zero defects:
The business will make every effort to ensure that every product is made free from defects ✓ the quality is added in every process ✓ This means inspectors are not needed as there are no defects
44
TQM – internal customers
TQM means an internal customer concept: • For example; the robot that sprays cars has broken, the maintenance worker who has to fix it responds to the manager of the paint shop as a customer
45
TQM – lean approach
TQM is a lean approach: – Continuous improvement (kaizen) – Empowerment, employees are made accountable and can make decisions about the process they are working on
46
Advantages of TQM
Not paying for inspectors means lower costs – Empowered employees are motivated and therefore more productive – Improved quality means more satisfied customers – Enhanced reputation means repeat business – Builds good partnerships with suppliers which means lower costs and higher quality – More profit means happy shareholders
47
Disadvantages of TQM
Takes time to introduce, it demands time, planning and resources which is expensive – Some staff resistant to change in culture – Will cost to train staff, might be too expensive for some small businesses who cannot bear the cost – Employees may not welcome extra responsibility – Not a quick-fix solution 2/3 of businesses don’t feel the benefit of the new systems for years*
48
Benefit of quality – additional sales
A good product won’t sell if no one knows about it. • But an inferior product won’t sell (at least not for very long) even if everyone knows about it. • The news of a quality product will spread by word of mount and sales will rise
49
Benefit of quality – enhanced reputation
A good reputation will ensure repeat business • On a larger scale – UK products are perceived as good quality and we have a reputation for excellent production of the goods we export
50
Costs of quality - staff training
Employees need to be trained in TQM or quality, which will reduce the costs of; – Internal failure where costs can include the cost of scrapped material and rework and repair – External failure where costs can include product recalls, customer complaint handling and loss of reputation
51
Costs of quality – product recalls
Product recalls are made by traders about products that have problems which could affect the safety of the consumer. • The product should not be used and should be returned to the trader.
52
Costs of quality – the provision of services
To provide a quality service a business will have costs; – To establish standards of service to start with and then train all the employees to work to these standards
53
Outsourcing examples-Explain production
Some motor manufacturers now outsource not only parts but complete assemblies – steering, transmissions, engines, interior assemblies.
54
Outsourcing examples-Payroll
is the most common task that companies outsource. Services include weekly/monthly/quarterly payroll and normally attending to the completion of the (many) Government returns
55
Outsourcing examples-Purchasing and maintaining information systems
hiring and evaluating IT staff and training users can all be very difficult. By outsourcing the information systems function, the business can obtain the latest technology and suitably skilled personnel
56
Outsourcing examples-Delivery
Larger businesses might prefer to contract a major delivery firm rather than maintain their own fleet. Either way, the business can hire the expertise to keep delivery problems and decisions off their desk
57
Problems with outsourcing
quality can suffer this can lead to; angry customers, a fall in repeat business and a reputation for low quality
58
Define a franchise
A franchise is where a small business owner buys the rights to sell the goods and services of a large, well- established company
59
What is a franchisee
this is the small business owner who is buying the rights.
60
What is a franchisor
this is the large business who are selling the rights e.g. Subway
61
Quality issue - franchising
They can only control the quality up to a point, they can send out the products and give the signage but the customer service is down to the individual franchisee • Franchisees don’t uphold the quality standards
62
What is customer service
The assistance and advice provided by a company to those people who buy or use its products or services
63
When does customer service act
Before the sale – a customer may wish to get some advice, particularly if they are spending lots of money or it’s a complex item • At the time of the sale – a customer may want gift wrapping or easy payment terms – see website • After the sale – a customer may need to call the helpline if the product doesn’t work or if they need further advice
64
Methods of good service-product knowledge
Good product knowledge will build confidence and trust with the customer • It will also help the customer find the product that best meets their needs
65
What is customer engagement
Customer engagement means creating a positive experience for the customer
66
What are post sale services
Post sales services, mean services that are carried out by the business AFTER the buyer has paid for the goods
67
What does post sale services include
• A policy for customers returning goods • A repair service • A maintenance service • Spare parts available • A policy for dealing with, and investigating, customer complaints • An advice service for customers with technical problems
68
BENEFITS OF GOOD CUSTOMER SERVICE-Customer service
Good customer service will mean satisfied customers • Satisfied customers come back to the business and buy again and again
69
BENEFITS OF GOOD CUSTOMER SERVICE-Customer loyalty
When a customer is happy with the level of service they will stick with the brand and not shift to competitors
70
BENEFITS OF GOOD CUSTOMER SERVICE-Increased spend
One of the easiest ways to increase revenue in a business is to sell more to the existing customers • Cross selling and up-selling only works if the goods are relevant to the customer
71
BENEFITS OF GOOD CUSTOMER SERVICE-Profitablity
How customer service impacts profits; • Word of mouth; social networks are a powerful source of sharing information, positive or negative about the business • Repeat business, retaining customers will make sure they make a contribution to revenue and profit • Increased spend, in some businesses the top 25% of customers account for the majority of the profits, encourage these customers to spend more and the business will be more profitable
72
DANGERS OF POOR CUSTOMER SERVICE-Dissatisfied customers
Unhappy customers now have more channels than ever to complain to e.g. twitter, Facebook etc.
73
DANGERS OF POOR CUSTOMER SERVICE-Poor reputation
If they provide poor customer service and a poor service in general reviews may be put online which gives them a reputation of having a bad service limiting new customers
74
DANGERS OF POOR CUSTOMER SERVICE-Reduction in revenue
It costs 6 – 7 times more to acquire a new customer than retain an existing one* • If customers are having problems or unhappy with the customer service they will not return • Less repeat business means lower sales • Lower sales means lower revenue for the business
75
What are websites used for in a business
Live chats so customers can speak in real time to customer support,automated sale process,contact info,faq pages
76
Advantages of social media
Customers increasingly look to engage with businesses or brands online in multiple ways, social media can be an easy and cheap way to do this • Compelling and relevant content will grab the attention of potential customers and increase brand visibility • A business can deliver improved customer service and respond quickly to complaints and feedback
77
Disadvantages of social media
A business will need to commit resources to managing their social media presence, responding to feedback and producing new content • It can be difficult to measure the return on investment and the value of one channel over another • Ineffective use - for example, using the network to push for sales without engaging with customers, or failing to respond to negative feedback - may damage the business reputation
78
How to check for quality
Stage 1-Check raw materials from suppliers Stage 2-Random samples taken to check quality of work in progress Stage 3-Random samples taken of finished products-items removed if they dont meet required quality
79
Describe lean production
a production strategy that aims to use as few resources and produce the least amount of waste possible

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