Operations - higher business A

What is the role of operations?

The Operations Department is responsible for converting resources into goods and services.

The department are involved in making many important decisions.

Access to raw materials, machines and workers does not guarantee that a business will obtain the outcomes that they require. This means that organisation is essential.

Procedures must be established which control and direct what is done, whom it is done by, and when.

This is known as the operating system.

What decisions are made by the operations department? (4)

Systems -

Purchasing -

Quality -

Stock control -

What are the three stages of the production process?

1. Input - Raw Materials + Labour

2. Process - Using raw materials to produce final good/service.

3. Output - The finished good or service for sale.

What is inventory?

Inventory is commonly known as 'Stock'

Inventory refers to:

• Raw Materials - bought from suppliers and stored until required for production.

• Work in Progress - partially manufactured products.

• Finished Products - Stored until an order is received or made to order.

Inventory has to be managed to ensure that there is sufficient amount to allow for production and sales to take place.

What is inventory management?

Inventory Management is concerned with the sourcing and storage of raw materials (for secondary sector businesses) or supplies of finished goods for resale (for tertiary sector businesses).

Businesses need to control and manage stock levels to ensure that the correct quantity is always available to keep production going.

It is all about getting the balance right - not too much (overstocking) or too little (understocking).

What is inventory storage?

Businesses need to decide on the best way to store inventory to make it:

• Easily Accessible

• Cost Effective

• Well Maintained

What 6 things should businesses consider when storing goods/stock?

When storing goods, organisations should consider:

• Possible sales levels

• Production capability

• Working practices and health and safety

• Available storage

• Maintaining quality

• How inventory movement will be recorded

What are the impacts of overstocking? (7)

Having too much inventory can result in:

• High storage, maintenance, security and insurance costs

• Lighting and handling costs

• Space being taken up

• Money being tied up - could be used elsewhere more profitably

• Inventory left unsold

• Theft by employees

• Supplies going out of date

What are the impacts of under stocking? (4)

Having too little inventory can result in:

• Organisations being unable to cope with unexpected changes in demand

• Production having to stop if they run out of inventory

• Increased ordering/admin/delivery costs as they have to place more orders if they hold low inventory

• Not benefiting from bulk buying discounts

What is the purpose of an inventory control system? (4)

The purpose of an inventory control system is to:

• Anticipate running out of inventory before it happens (ensures production line can always run and customer orders aren't delayed).

• Avoids high storage and maintenance costs as shouldn't be overstocked.

• Less money is tied up in inventory which could be used more profitably elsewhere in the business.

• Minimises the chance of inventory deteriorating/becoming obsolete.

Inventory management diagram labels

- Maximum inventory (stock) level - The amount of inventory we can reasonably store in our factory, appropriate to our needs.

- Minimum inventory (stock) level - The least amount of inventory that should be held.

- Reorder level - The point at which new inventory should be ordered. Computerised inventory systems link EPOS and automatically reorder goods.

- Reorder Quantity - The amount that is ordered to take the inventory back up to maximum level.

- Lead Time - The time taken between ordering new inventory and its arrival.

- Buffer Inventory - A limited amount of reserve stock to be used in the event of emergency or supplier delays.

What three things would a business consider before setting the inventory level?

Businesses need to decide what level of stock they need.

•The maximum inventory level a business can hold depends on the storage capacity available, demand for their product and finance available

•The minimum inventory level depends on the relationship with suppliers - can the business rely on the supplier to deliver last minute?

•The reorder level depends on the lead time

What is just in time (JIT)

JIT is the process of ordering supplies only when they are required for production or when an order has been placed by a customer.

It only allows for sufficient inventory to be held to meet immediate production needs. Inventory arrives "just in time" to be used in production.

This system does not suit all manufacturers.

Advantages of just in time (JIT) (4)

- Funds are not tied up in inventory, which means money can be used elsewhere in the business.

- Less storage space required, reducing costs.

- Reduced wastage as less risk of stock going out of date or out of fashion.

- More responsive to changing external factors.

Disadvantages of just in time (JIT) (5)

- Delay in receiving orders from suppliers will lead to production having to stop.

- Harder to cope with unexpected changes in demand, resulting in loss of sales.

- Requires excellent relationships with suppliers, which can take time to develop.

- May lose discounts as making small orders as opposed to bulk buying.

- Stock being delivered frequently increases administration and delivery costs.

Explain the advantages of using just in time (JIT) (4)

-

Explain the disadvantages of using just in time (JIT) (4)

What would a business consider before choosing a supplier to purchase inventory from? (6)

When purchasing inventory, there are many factors that a business must consider when choosing a supplier to purchase from:

• High Quality

• Lowest Price

• Delivered in Correct Quantities

• Delivered at the Correct Time

• Avoiding Wastage

• Building good relationships with Suppliers.

What is logistical management?

The process of dealing with an entire order from start to finish.

Logistics managers are responsible for the following;

• Inventory - liaising with suppliers for raw materials to use during production (supply chain).

• Storage & Warehousing - Ensuring inventory is stored correctly (cooled/dry etc) & sending raw materials to production areas when needed.

• Order Processing - Dealing with orders from customers to ensure they receive the correct products.

• Distribution - deciding on the best method to use to ensure the product gets to the customer.

What is inventory storage?

Businesses often store inventory in warehouses.

Warehouses are facilities bought or rented by the company that are used to store and distribute inventory.

They need to be secure to prevent theft or damaged stock.

What is centralised storage/warehousing?

Centralised Storage is when a company chooses one central location to store all the stock for the organisation. The stock will be distributed to departments as required from the central warehouse.

Centralised storage advantages (6)

- Inventory is more easily controlled and monitored.

- Theft is less likely.

- Clear procedures are in place for distribution.

- Specialist staff are employed to maintain the inventory which can speed up handling and security.

- It may be cheaper to store inventory in one large area.

- Easier for suppliers to deliver to one centralised storage area.

Centralised storage disadvantages (6)

- It can be expensive as specialist staff are employed.

- Large warehouses are expensive to operate.

- Inventory has to be delivered to each division or department, causing delays.

- Specialist equipment needs to be purchased and maintained.

- Inventory usage levels and needs are unclear as divisions need to communicate with the warehouse..

- The use of central warehouses has declined due to more efficient inventory management systems.

What is decentralised storage?

Decentralised Storage is when each department within the organisation is responsible for ordering and storing their own stock. Stock is stored where it is needed, in many locations such as smaller warehouses or store rooms.

Decentralised storage advantages (5)

- Less likely to overstock.

- Smaller warehouses are more responsive to local needs.

- Inventory reorders reflect the actual pattern of inventory usage/sales which can help forward planning.

- Inventory is replenished more frequently in small storage areas meaning there is less chance of deterioration.

- Each Department has ready access to inventory which can save time.

Decentralised storage disadvantages (5)

- There is less control and supervision of inventory which could increase theft or wastage.

- Decentralised inventory takes up more space as there are several sites.

- Not as able to take advantage of economies of scale by bulk buying.

- Run the risk of understocking.

- Each division may handle stock differently, leading to difficulty for senior managers in pinpointing problem areas.

Distinguish between centralised and decentralised storage

[Centralised inventory storage is when stock is held in one central location in a large purpose-built warehouse whereas decentralised inventory is stored in many locations in smaller warehouses or store rooms.]

[Centralised inventory storage involved stock being distributed to departments as required whereas decentralised is when each department is in charge of ordering and storing their own stock.]

What is computerised inventory control?

Most inventory systems are now computerised, this technology means that business' can manage purchasing, shipping, receiving, warehousing, and returns into a single system.

Computerised inventory control advantages (4)

- Databases keep balances of inventory which are automatically updated.

- Can be linked to tills through EPOS, which update inventory levels with each sale.

- Accurate and constant monitoring of inventory levels allows for automatic reordering..

- Allows for decisions on slow moving stock or best sellers to be made by managers from their computers.

Computerised inventory control disadvantages (3)

- Computerised systems will cost a lot of money to install and maintain.

- Money and time need to be invested to train staff to operate the system efficiently.

- Crashes and breakdowns can hold up re-orders and production.

What are the 7 roles of the logistics manager?

• Planning the inventory required using production and sales budgets.

• Organising the resources needed for logistics including warehousing equipment and staff.

• Commanding warehouse staff to carry out tasks.

• Co-ordinating the supply chain, channels and methods of

distribution so deliveries can be made on time.

• Controlling the quality, quantity, cost and efficiency of the movement and storage of inventory.

• Delegating inventory procedures to decentralised warehouses.

• Motivating other members of their team.

What is logistical management?

Logistical Managers must also be aware of:

Channels of Distribution

Must organise the most effective channel of distribution (e.g. manufacturer -> retailer -> customer)

External Factors

Environmental pressure to reduce carbon footprint.

Legislation which stipulates the length of time lorry drivers can drive without a break.

Finance

What budget is available to a business for storage and delivery of inventory? This will impact decision making.

What are the 6 distribution methods?

The Logistics Manager must coordinate and decide on the best way to transport goods:

- Road - Quick, efficient and cost-effective. Door-to-door delivery, 24 hours a day.

- Rail - More environmentally friendly than road transport. However, cannot deliver door-to-door

- Air - Not very common as very expensive. Cannot be transported door-to-door. Quick to transport goods overseas.

- Sea - Good for transporting large/bulky products. Takes a long time to deliver.

- Pipeline - Efficient way to transport liquid or gas resources over long distances

- Downloads - More modern method of accessing media such as film and music.

What is labour intensive production?

Labour-intensive production involves humans doing most of the work. Businesses rely on their workforce more than machinery.

What are the advantages of using labour intensive production? (4)

- Labour can be less expensive than capital-intensive production.

- Humans can use initiative and creativity, something that is often lacking in automated systems.

- There's a constant supply of labour, often skilled labour, available in areas of the country with manufacturing traditions.

- Employees are motivated as they are not 'giving up' tasks to machines.

What are the disadvantages of using labour intensive production? (4)

- The business is at high risk of human error, resulting in waste, faulty products and disgruntled customers.

- Humans have to take breaks, holidays, etc., which limits production time.

- Humans have to be paid overtime for working over normal hours, whereas machines cost the same at any time of day.

- Recruitment, training and wage costs need to be considered.

What is capital intensive production?

Capital-intensive production involves producing products primarily by means of machinery and equipment.

Capital-intensive production can utilise either automation or mechanisation.

What is automation?

The process of making the product is fully automatic. This means that Computer Aided Manufacturing (CAM) is used to control fully automated assembly lines.

What are the advantages of using automation? (5)

- CAM/Robotics produce products in exactly the same way every time, improving consistency.

- CAM doesn't lose concentration so fewer mistakes are made, which limits waste.

- Robotics can do jobs that are dangerous for humans to do.

- Robotics don't take breaks, holidays or sick leave so can work 24/7.

- Fewer employees are needed as automation doesn't require human control, reducing wage costs.

What are the disadvantages of using automation? (4)

- Huge investment is needed to automate a production line.

- Breakdowns can be catastrophic, losing hours of production time and wasting vast amounts of materials.

- Replacing labour with automated robotics will demotivate retained employees.

- Absence of a 'human touch' often leads to lack of creativity and personality in the products produced.

What is mechanisation?

Mechanisation refers to labour and machines working together to produce products. A traditional example is a machinist operating a sewing machine in a textile factory.

Mechanisation advantages (3)

- Using machinery improves accuracy over purely handmade products as human error is lessened.

- Using machinery can speed up production.

- Unlike automation, a human element exists in mechanisation, improving creativity.

Mechanisation disadvantages (3)

- The machines and equipment can't be used without humans, so are liable to some human error.

- Production can't be 24/7 as humans require breaks, holidays, and so on.

- If machinery breaks down the business has to repair it, leaving workers idle.

What factors should a business consider before choosing a production method? (7)

• The actual product being made.

• The size of the business.

• The quantity required - high demand will require capital intensive/mass production to create large volumes.

• Quality requirements - high quality may require labour intensive production or robotics to ensure standards.

• The skills of the workforce - where low-skilled labour is employed, a mechanised process may prove more effective.

• The size of the firm and its market.

• Available technology and finance - capital intensive production can be very expensive to set up.

What is a quality product? (7)

A customer often views a good quality product as something that:

- Uses high quality materials

- Has a high standard of workmanship

- Works perfectly

- Is reliable

- Is to the specification stated on the packaging

- Good after sales service

- Ensures customer satisfaction

What is the importance of quality for customers?

It is important to ensure high quality for customers as this is how business' can attract and retain customers to their business rather than competitors.

As well as good quality, customers want value for money. Customers will look for this through:

- The physical appearance of the product compared to competitors.

- Durability and reliability of the product

- The after-sales service

- An organisation's reputation

What is the importance of quality to an organisation? (7)

Organisations need to provide goods and services with a high level of quality or risk failure/expense in putting things right.

High quality products can:

- Enhance an organisation's reputation

- Can be a legal requirement

- Keeps an organisation competitive

- Increases customer loyalty

- Lowers the risk of returns, reducing costs

- Decreases complaints

- Reduces waste

What are the methods of ensuring quality? (8)

Quality is one way of ensuring businesses attract and retain happy, loyal customers, which allows them to build up an excellent reputation.

Each organisation will use a different method to ensure their product/service is of high quality, this can include:

- Quality Assurance

- Quality Control

- Quality Management

- Benchmarking

- Quality Circles

- Mystery Shopper

- Staff Training

- Quality Inputs

What is quality control?

Quality Control involves checking a sample of raw materials at the start of production and then the final product with faulty products either being scrapped or reworked.

What are the advantages of quality control? (4)

- Reduces chance of poor quality products reaching customers.

- Only some employees need to be trained as inspectors to look for faults.

- Systems can be improved based on feedback and suggestions from staff.

- Employees will feel empowered and motivated, leading to improved employee relations.

What are the disadvantages of quality control? (2)

- Sampling does not ensure that ALL products are suitable quality, this can lead to a high number of complaints/returns.

- There can be high levels of wastage as whole batches may need to be discarded this can lead to an increase in the cost of production.

What quality assurance?

Quality Assurance is built into the production process, all staff check all items at all stages of production.

Quality assurance advantage

- Mistakes are identified quickly which reduces waste, saving the company money.

Quality assurance disadvantages (3)

- Costly due to the regular checks required during production.

- Productivity can be low due to constant checks.

- Can be an expensive system due to cost of employing staff to carry out checks and delays in production.

What are quality circles?

Quality Circles is when small groups of workers from different levels within the firm come together to discuss how improvements can be made in the production process.

Quality circles advantages (2)

- Employees feel valued as their opinion is being heard, increasing morale.

- It allows the workers who are actually doing the job to make suggestions which are then put forward for approval.

Quality circles disadvantages (2)

- Production is interrupted by these meetings.

- Can be difficult to allocate time for this that won't disrupt operations.

What is benchmarking?

• Copying the best techniques and applying them throughout the production process. This 'best' technique may come from a competitor.

• Uses a standard set by an established quality leader to discover the best methods of production

• This best method then becomes the quality standard which the organisation can follow

Benchmarking Advantages (3)

- Identifies best practice in the market which will improve performance if these methods

are adopted by the organisation.

- Can provide a goal for employees which will increase motivation..

- Can make the organisation more competitive.

Benchmarking Disadvantages (3)

- May be difficult to gather required information from competitors.

- Can be time consuming to study techniques used by other companies.

- Internal factors such as lack of finance may prevent the adoption of competitors' practice.

What is a mystery shopper?

Outside specialists who are trained to measure how well a business performs in its treatment of customers.

Used to ensure that managers and staff are focused on the key issues of customer care.

They can focus on employee performance, customer service or both.

In employee performance they will look at;

• Did all staff comply with legal requirements

• Were staff honest

• Whether staff followed company standards and policies

• How did the business compare with the best in that industry

• What training needs were identified

Mystery shopper advantages (3)

- An accurate representation is gained as MS is disguised as customer.

- It should allow feedback to be impartial as it is coming from an external perspective.

- The business will be able to utilise feedback to make improvements to its procedures.

Mystery shopper disadvantages (3)

- Only see a limited example of customer service based on their own experience, not always reflective.

- Staff may feel threatened by the use of mystery shoppers, which could lead to a negative impact on service.

- Can be costly to use mystery shoppers.

What is quality management (TQM)

Quality management is the continual improvement of process and systems.

It aims to have zero defects reaching the customer, it involves everyone in the business working towards the goal of 100% customer satisfaction.

Quality management believes in getting it right first time everytime.

Everyone in the company is responsible for quality. Every stage of the assembly line or production process must involve the recipient of the unfinished product challenging and inspecting what has been created.

Quality Management relies on:

- Quality inputs

- Highly trained staff

- Zero error tolerance

- A strong focus on the customer

Advantages of quality management (2)

- Motivated staff should ensure a high quality product.

- Using up to date machinery will help standardise product quality.

Disadvantages of quality management (2)

- It may mean higher purchasing costs for raw materials.

- It can result in high training costs.

What are quality standards?

Quality standards are set by the industry or government and can be awarded to organisations whose products meet certain standards or criterias.

Examples can include:

- CE Mark

- BSI Kitemark

- Trade Logos (Fairtrade, Recycling Logos)

What is a CE mark?

The CE Mark shows that a product meets European Union safety, health or environmental standards and that it complies with EU legislation.

This mark proves that the product meets the requirements needed to sell within the European Market.

This mark is commonly used on technological products.

What is the BSI Kitemark?

The Kitemark is a UK-based quality trade mark operated by British Standards Institution. BSI check and test products to ensure they meet minimum standards of safety and quality.

This trademark is commonly used on products such as doors, windows, BBQ's and fire extinguishers.

What are trade logos?

A trade logo is an identifiable sign which shows that a product or service conforms to certain standards or identifies them in a specific category:

- Fairtrade Logo

- Recycling Logo

- Keep Britain Tidy Logo

Achieving a quality standard can be expensive and time-consuming as there are strict sets of criteria that must be adhered to.

Trade logos (continued)

- These standards always need to be maintained or the quality standard will be removed from the business, this may generate bad publicity.

- Businesses that achieve recognised quality standards often gain a competitive advantage over other businesses.

- Customers perceive the products provided by these companies as superior, this may lead to customer loyalty and the ability to charge higher prices.

What are 3 examples of trade logos?

- The Fairtrade logo shows that an organisation has met the Fairtrade standards of a fairer deal for workers in developing countries.

- The widely recycled logo is used and applied to packaging that is 'widely recycled' meaning that at least 75% of local authorities will accept in their recycling services.

- The tidy man symbol provides the reminder not to litter.

What is corporate social responsibility? (CSR)

Operations, along with the Marketing department, need to consider how their activities impact on ethics and the environment.

Being socially responsible is about behaving in a way that does not harm people (ethical) or the environment (environmentally-friendly).

By ensuring they do this, they can meet their organisational objectives of Corporate Social Responsibility (CSR).

What is ethical behaviour?

Businesses can choose to work in a way that profits only the owners or in ways that benefit the community.

Working ethically means acting in ways that are both fair and honest. Ethical firms also carefully consider the implications of what they are doing and the effect it might have on the community and the environment.

Managers making ethical decisions take into account: Impact - who does the decision affect or harm?

Fairness - will the decision be considered fair by those affected?

Ethical behaviour

Many owners believe that acting ethically increases costs and reduces profits. This leads to many trying to cut costs by utilising unfair practice, such as hiring child labour at very low wages in developing countries. Although this is not seen as illegal practice due to different laws in countries, this is frowned upon by others.

Business activities that meet the requirements of the law, but are considered unfair by stakeholders can result in bad publicity.

What are ethical and environmental considerations?

Organisations need to consider ethical and environmental factors for a number of different reasons:

- Many consumers nowadays will not buy a product which has been made in a way that is unfair to staff or which misuses/damages the Earth's resources.

- By promoting a more ethical and environmentally friendly practice, businesses can share this information in a written policy which can be shared with consumers, this could lead to an increase in brand recognition/sales.

What is an ethical business?

Businesses that have built and ethical brand image believe that:

Customers are prepared to pay more for products that consider the environment and pay a reasonable wage.

They believe that higher sales compensate for higher costs, which attracts the business to ensure they are promoting ethical practice.

An example of an Ethical Business could be the Fairtrade Foundation.

What does ethical operations include?

- Staff Treatment

- FairTrade

- Choosing Raw Materials

- Paying Living Wages

- Not Testing on Animals

- Production Processes

Benefits of ethical operations (3)

- Awards can be granted for being ethical, which can boost reputation.

- Businesses who are ethical are highly regarded, this can attract customers and staff.

- Attracts investors.

Costs of ethical operations (3)

- Audits are required to ensure standards are met, which can be time consuming.

- Decision-making can become more complex and time consuming as can only go with ethical options.

- Higher costs involved (e.g. using fairtrade, paying living wage instead of using child labour).

What is staff treatment?

Businesses will usually want to make sure that they treat their employees fairly in terms of Wages and Working Conditions (e.g. safety, holidays etc).

Staff treatment benefits (3)

- Well treated staff are likely to be motivated and so produce quality products.

- Less likely to take industrial action if treated well.

- Positive staff treatment avoids legal action for breaking laws and bad publicity.

Staff treatment cost (1)

- Can be costly to pay all employees the living wage.

What is FairTrade?

The idea of Fairtrade is to ensure that workers in developing countries receive a fair payment for the goods that they produce so that they can maintain a decent standard of life.

Fairtrade also ensures employees are treated fairly with many opportunities to develop to their full potential.

FairTrade benefits (4)

- Quality of life should improve for workers in primary industries.

- The long-term prospects for children in the area should improve.

- FairTrade mark will make products more attractive to customers, which could increase sales.

- Improves company reputation if they are seen to be ethically responsible.

FairTrade costs (2)

- Fairtrade products can cost more, which may put some customers off.

- Limits the choice of suppliers for a business, which can have an impact of costs and lead times.

What will a business consider before choosing raw materials? (3)

- Minimising Environmental Damage from Material Deliveries (eg using local suppliers to cut down on pollution from delivery vans).

- Choosing Recycled Raw Materials (e.g. choosing to use recycled plastics, paper or cardboard for packaging materials)

- Minimising Wastage in Raw Materials (e.g. only ordering what is needed for current demand to prevent wasted stock).

How can a business minimise their carbon footprint? (4)

This refers to the impact on the environment of utilising fossil fuels.

A business can reduce their carbon footprint by:

• Using Renewable Energy (e.g. solar power, wind turbines).

• Using Low Emission Vehicles for Deliveries (like electric vehicles)

• Reducing Transport (e.g. utilising video calls instead of in person meetings.)

• Reducing Energy Consumption (e.g. switching lights off when not in use).

How can a business make their packaging environmentally friendly? (4)

• Being Reusable (e.g. bags for life, Barr's glass bottles - refilled and resold).

• Being Recyclable (e.g. Lush recycle their plastic containers into scarves).

• Being Biodegradable (e.g. replacement of plastic straws with paper straws).

• Minimising Packaging (e.g. reducing the amount of packaging being used - Mcflurry no longer have lids).

Recycling benefits (5)

- Can save money if recycled materials are used to make products.

- Improves the brand image of the organisation.

- Reduces costs because less landfill is required.

- Can be used as a unique selling point (USP).

- Recycling can give a business a competitive advantage.

Recycling costs (3)

- Recycled material may reduce the quality of the finished product..

- Some items, such as paper, can only be recycled a limited number of times.

- Recycled materials need to be sorted and processed, which can take time.

Minimising packaging benefits (4)

- Reduced production costs as less materials are required for packaging.

- Reduced transportation costs as goods are smaller and/or lighter.

- Reduces costs as less landfill is required.

- Can improve brand image.

Minimising packaging costs (2)

- Increased risk of damage due to insufficient packaging.

- May become less attractive to customers.

What is computer aided design? CAD

Computer-aided design (CAD) is when a computer system is used to create or modify a design such as:

● the layout of a kitchen

● the design of a building

● the design of cars and other vehicles

● the design of consumer products

● the design of clothes and textiles

CAD Advantages (4)

- Design process is more accurate, resulting in less wastage.

- Amendments can be made to designs without having to redo drawings/rebuild prototypes, which saves times.

- Faster than hand drawing

- Images can be seen in 3D

CAD disadvantages (3)

- Work could be lost due to sudden break down of computers.

- Software can be expensive to purchase

- Takes time to train staff on software

Discuss the advantages and disadvantages of using computer-aided design (CAD). (3 Marks)

Advantages of CAD

• more accurate design process - meaning less wastage

• faster than hand drawing designs

• amendments can be made without having to rebuild prototypes

• images can be seen in 3D

- will allow you to have an idea of how the finished product will look

• images can be easily used for marketing purposes

Disadvantages of CAD

• the software is expensive to purchase o expensive to upgrade/maintain • takes time to train staff to use the software

- can be costly to train staff

What is computed aided manufacturing? CAM

Computer-aided manufacturing (CAM) uses machines that are controlled by computers in the manufacturing process.

CAM advantages (2) and disadvantages (2)

Advantages:

- CAM/Robotics produce products in exactly the same way every time, improving consistency.

- CAM doesn't lose concentration so fewer mistakes are made, which limits waste.

Disadvantages:

- Huge investment is needed to automate a production line

- Breakdowns can be catastrophic, losing hours of production time and wasting vast amounts of materials.

Robotics

Robots can be used in the production process to reduce labour costs and carry out repetitive work.