Studied by 1 personoperations management
getting the right goods/services in the right quantities at the right quality level in a cost-efficient manner
capacity utilization
refers to extent to which an organization operates at its maximum level
pros of high capacity utilization
financially important as it spreads out costs over large level of output (economies of scale)
lower fixed costs allowing for higher profit margins
effective, makes most use of resources
cons of capacity utilization
potential breakdown of machinery
lower standards of customer service
stressed workers
pros of JIT
reduced storage costs
reduces wastages if inventory is perishable
reduce break-even level
cons of JIT
cannot account for drastic increase in demands
reliance on dependable suppliers
cannot take advantage of economies of scale
lean production
streamlining operations/processes to reduce waster and achieve greater efficiency
Kaizen
small but continuous improvements to achieve efficiency
Kanban
a card based system which attaches tags to each aspect of production process
Andon
an audio visual control indicating status of production
crisis management
response of an organization's to a crisis situation
factors of effective crisis management
transparency: stakeholders kept informed of whats happening to assure them that safety is the priority
speed: senior managers need to act quickly
control: situation should be put under control as soon as possible
contingency planning
being proactive to changes by planning in the case of unwanted events
pros of contingency planning
cost: minimizes negative reactions to reduce costs
time: saves time
risk: accounted for
safety: alleviates staff's concerns
cons of contingency planning
costs: may not even happen
time: uses up valuable time
quantitative factors influencing location decisions: (4)
cost of labour
proximity to market/raw materials
government incentives/limitations
cost of land
qualitative factors influencing location decisions: (4)
feasibility of e-commerce
local knowledge
political stability
infrastructure (transportation/communication networks)
R&D
extensive research into new productions and development of prototypes
pros of R&D
continuously advances products
competitive edge
helps prolong product life cycle
ensures products are made for taste of consumers
cons of R&D
costly
high failure rate
budget concerns
product innovation
new creations or development of existing products
process innovation
a change in the way a product is manufactured or distributed
positioning innovation
reposition the perception of brand
paradigm innovation
changes nature of certain market
mass production
manufacturing of large numbers of identical products
job production
customizing individual product to meet specific requirements
batch production
producing limited number of identical product
flow production
continuous production of identical products
cellular manufacturing
poduction whereby sets of tasks are completed by teams
adaptive creativity
altering or modifying something that already exists
innovative creativity
creating something new
JIT
stock control system where stocks are delivered as needed
Quality control
quality of product checked or tested at the end of production ti make sure they meet quality standards
quality assurance
employees at every stage of production assuring that the quality is maintained
methods of managing quality
quality circles
Benchmarking
total quality management
quality circles
small groups of people that meet and share responsibility to examine issues related to quality
Benchmarking
business comparing products, operations and processes to others within same industry. market leaders used as a point of reference for targets
historical benchmarking: comparing to past
inter-frim benchmarking: comparing to other firms
total quality management
requires whole company to commit to achieving quality standards. assures that quality is core focus in all functional areas
importance of lean production on TQM
reduces waste which saves cost
boosts quality of products
supply chain proccess
a sequence of activities that start with extracting raw materials, to production, to distributors and to hand of consumers
just incase production
a production technique where more stock is stored just incase there is a sudden increase in demand
whats the x and y axis on a stock control chart
y: stock level
x: time (months)
what is stock control chart based on
Lead time: time frame/lag from when they place the order until it arrives
Buffer stock: minimum stock level that a firm wishes to hold just incase there is a change in demand
Reorder level: level of inventory when firm is required to reorder stock. ensures stock is delivered in before it runs out
Reorder quantity: amount of new stock ordered for production usage
productivity rate
measures efficiency of worker by measuring average output per worker
cost to buy
price x quantity
helps in outsourcing decision by calculating total expenses
cost to make
fixed costs +(AVC X Quantity ‘contribution’)
total cost of producing good or service in house and not using 3rd party supplier
Note
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