operations management

operations management

getting the right goods/services in the right quantities at the right quality level in a cost-efficient manner

capacity utilization

measure existing level of output as a proportion of potential output

pros of capacity utilization

* financially important as it spreads out costs over large level of output
* lower fixed costs allowing for higher profit margins
* effective

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

inventory is based of actual customer orders not forecasted sales

Andon

a visual control indicating status of production

crisis management

response of an organization's to a crisis situation

factors affecting crisis management

* transparency
* communication
* speed
* control

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
* risks: do not guarantee survival

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

* first movers advantage
* competitive edge
* growth opportunities

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

incremental innovation that adjusts or develops something that already exists

innovative creativity

creating something new

JIT

stock control system where stocks are delivered as needed