Production 

Total amount of output produced in a time period

Productivity 

Output per input per hour

Job production

One single product is made at one time

Batch production

Used when a business wants to make more than one item at a time and goods are made in batches. This means that they can be switched over to make something different

Flow production

Using production lines with continuous movements of items through the process

Cell production

Dividing up production into separate self-contained areas that are responsible for a section of work

Quality of inputs

High skilled/ high quality labour or high quality machinery increases productivity making it very high. Highly skilled workers are more trained and therefore faster than lesser trained workers

Motivation 

If the motivation is high then they’re much more likely to be productive. This is because they will be more driven to producing much more quality products in a faster amount of time but higher motivated staff may be more expensive

Investment 

Changes in technology may result in increasing productivity of production. This could be because the production process has been mechanised- robots can work 24/7 contrasting to workers. Results in high levels of unemployment which may damage the business’s reputation

The role of management

Focus on production not productivity as most managers think about short term gain vs reorganising the workforce to increase efficiency

Boosting productivity when markets are static

If demand is not increasing, the management introduce a more efficient way of working leading to job cuts as fewer employees will be needed to produce the same amount

Efficiency 

Reducing the amount of wasted inputs

Quality of inputs

High quality of inputs e.g. skilled staff mean that they are better at their job this will reduce the amount of waste produced as fewer mistakes are made. Also quality of goods is also likely to increase as skilled workers can make goods faster

Production 

Lean production approach to management helps to reduce unnecessary waste. This reduces the cost caused by waste and increases efficiency

Management of staff

Better organised staff= improvement in coordination of the business. Less time is likely to be wasted resulting in a reduction in costs and increased efficiency

Labour intensive

Many employees are needed to produce products. The labour costs will form a high % of total costs. It has a low financial barrier to enter

Capital intensive

A large % of total costs are tied up in fixed costs of purchasing and operating machinery. It has a high financial barrier to enter

Capacity utilisation 

% of total capacity that is being achieved in a given period

Current output/ maximum output x 10

Optimum level of capacity

the best level of capacity utilisation

90% because fixed costs are low and can cope with maintenance, training and new orders etc.

Fixed costs

expenses like rent, salaries, utilities etc.

Stock control

Control of the flow of stock in a business

Maximum level

Max level a business wants or can hold

Re-order level

Trigger point so that businesses know when to order next supply

Lead time

Amount of time between ordering and receiving stock

Minimum stock level

Minimum amount of product the business would want to hold in stock (more than 0= buffer)

Buffer stock

Amount of stock held as contingency in case of delay from suppliers

JIT Just In Time

Business doesn’t hold any components or parts of a product and orders them to be delivered the same day

Waste minimisation

Set of processes/ practices intended to reduce the amount of waste produced

Lean production

Production where the aim is to reduce the resources used: time, labour, capital, raw materials, space in factories

Quality 

How well a product or service does what it is intended and designed to do

Quality control

Concerned with checking and reviewing work that has already been done- about detecting faulty output

Quality assurance

Approach that aims to achieve quality by organising every process to get the product right first time and prevent mistakes from happening

Total Quality Management (TQM)

Two systems of quality assurance that must be adapted to each business to ensure that each worker is responsible for quality

Quality circles

An approach to quality management where groups of employees meet regularly to identify potential improvements and resolve quality issues

Continuous improvement (Kaizen)

A approach of continuously introducing small incremental changes in a business in order to improve quality and/or efficiency