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Organizational Aspects of Operations (JIT (toyota) (highest volume of…

- - - - variation in demand are ignored and activities are constant -> stable employment in time of high demand, high utilization of resource
        But when deman fall. cost rise for over-staffing or stock:
        
        if margin are esp. higher then few customer are acceptable (special art/antique)
        
        if resource are tight, customer have to queue (public sector)
      - capacity adjustment to meet demand
        
        manufacturing: over time or hiring temporary labour (flexibility) but expensive and only applicable if spare resource + social cost and financial cost
        
        serivce: scheduling difficult because variation in time demand by each client (eg: ATM, but where resource stretch there may be cost of reducing quality)
      - Demand can be adjust to fit capacity by price reduction or ad campaign
        
        other solution: covince customer to accept delay or subcontract work to other company
        
        scheduling is sensitive between firms and environment
- - - - notion of measurement against performance standard - method has moved from control, assure to improve
      - traditionally:
        
        1) define specific performance standard or quality characteristic and measure applied (dimension, appearance, reliability, durability, speed...)
        
        2) assess goods and service against that standard to determine what's acceptable or not (usually done in stages)
        
        manufacturing: quality check on incoming material and components, regular checks at each stage of production and final examination of finished product -> ensure problem are dealt as soon and not pass to next stage
        
        tolerance factors
        
        decision to check product or sampling method -> corrective action to close gap between performance and standard
        
        3) information obtained in quality control process -> feedback -> improvement
        
        2 problem measuring performance against standard:
        
        approach is inward-locking and emphasize organizational criteria than customer criteria
        
        approach are historical: faults are rectified after they occured -> other approachers:
        
        benchmarking: compare performance in one against another (same/different organization) to improve
        -> don't replace traditional approach but focus on marketplace and performance improvement
- - - - make-or-buy decision involve vertical integration, give management greater control over reliability of suppliers, add dimension to the firms as suppliers to others
      - make less prodcut, rely on outsourcing
      - ad:
        
        one supply firm: good relationship -> commitment and dependability + frequent communication -> improve quality
        
        many supply firms: flexible and experience by dealing with customer + competitive -> low price
      - dis: relative power -> contract unfairly secured, bribery
    - - cost: storage capacity, nature of operation system
      - JIT: buy many -> many discount
    - - Buy at current price for futher delivery: risky because volatile nature of market
      - 2 trends:
        
        extension of manufacturing process down the supply chain
        
        globalization: low wage cost and specialist
- - - - quality: dependability and attractiveness to customer, reduce costs and added value by error-free goods, reduce cost of waste and making corrections, dissatisfied customers
      - dependability: capacity of firms to deliver goods, meet expect of price, quality and durability and on time by carry large stock (costly) -> need JIT & TQM
      - speed: - of time between product idea and appearance on market - of devlivery (minimize wating time and stock and forecasting)
      - flexibility: alter product meet high deman with little load time to survive competitive and declining market -> attractivness of wide selection, ability to deal with fluctuation and deliver on demand
      - cost: product development, operation system and materials, facilities and staffing, only good if combine with improved quality, dependability and speed