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Operations Management/production (productivity - output per worker…
Operations Management/production
productivity
- output per worker
calc:
productivity = output/input
amount made related to put in
way to
measure efficiency of production
labour productivity = output (in a time)/no. of employees
we can
increase
it by
more output without increasing input
fewer input
Methods of production
Batch production
Method of production where
similar products are made in batches - certain no. of product and certain no. of other products made
Pros
more
variety to workers jobs
allows greater
variety of products
for consumers
flexible working - production can easily be changed
from one product to another
production may not be affected majorly if machinary were to break down
Cons
expensive as semi finished / finished product needs moving
about
machines have to be reset
between production batches -
delay in production + lost of output
warehouse space
will be needed for stocks of raw materials / components - cost
Flow production
Def: method of production when large quantities of products are
mass production: large quantity of standardised products are produced in a continuous process
Cons
storage requirements -
cost of inventories of raw materials and components and finioshed products are high
high capital cost - set up production line
boring system,
less motivation
if
one machinery breaks down - whole production line halted
- time waste
Pros
low cost - lower price
easy for
capital-intensive methods to be used - reduced costs for labour = increase efficiency
high output
of standardized product
capital intensive allows workers to
specialise in specific repeated task - only unskilled workers = no training required
low cost - low prices = higher sales
automated product
operate 24/7 - high output
benefit from
purchasing economies of scale
goods produced
quick and cheap
no need to move goods from one part of the factory to another like batch production = saved time
Job production
Def:
method of production where products are made specifically to order - each is different/unique
(specialized)
Pros
for
personal services/'one off' products
product
meets exact requirements of customer
workers have
greater job satisfaction - varied jobs
increases motivation (2)
flexible - for high quality goods/services: charged at higher price
Cons
Skilled labour
often used - training
Higher cost - labour intensive
Long time to produce
- waiting
Products made
specially to the order - any mistakes are expensive to correct
Materials specially purchased - higher costs
- no economies of scale
FACTORS AFFECTING METHOD OF PRODUCTION TO USE
market size
nature of demand
nature of the product
business size
Changes in business activities
Number of people employed in the business - Labour
(whether activity relies on manpower or automation)
Availability of resources - land
(How specialised the buildings and infrastructure is, as well as the natural raw materials available)
Consumer wants and needs - Enterprise
Technological developments - Capital
(demand shifts as new gadgets are brought out and render
older versions obsolete).
stock control
why?
minimum - buffer for unexpected demand
maximum - saves costs from excess stock (e.g transportation) and space that could be put into better use.
especially for manufacturing and retail
lead time - margin of time between the date when the stock is obtained and the date when it is sold on.
stock e.g raw materials, componentspartly finished goods, spare tools,...
when
reaches a certain point (reorder point) - ordered up to max level again
- -
must reorder before stock reaches too low (min)
because
lead time for delivery + manufacturing
lean production
waste
motion
- Employees having to move to far to do different bits of the job.
overproccessing
- Complex machines being used for too simple tasks
transportation
- Moving goods around unnecessarily or in small quantities regularly rather than one larger quantity less often
defects
- faults or errors
overproduction
- Making more than you can sell
waiting
- goods are not being processed and storage costs occur as well as employees not being engaged.
unnecessary inventory
- too much stock
Just In Time
pros:
Reduces the cost of holding inventory
Saves space in warehouses
The cash flow is better - no unnecessary inventory
KAIZEN
DEF:
continous improvement
pros:
Increased productivity
Reduced amount of space needed for the production process
Work-in-progress (unfinished products left waiting) is reduced
empower workers - increase productivity + motivation
def: method of storing very little inventory (stock of components using in production)what you need, when you need it.