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Topic 10 - Commercial Production - Coggle Diagram
Topic 10 - Commercial Production
10.1 JIT & JIC
JIT
JUST IN TIME
Orders Components for Production as they need them
means they don't need large
storage spaces
Pros
Low
Cost
of Storage Spaces
Elimination of
waste production
Very
flexible
Cons
Means
complete
reliability on suppliers
high
capital
investments
can result in
slow distribution
as you wait for parts
riskier
than JIC
means lots of the business
capital
is in stock which doesn't means money can't be moved about
JIC
JUST IN CASE
Companies keep an
inventory
to keep an amount of produce
Means that have supply if there is a sudden
rush
Pros
No
distribution delay
because of instant access to parts
The part will have already passed
quality control tests
Manufacturer is able to keep up with
market demand
Cons
Waste produced
from excess components not used
storage space
is required which is
extra cost
high capital investment in
warehouses
10.2 Lean Production
The
least
amount of people for the
most
amount of produce
Large Companies (
TNC
) often have an
excess workforce
The 10 Principles
Elimination of
excess waste
from the
beginning
of production
Reducing
inventory
Maximizing
production flow and
changeover of production line
Kaizan - continuous improvement of
workers & management
Empowering
Workers (suitable rights within the business)
Meeting
market demand
with production as best as they can
Designing for
Rapid Changeover
Reliable Relationship with
Suppliers
Meeting
Customer Requirements
Do it right the first time
Pros
Cost Reduction
increases
consumer satisfaction
Productivity Increases
Improve
work conditions
Reduce Environmental Impact
Cons
High
initial capital cost
Reduction in inventory
means slow distribution
Workers can be
difficult to manage
Value Stream Mapping
Look at the process and
remove inefficiency
How?
Bad Management
Bad Production Methods
Low Productivity
Ask the
workers
how they think production can be improved
Six Sigma
Management Technique to Improve Production
a measure of quality
statistical representation of performance
helps business
strategize
and
reinvest
in new area of the company
Work Flow Analysis
a review of the workers
Lead Time
the time quoted to customers (usually in days or weeks) between the date of purchase and the date of delivery.
5s'
Sorting
Stablizing
Shining
Standardizing
Sustaining the practice
7 Wastes (
TIMWOOD
)
Transportation
Inventory
Motion
Overprocessing
Overproduction
Defects
Waiting
10.3 Computer Integrated Manufacturing
Uses
G Code
(geometry)
An
alphanumerical
system
Helps with: design, planning, purchasing, costs, inventory, distribution
Types of Manufacturing
Too expensive for one-off production
Best for
batch, volume or mass
Very good for
mass customization
10.4 Quality Management
Quality Planning
Quality Control
Tolerances
put in place at certain stages
eliminates
waste and
maximizes
potential
product orientated
finds defects
Quality Assurance
Process orientated
prevents defects
Guarantees it has been done well
Quality Improvement
Statistical Process Control
making sure a process operates at its most efficient
Using Statistics
Collecting Data on Flights Delays
10.5 Economic Viability
Things to consider
R&D
Power Costs
Resource Costs
Capital Cost
Labour Cost
Marketing Cost
Use
Mathematical Modelling
cost-plus pricing
demand pricing
competitor-based pricing
product line pricing
psychological pricing
Prepare for
economic fluctuations, introductions of regulations, legal battles
by ensuring
supply of capital
Fixed
vs
Variable
Costs
Fixed
costs are capital costs + any cost that doesn't change e.g. Labour or things that are paid for
before
production
Variable
costs are costs that happen
in production
, can include materials, storage or distribution that all change
Break-Even Point
the point where neither a loss or profit is made
Sales Volume
The
number
of products sold over a space of time (
annually, quarterly
)
Costs
Fixed Costs
Consistent ( rent, insurance)
Variable
Wages, Raw Materials, Distribution
Break Even Point
Point from where after, all revenue is profit
Prices
Wholesale Price
Higher than manufacturing price, lower than retail price
Used when products are sold to distributers at high quantities
Return on Investments
Profits generated from production expressed as a percentage
Financial Return
Profits made from sales, considering manufacturing, development and sales, expressed as a cost