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Chapter 23 - Operations Planning - Coggle Diagram
Chapter 23 - Operations Planning
Factors of operation decisions
The availability of resources
Location (locate in country with resources)
Nature of production method (wage costs, electricity costs)
Automation
Technology
CAD
CAM
Link with marketing
Forecast market demand
Lean production, less storage costs
CAM
The use of computer programs to create 2D or 3D graphical representations of physical products
Animations, special effects, advertising, furniture
Benefits
Lean production
Increased productivity
Faster time-to-market
Great accuracy
Limitations
Employee training is needed
High computer processing power is needed, costly investment
Complex programs
Problems without good coordination
Too few workers, insufficient labour
not enough customers
Not enough capital to pay for stocks, expenses
Operations Planning
Preparing input resources to supply products to meet expected demand
CAD
The use of computer programs to control machines in manufacturing of components or complete products
automation
Benefits
faster production, increased productivity
Precise manufacturing, less errors
More flexible production
Limitations
Hardware failure
Cost of investment is expensive
Operational Flexibility
The ability of a business to vary both level of production and the range of products following changes in consumer demand
Increase capacity by extending buildings and buying more equipment (expensive)
Hold high stocks (storage costs, cash flow problems)
Have flexible flow line production
Have a flexible and adaptable labour force
Process innovation
The use of a new or much improved production method or service delivery method
Examples
Amazon unmanned drones to deliver packages directly to customer homes
Pilkington float-glass production process
Benefits
Lean production
Maintain and increase competitiveness
Cheaper production methods
Production Methods
Flow Production
Producing items in continually moving process
Capital intensive, large quantities produced
Fast and cheap products, standardized products, less errors, capital intensive, JIT
High investment costs, capital intensive
Job Production
Producing a one off item specially designed for one customer
High quality and specific to customer, less customer complaints
Most are labour intensive
Labour intensive production may be expensive and long
Batch Production
Producing a limited number of identical products, each item in the batch passes through one stage of production before passing on to the next stage
Division of labour, cheaper production relative to job, economies of scale
High levels of work in progress stocks
Production is done stage by stage and not flow, labour and capital production
Mass Customisation
Flexible CAM and CAD to meet individual customer requirements and produce at mass product cost levels
Very expensive investment cost
Low cost, customer to customer requirements
Latest computer software, high-skilled-labour
Influences
Finance availability
Labour availability
Market Size
Scale of operation
Economies of scale
Finance
Technical
Purchasing
Marketing
Diseconomies of scale
worker alienation
poor coordination
Communication problems
Location
Qualitative
Ethical factors
Environmental factors
Infrastructure
Manager preference
Planning
Devicion techniques
Profit estimates
Investment appraisal
Break-even analysis
Quantitative
Labour costs
Transport costs
Site cost
Revenue potential
Government Grants
International Locations
Problems
Cultural differences
Supply chain problems
Language
Ethical concerns
Reduce costs
Avoid trade barriers
Access Global Markets