Production of Goods and Services (Copy)
- Operations department
- Factory manager responsible for production line quality and quantity
- Purchasing manager for the right component and inventory
- Research and Development Manager responsible for designing and testing new products
- Productivity
- Output/ quantity of input
- Labor productivity = output in a given time period/ number of employees
- It can improve with new technology
- Quality control
- Automation
- Training to improve employee efficiency
- Increasing efficiency and productivity
- Reduced inputs required
- Cost per unit reduces
- Less workers needed
- Higher wages
- Why inventories kept by business
- Sourcing can take time
- High sales
- Price changes issues
- Lean production
- Reduces time for product development and availability in shops
- Non value addition activities cut out
- Overproduction –Â producing goods before they have been ordered
- Waiting not occurs
- Transportation improved
- Unnecessary inventory removed
- Motion that causes movement is improved
- Over-processing is avoided
- Defects are removed and faults are removed
- Beenfits
- Less shortage
- Quicker production
- No need to repair defects or replacement provided
- better equipment use
- Cut out some processes that are not beneficial
- Improved health and safety
- Kaizen
- Continuous improvement in production
- It comes from ideas given by workers
- Eliminates waste
- Productivity increases
- reduced amount of space
- Work in progress is reduced
- Improved layout of the factory floor can reduce the jobs that are unneeded
- Just in time
- Inventory only comes when needed storage costs reduced
- Warehouse space not needed
- Finished products sold quickly so money comes in quickly
- Cell Production
- Divided into separate self-contained units
- Flow or mass production not followed
- Each part produces one complete unit of the product
- Job production
- One specific task taken
- Personal services
- Exact requirements of customers
- Varied jobs and woekrs
- Varied work increases employee motivation
- Flexible and often high quality goods and services
- Disadvantages
- Skilled abor
- Costs are higher
- Production takes more time
- Products are specifically made in order so more errors
- High costs of specialist materials
- One specific task taken
- Batch production
- Complete blocks and batches produced
- Advantages
- Flexible working
- Variety to job works
- Variety of products
- Production may not be affected
- Problems
- Expensive as semi-finished products need to be moved to other parts of the production
- Machines have to be reset between production batches
- Warehouse space will be needed for inventories
- Flow Production
- Large quantities are in flow and continuous process
- Basic ingredients are put together at one end of the production line
- Benefits
- High output of standardized product
- Costs of making each item is kept low
- prices are lower
- Cpaital-intensive production labor cost reduced
- Specialize production
- Economies of scale in purchasing
- No need to move semifinished goods
- 24 hours production
- Low average costs and high profits, low prices
- Drawbacks
- Boring system for workers
- Significant storage requirements
- Capital costs of setting up production
- One machine breakdown can halt all production
- Factors affecting which production method to use
- Nature of product
- Size of market
- Nature of demand
- Size of the business
- Technology can changed production methods
- Automation
- Mechanization
- CAD/ CAM/ CIM
- EPOS
- EFTPOS
- Contactless payment is increasing
- Benefits of new tech
- Productivity increases
- Job satisfaction increases
- Skilled workers
- Quality products
- Quicker communication and reduced paper work
- Information available to managers
- High tech products
- Products
- Unemployment as machines take over
- Expensive to get new technology
- Employees may be unhappy
- New technology is changing all the time
