Ways flexibility can be improved
- Managing customer demand
2. Managing the business’ supply
Ways to manage supply
- Produce to order
- Mass customisation
- Outsourcing
Produce to order definition
Product is only manufactured once and order has been received
Modular approach definition
Basics of the product are fixed and some elements are allowed to be customised
Advantages of produce to order
- Customers get exactly what they want
- Less costs spent on buying raw materials that are never needed
- Can add value
Disadvantages of produce to order
- No consistency of production
- Increased unit costs due to poor capacity utilisation
What does mass customisation involve?
Making bespoke individualised items for different customers but on a mass level
(See diagram)
Four approaches to customisation
- Transparent
- Collaborative
- Adaptive
- Cosmetic
How do adaptive customisers work?
They offer one standard, but customisable product that is designed so that users can alter it themselves.
How do cosmetic customisers work?
They present (package or market) a standard product differently to customers
How do transparent customisers work?
They provide individual customers with unique goods or services without letting them know explicitly that those products have been customised for them
How do collaborative customisers work?
They conduct a dialogue with individual customers to help them state their precise needs, the make customised products for them
Advantages of mass customisation
- Can better target specific market segments
- Allows a competitive advantage to be created
- Added value
Disadvantages of mass customisation
- Rejected customised products cannot be reused for another customer
- Further increased flexibility from suppliers is needed
Advantages of part-time workers
- Lower costs
- More flexible
- Can recruit wider range of skills for same total employment cost
Disadvantages of part-time workers
- Potentially higher costs on training
- Harder to communicate with employees if they spend less time in the business
Advantages of temporary workers
- Very flexible
- Ideal for specific jobs
- Chance high quality temp can be persuaded to join the business permanently
Disadvantages of temporary workers
- Higher cost per hour
- Temps are less likely to know and understand the business
- Potentially less motivated and productive
Outsourcing definition
Getting another business to provide part of the production process for you
Advantages of outsourcing
- Can react quickly to changes in demand without permanently increasing capacity
- Specialist companies can provide higher quality
- Reduced operational and recruitment costs
Disadvantages of outsourcing
- Quality can be damaged
- Price of final product will be pushed up
- Might slow down production process
Supply chain definition
System in place that facilitates the delivery of a product from a business’ supplier to its customes
What was the traditional supply chain policy?
‘Viking’ - volume is king
Ideal supply chain features
- Wide variety of suppliers with alternatives
- Clear and effective method of distribution
- Suppliers who conform to the quality, ethical or environmental standards
- Reaches around the world
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1.1a Business Objectives3
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1.1b Costs5
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1.1c Revenue and Profit3
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1.2a Sole Traders3
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1.2b Limited Companies15
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1.2c Shareholding16
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1.2d Public and Private Sector7
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1.2e Non-Profit Organisations10
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1.3a Demand9
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2.1a Managers and Leaders9
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2.1b Leadership Models7
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2.2a Decision Making7
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2.2c Opportunity Cost2
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2.2d Decision Trees9
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2.3a Stakeholder Perspectives5
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2.3b Communication1
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3.1a Marketing Objectives10
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3.2a Primary Market Research17
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3.2b Secondary Market Research7
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3.2c Analysing Market Data9
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3.2d Sampling14
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3.2e Extrapolation12
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3.2f Correlation4
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3.2g Price Elasticity of Demand10
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3.2h Price Elasticity of Demand (2)3
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3.2i Income Elasticity of Demand8
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3.2j Using Technology to Collect Marketing Data1
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3.2k Collecting Data to Make Marketing Decisions3
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3.3a Market Mapping3
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3.3b STP: Market Segmentation4
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3.3c STP: Market Segmentation (2)3
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3.3d STP: Target and Positioning14
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3.4a The Marketing Mix17
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3.4b New Product Development5
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3.4c Product - Boston Matrix12
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3.4d Product Life Cycle11
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3.4e Pricing Decisions13
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3.4f Promotional Mix20
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3.4g Place14
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3.4i Influences on an Integrated Marketing Mix2
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4.1a Understanding Operational Objectives21
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4.2a Unit Costs2
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4.2b Capacity11
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4.3a Labour Vs Capital7
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4.3b Labour Productivity17
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4.3c Technology11
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4.4a Quality / 4.4b Managing Quality21
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4.4c Suppliers9
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4.4d Improving flexibility29
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4.4e Inventory Control13
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5.1a Financial Objectives17
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5.2a Contribution3
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5.2b Break Even9
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5.2d Cashflow10
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5.2e Working Capital8
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5.2f Setting Budgets10
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5.2g Variance Analysis8
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5.3a Sources of Finance33
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5.4a Improving Cash Flow2
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5.4b Analysing Profitability7
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5.4c Methods of Improving Profit6
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5.5a Making Financial Decisions2
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5.5b Internal/External Influences on Financial Objectives2
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6.1a Understanding Human Resource Objectives14
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6.2a Analysing HR performance13
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6.3a Organisational design29
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6.3b HR Flow24
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6.4a Motivational Theories16
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6.4b Financial vs Non-Financial Rewards32
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6.4c Job Design8
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6.5a Employer-Employee relations24
