What is labour intensive work?
Labour intensive work is products mainly produced by human work, showing human creativity
Why is quality important? (4)
- want happy customers- if quality isn’t good then customers will return their product, loss of sales
- you will get skilled staff, high quality goods attract high quality staff
- creates good reputation- if quality is low then goods aren’t meeting the safety standard which would produce bad PR
- good quality means high sales and profits, highest quality goods can be sold for premium prices
What are advantages of labour intensive work? (3)
- customised product, workers can use their own unitive and problem solve
- workers are more motivated, can charge a higher higher price for specialisation
- more responsive to change, flexibility due to human skill, can make one of products
What is capital intensive?
Products mainly produced my machines and robots
What are some disadvantages of labour extensive work?
- expensive, skilled workforce, expensive to recruit pay and train
- additional quality control- measures may be required due to human error
- loss of production, workers require breaks like holidays which may result in a halt in production
What are some reasons for choosing labour or capital intensive (3)
- finance available- large amount of capital needed start for capital intensive, some businesses may not be able to afford that which is why there choose labour intensive
- amount of quantity needed- if large amount of of identical goods then go for capital intensive but need low quantity then go for labour intensive
- any limitations in technology- if not enough technology is available then would have to resort to labour intensive
What are some disadvantages of capitals intensive (3)
- cause residencies and make employees demotivated
- difficult to adapt to change- only suitable for standardised products
- halt in production- technology mishaps and breakdowns maybe costly
What is some advantages of capital intensive (3)
- isn’t hazardous towards human- machines can do dangerous work and reduce accidents
- machines can work 24/7- high volume of goods can be produced
- machines create same product- repetitive tasks humans would find boring
What are the differences between labour and capital intensive (5)
- capital has a high start up cost with machinery whereas labour is inexpensive as little machinery is used
- capital is standardised, products are the same whereas labour intensive is specialised and adapt easily
- capital has no human error and always high quality whereas labour intensive can cause human error but errors can be resolved as innovative
- capital has high costs to repair whereas has little/ no maintenance but high wage cost
- capital works 24/7 whereas labour needs holidays and sickness
What is Just in time
It is a system that involves receiving inventory as it is just being used in production
-often goods are not produced unless an order is placed from a customer
What are advantages of Just in time (4)
- lean- there is no wastage and is eco friendly and there is less chance of things not being used
- cost effective as little space needed so no need for warehouses
- responsive to change, no money tied up to stock
- good quality goods- perishable goods are fresher
What are some disadvantages of just in time (4)
- chance of late delivery- under-stocking which may halt production
- no room for production errors- may not have enough stock
- need a lot of managing and planning- need for careful budgeting and forecast
- may be more costly- need admin costs for regularly ordering and no bulk buying discounts
What is fair trade
- Fair trade is when suppliers of raw materials receive a guaranteed and fair price for their goods
- fair trade employees are treated fairly
- organisations are encouraged to use suppliers that are part of of a fair trade foundation
What are some advantages of fair trade
- good reputation- can attract customers as guaranteed quality and is easier to recruit employees
- loyalty- happy to buy from business with fair trade mark as feel good that employees are treated fairly
- competitive advantages- can be used as a marketing tool
- shows business is ethically aware- shines a good light on business as are fair to raw material suppliers
- good supply chain relationship- positive impact on raw materials and means the business can rely on suppliers
What are disadvantages of fair trade (3)
- transported a long way-creates environmental issues and makes a higher carbon footprint
- limited choice for suppliers- only so many people to buy from a suppliers may not be good ones
- may result in bad press- bad publicity if loose fair trade mark
Factors that may affect choice of production
Finance available- can’t afford Hugh set up of being capital intensive then would have to go lower set up cost which would be labour intensive
Quantity needed. High quantity may resort to capital intensive as masses of products are being made but if low quantity then labour intensive
Technology available- business located in a area with bad technology then capital intensive woukd not be reliable and go with labour intensive
Advantages of computer aided design (3)
- easier to test and arrange designs- designs can be viewed from all angles and ranges of materials
- cost effective- testing and consumers feedback can be done before costly production takes place
- Time efficient- ideas can be drawn and developed quickly
Disadvantages of computer aided design (3)
- expensive to set up- need a higher wages skilled workforce
- technology blips- computers can fail which could halt production
- hard to keep up- difficult to keep up with PESTEC factors and keep up with the newest technology
What is computer aided design
Use of computer software to design new products in 3D
What are uses of technology in operations (4)
Internet- The Internet can be used by the operations department to find suppliers and compare prices.
Email- Email can be used by the operations department to contact suppliers and place orders.
EPOS track levels of stock and re order when below minimum stock level
CAD- use of computer software to designs new products in 3D
What is quality control?
Quality control is inspection of raw materials at the end of production
Advantages of quality control 2
- reduces chance of poor quality products reaching the end users
- less wage costs - only some employees need to be trained as inspectors look for the faults
Disadvantages of quality control 3
- slows down production if quality isn’t good enough - faults only found at the end of production
- High wastage costs- everything thrown out if quality isn’t good enough
- time consuming- reworking faulty products and creating a better product
What is benchmarking
Benchmarking is comparing your organisations to the industries leaders and using industries leaders as the lowest acceptable quality
