1
Q
give three facts about tech
A
-in the 1920s mass production methods are introduced to reduce price of goods like cars and make them affordable to middle class
- by 1950s consumer durables like cars and washing machines are available at affordable prices to mass population
2
Q
- what is CAM?
- give an example
A
- the use of computers in production
- robotic welders in vehicle production, packaging vegetables for supermarkets
3
Q
- advantages of CAM? (3)
- disadvantages of CAM? (3)
A
- sorting machines produce output of same quality
- lower labour production costs, less supervision
- cuts costs by ensuring waste is minimised
- training can use CAM can be expensive and complicated
- reduces the need for workers, harming reputation of business
- redundancy payments
4
Q
- what is computer modelling?
A
- using a computer to simulate a real life system in order to be able to study behaviour in different scenarios
5
Q
- advantages of computer modelling (2)
- disadvantages of computer modelling (2)
A
- -allows developers to try a huge range of what if scenarios
- allows perfection of products and efficiency of production
- -costs of equipment can be high
- mistakes can be made in programming which can be time consuming
6
Q
- what is robotics?
A
- the more automated a machine is, the more it can determine its own behaviours, the more likely it is to count as a robot
7
Q
- advantages of robotics? (3)
- disadvantages of robotics? (3)
A
- can carry out repetitive tasks with great accuracy, whereas humans get bored
- do dirty and dangerous jobs without complaining
- don’t get sick / take days off
- initial purchase cost can be high and maintenance costly
- reprogramming can be costly
- cannot problem solve
- initial purchase cost can be high and maintenance costly
8
Q
- what is computer aided design?
A
- an interactive computer system that is capable of generating, storing and using computer graphics. It assists design engineers and solving design problems
9
Q
- advantages of CAD? (3)
- disadvantages CAD? (3)
A
- accurate designs can be viewed in 3D and rotated
- can detect faults before manufacturing
- reduces the cost of design process
- costly to set up ( buying machinery and training )
- possible redundancy payments to unskilled workers
- harmed reputation of business if employees made redundant
- costly to set up ( buying machinery and training )
10
Q
- what is IT
A
- used throughout businesses to increase productivity in a number of ways, such as databases being held to improve customer relations
11
Q
what are the key aspects of IT? (4)
A
- marketing ( eg how to contact is/ gather detailed customer profiles to build database )
- intranet ( allows a much wider geographical market to be targeted, cheaper advertising and customer convenience
- info gathered from browsing and purchasing habits ( allows sophisticated targeted marketing to take place )
- social networking ( marketing tool )
12
Q
what are the advantages of technology? (4)
A
- improved quality ( consistent)
- faster innovation ( easier and less expensive to model and test new products)
- less dependency on labour ( reducing business costs and waste, increased productivity, improved communication )
13
Q
disadvantages of technology? (3)
A
- costs of buying tech and training
- tech doesn’t always work ( lost production time can be costly)
-number of different labour costs ( implementation of tech, redundancy payments and retraining )
14
Q
what is the impact of technological change on customers (3)
A
- gives customers a wider choice of products from rapid innovation and tech change e.g. phones and camera s
- improved speed of communication e.g. tracking parcels
- existing products become absolute more quickly
15
Q
- what is added value?
A
- during production process a business after value to the raw materials which it uses when making a product. The increased worth a business creates for a product
16
Q
how do you calculate added value
A
difference between the cost of purchasing raw materials and the price for which the finished goods is sold for
17
Q
- what shouldn’t added value be confused with?
- what does added value also apply
A
- profit
- provision of services ( e.g. when a wholesaler provides its services, it has added value by making it convenient for local retailers to get the amount they need of a product to sell to their own customers in their shops )
18
Q
how can added value be increased?
(5)
A
- purchasing cheaper raw materials
- however must take care that quality isn’t compromised when doing so.
- improving efficiency of production process
- for example purchasing up to date machinery or training workforce
- raising the price of a product
- however must consider PED, product could be price sensitive
- Achieving brand status
- e.g. chanel perfume in comparison to cheaper perfumes, they all use the same processes
- offering additional services with product
19
Q
- what is job production
- give examples
A
- A unique product that is often made by a skilled craftsman specific to a persons requirements
- wedding dress, tailor made suits, architectural buildings
20
Q
- advantages of job production (4)
- disadvantages of job production? (4)
A
- -unique
- high quality (as its likely to have been handmade and a lot of time goes into it )
- higher prices ( can be charged due to uniqueness) - specialised employees are more likely to enjoy their jobs ( as they are utilising their skills )
- high quality (as its likely to have been handmade and a lot of time goes into it )
- expensive for consumer
- time consuming
- higher wage bill ( skilled employees will demand higher bills)
- targets a smaller market
21
Q
- what is batch production
- examples of batch production
A
- the manufacture of a limited number of identical products. Within each stage of the production process, work will be completed for the whole batch before moving onto the next stage
- clothes, paint, bread
22
Q
- advantages of batch production (5)
A
- reduction in unit cost (as can benefit from economies of scale )
- products can be produced in very large or very small quantity depending on level of demand
- suitable when products are divided into a number of operations
- allows for a variation ( in production e.g. different sizes )
- quicker than job production ( it combines elements of job and mass production
23
Q
disadvantages of batch
production
(4)
A
- one faulty product in batch ( means whole batch has to be thrown )
- time lost switching between batches ( e.g. cleaning and reloading machines )
- employees bored and demotivated
- initials costs of machines
24
Q
- what is flow production?
- give examples
A
- production is organised so that different operations can be carried out one after the other, in a continuous sequence and production moves continuously from one stage of production to the next
- crème eggs, cars
25
what’s the advantages of flow production? (4)
- large quantity can be produced for standardized products
- unit costs reduced from economies of scale
- uniformity can be attained
- less labour
26
what are the disadvantages of flow production? (4)
- high set up costs
- products tend to be standardised
- breakdown of equipment costly
- employee demotivation as job tends to be repetitive and boring
27
what factors determine which production method is used? (4)
- actual product
- cost of labour
- cost of capital
- availability of money for investment
28
what is lean production?
methods of modern Japanese industrial management that are designed to achieve the reduction and removal of waste within a business
29
give examples that don’t give any added value (3)
- raw materials lying around
- finished products sitting in a warehouse waiting to be delivered
- skills and knowledge of workers not being used by management
30
list the important component parts of an effective lean productive system (4)
- Just in time
- kaizen
- cell production
- time based management methods
31
what is just in time?
ensured that parts, raw materials and components are received and products are made only when there is demand for the parts
32
what are the JIT tools? (5)
- management and understanding
- supplier relationships
- kanbar
- employee involvement
- customer relations
33
what is management understanding?
- managers must walk the line ( follow production process from start to end) to understand the processes used to complete the finished product
34
why are supplier relationships important in terms of JIT
- relationships with suppliers are strong and communication systems need to be effective
- suppliers need to be told when and how much stock is needed ( barcode system)
35
1. what is kanbar in terms of JIT
2. give an example
1. the use of order cards to ensure a regular and timely supply components
2. employee of supplier continually working on shop floor ensuring that the parts arrive in the right place at the right time
36
1. what is employee involvement important in terms of JIT? (3)
- strong relationship with employees is needed, people centred approach from managers
- employees must be trained to use systems effectively and understand they role in ensuring that the system works
- cells of production are important, cell working encourages use of job enrichment as there will be more employee control over tasks
37
what are the factors of customer relations in terms of JIT? (3)
- strengthen relations with customers
- customers can use EPOS systems that can be tied in with manufacturing system
- orders can be placed electronically so the finished product can go straight from production line to delivery
38
what are the advantages of JIT? (4)
- improves cash flow ( less stock held )
- reduces waste
- factory spec freed up for more productive use
- control of supplier improved
39
what are the disadvantages of JIT? (5)
- a lot depends on reliability and flexibility of suppliers
- ordering and admin costs likely to rise
- lost bulk buying advantages
- difficult to cope with sudden changes in demand
- reputation if customers are let down by late delivery
40
what are the advantages of lean production? (4)
- raised productivity
- costs reduced
- doesn’t hold stock if JIT is applied
- waste reduced
41
what are the disadvantages of lean production
- businesses can be vulnerable as there’s no inventory
- relies heavily on efficient and reliable supply chains
- employees can be expected to take on a more active role working business
42
what are the benefits of cell production? (3)
- employees are trained to perform a number of tasks in a cell allowing job rotation
- skills of employees means they can each play a role in improving quality and create flexibility in production process
- communication is improved and job enrichment enlarged improving motivation
43
what is time based management? (2)
- when time is regarded as a key business resource, speed of development, response and delivery is important
- emphasis is is placed on reducing time taken in all aspects of the whole production process like JIT and CAD
44
1. what is kaizen
1. businesses take on the view that one of the main objectives of their existence is to be continually making small incremental steps in the improvement of quality design and waste reduction
45
1. how do businesses apply kaizen?
2. what does applying kaizen mean?
1. - using kaizen groups
- employees have a common stake in part of the production process
- the meet regularly to discuss problems and suggest improvements
2. overtime the whole cost base of the business can be reduced whilst quality and level of output increases
46
what are the key elements of kaizen? (5)
- all employees should be asking how can i do better
- doesn’t ignore the need for new technology or large scale capital investment
- a motivated workforce so all employees are committed
- effective communication systems
- a trained workforce
47
what are the benefits of kaizen? (5)
- improved labour relations
- improved quality
- increased productivity
- improved motivation
- increased competitiveness
48
what is productivity?
the measurement of the efficiency with which a business turns production inputs into outputs
49
how do you work out labour productivity?
output ( per period ) / number of employees per period
50
how do you work out capital productivity
output / capital employed
51
what are the advantages of high productivity? (4)
- increased economies of scale
- increased competitiveness
- spreading fixed costs over higher output
- lower unit costs
52
how can businesses improve productivity?
-technological improvements
- replacing labour with machinery
- improving motivation of the workforce ( financial / non financial)
- reducing absenteeism
- job enrichment/ rotation
- kaizen
53
what is capacity utilisation?
-the use that a business makes of its resources
- it is measured by comparing actual output with potential output at full capacity
54
what is the equation for capacity utilisation ?
actual level of output / maximum possible output
55
what are the advantages of operating at full capacity? (3)
- average costs are minimised since fixed costs are spread
- employees feel more secure in jobs raising motivation
- improves company image ( being bust may encourage customers
56
what are the disadvantages of operating at full capacity? (4)
-possible fall in quality as there can be a strain on resources if overworked
- puts pressure on staff ( too much overtime can lead to absence stress and accidents
- machinery may be overworked and is more likely to break down if insufficient time is put aside for maintenance
- lack of flexibility ( orders may be lost if no capacity is available to accommodate new customers
57
what is spare capacity? (2)
- output as a percentage of total capacity
- if a the level of spare capacity is significant then this is an underutilisation of the factors of production
58
what are the problems with spare capacity
- demotivation of staff as overtime probably isn’t available
- increases costs to the business ( business may be forced to make people redundant that comes with costs and wastes management time on reorganisation
-reduces profits - limiting capital for r&d, investment, and competitiveness
- lack of return on investment capital
59
1. how can you resolve problems of spare capacity? (3)
2. what do businesses expect when resolving spare capacity?
1. - subcontracting
- rationalisation
- increasing use of assets
2. the market in which they operate will recover and demand will increase
60
what is subcontracting?
getting someone else to produce the goods for you, reducing risk to the business
61
1. what are the advantages of subcontracting? (3)
2. what are the disadvantages of subcontracting? (3)
1. reduces capital investment. they don’t have to:
-make the good
-lease the factory space
- employ and train the workers
2.
- lack of control especially in regards to quality
- limited number of potential subcontractors that could make prices high
- delays in delivery lead to customer dissatisfaction
62
what is rationalisation?
concentrating on core products or services and disposing of those products or services when they are not seen as profitable or necessary for long term success
63
1. what are the advantages of rationalisation
2. what are the disadvantages of rationalisation
1. allows management to concentrate and focus on business strengths
2.
- lost customers who bought into the businesses whole package of products
- implies redundancy costs
- reduces book value of assets
64
1. what is research and development
involves identifying new ideas and turning them into products, services, and processes
65
1. what is innovation ?
2. what is research?
3. what is development ?
1. the commercial exploitation of an investment
2. the inquiry into, and discovers of new ideas
3. the process which changes ideas that result from the research process into commercially viable products or processes
66
what are the 7 stages of the product design and development process?
1. identification of problem
2. research
3. development of ideas and solutions to solve the problem
4. development of prototypes
5. final design
6. testing
7. manufacturing
67
what are the advantages of investing into research and development? (5)
- gives businesses competitive edge ( patents can be obtained preventing competition, like dyson bangles )
- creates new and innovative products that appeals to customers
- can improve working environments ( new machines may cut costs, raise productivity, be cleaner and safer to use)
- can improve image since consumers are impressed when a business is committed to research and development ( e.g. pharmaceutical firms gain prestige for fighting aids and cancer )
- motivate employees by satisfying higher needs
68
what are the disadvantages of research and development? (3)
- - many business organisation are put off because of the cost ( however we see a number of unis working with companies to share costs as it helps train graduates
- R&D may be carried out in the UK but production could be moved elsewhere ( such as dyson to China )
- can shorted the product lifecycle if effective ( e.g. iphones, fashion )
69
what role does market research play in research and development (3)
- helps develop existing products
- is continuously carried out with the objective of discovering customer attitudes
- product revamps and redesigns occur as a direct response to market research
70
1. what is pure research?
research to find out how or why, with no product objective often carries out by unis or research institutes
71
what is laboratory research
- testing, for example pharmaceutical compounds on animals
72
what is the evaluation of existing products?
discovers if there’s problems with a product and how the problem can be resolved
73
what is brainstorming
using discussion groups to think outside the box and come up up with ideas for solving existing problems
74
what are economies of scale
the reduction of average costs of production that occur as a business increases its scale of production
75
1. what are costs like in the short run
2. what are costs like in the long run
1. variable and fixed
2. become variable
76
what are internal economies of scale?
reductions in the average cost per unit of output as a result of increasing internal efficiencies of the business
l
77
what are the 6 types of internal economies of scale?
marketing
managerial
risk bearing
financial
technical
purchasing
78
how does marketing work as an internal economy of scale
as a business grows, each pound spent on advertising will have e a greater benefit for the business as advertising costs are spread over more units
79
how does managerial work as an economy of scale
bigger the business the greater the ability to employ specialist staff more likely to lead to efficiency e.g. football managers and accounting
80
how does risk bearing work as an economy of scale
larger producers can spread risks because they can diversify into different markets so if one fails they have a back up
81
what are the financial economies of scale
easier access to loans offering security they can also negotiate more favourable rates of interest
82
what are the technical economies of scale
machinery allows products to be made/ jobs to be performed quicker more use of division of labour and specialisation
83
how is purchasing an economy of scale
as the business grows, it increases the size of orders for raw materials resulting in discounts and the cost of each individual component purchased falls
84
what are external economies of scale?
the advantages of scale that benefit a whole industry not just an individual business
85
what are the 6 types of external economies of scale?
- labour
- supplier economies
- educational economies
- financial economies
- commercial services
- co-operation
86
how does labor work as an economy of scale
concentration of business may lead to the build up of a labour force equipped with the skills required of the industry
87
what are supplier economies (3)
- network of suppliers attracted to an area where a particular industry is growing
- since they’re often in competition with one another costs are reduced
- allows for JIT
88
what are educational economies?
local colleges set up training schemes suited to the largest employers needs creating an available pool of labour reducing training and recruitment costs
89
1. what are external financial economies
2. give an example
- financial services improve that may be geared towards a particular industry
- e.g. an industry where cash flow may be a problem debt factoring services may be made available at a competitors rate
90
how do commercial services work as and economy of scale?
growing industry tends to attract smaller businesses trying to serve its needs. A wide range of commercial and support services can be offered such as banking, marketing, waste disposal and maintenance
91
how does cooperation work as an external economy of scale?
businesses located in the same region may join forces to fund and research and development centre for the industry
92
what are diseconomies of scale
the factors that cause higher costs per unit of output when. the scale of an organisation continue to increase the causes of inefficiency in large organisations
93
what are internal diseconomies of scale
-occur where the average unit costs increases as output expands, in long run
- when a business becomes very large
94
what are the effects of internal diseconomies of scale, (3)
1. communication- becomes more harder to manage and more complex leading to misunderstanding
2. morale may suffer as individual employees become a minor part of the total workforce therefore feel their views are ignored
3. coordination is more difficult and control is weakened because large biskesses are divided into departments, time is spent in meetings with is a cost itself
95
what are the factors of external diseconomies do scale (2)
-overcrowding in industrial areas leading to traffic congestion, late deliveries, staff arriving late, public relations suffer
-increased price of resources - increased demand for labour to work in crowded areas so the best employees may be harder to recruit and keep
96
give some examples of diseconomies of scale
-regulatory costs
- risk aversion
- waste/ inefficiency
97
why do small firms survive? (5)
- they provide a personal service- people like doing business directly with owner
- happy to remain as a small business - content with level of profits responsibilities and risks
- more flexible - can react to changes in the market, management can make decisions easily
- customer loyalty
- often serve in niche market
98
what is quality?
the features of a product or service that allows it to satisfy customer wants
99
what are the benefits of quality? (5)
- increased sales
- reduced costs
- reduced waste
- market orientation
- customer satisfaction
100
how can you maintain quality? (5)
- use good quality raw materials (reliable and durable)
- keep up to date with any developments ( technical and production processes)
- keep staff and subcontractors well trained
- maintain effective after sales service (e.g. delivery and speed of response)
- undertake market research ( gain feedback
101
what are the benefits of having a purchasing department? (5)
- ensures the purchase of quality and consistency ( good rep)
- specialist purchasing managers can be employed ( have qualifications and experience sourcing materials)
- more likely to purchase materials at most competitive prices
- take advantages of economies of scale
- ensure they don’t run out of any raw materials and make sure re too much isn’t purchased reducing waste
102
how does purchasing achieve quality?
ensures the right quantity and quality of raw materials or components of the production process
103
how does operations achieve quality
structures and manages manufacturing process
104
how does finance achieve quality?
ensures capital is available for appropriate investment
105
how does HR achieve quality?
ensures that labour is available in right quantities with right skills
106
how does marketing achieve quality?
provides market research info in order to identify what the customer wants to be satisfied
107
what is total quality management?
an operations management system that created structures within an organisation that satisfy internal and external customers and suppliers
108
why is tqm useful?
- management is confident that there is no need to check quality
- emphasis is put on preventing the production of poor quality products
109
what are the 5 methods of TQM?
- team working
- product design checking
- recognised standards
- benchmarking
- production control
110
1. what is team working?
team is responsible for production process such as conservatory installation
111
what are the benefits of team working?
- responsibility lies with team (team is empowered to check quality of raw materials, interact and check quality of finished product )
- can build trust and morale ( improves communication )
112
what’s a quality circle?
discussion group that meat regularly to :
-identify quality problems
- consider solutions
- recommend suitable outcome to management
( members drawn from different parts of business
113
what are the benefits of quality circles (3)
- improves current practices in. business making them more efficient
- introduces new ideas making a company for profitable
- motivated employees by including them
114
1. what is recognised standards?
2. give an example
1. achievement of these standards is an indication of the maintenance of quality
2. ISO 9000
115
1. what are the disadvantages of recognised standards?
- if low target levels are set, there’s no real guarantee of quality
- unless targets are related to external benchmarks, quality processes result in increased product orientation
116
what is benchmarking?
imitating the standards of an established leader in quality and attempt to better them
117
how can bench marking be carried out? (5)
1. identify what the business intends to benchmark
2. choose comps at to set benchmark against
3. gather information from a variety of sources, like trade association report, and analyse
4. use information and implement findings ( will require funding and monitoring )
5. monitor impact of implementations and evaluate
118
what is product design checking?
checking the total design of the product for quality, in addition to monitoring raw materials and components
119
give some examples of product design checking
- mercedes A class failed to reach independent test standards. problem was costly and damaged corporate image
- persil power washing powder was too powerful
120
what is production control?
method of ensuring that standards are set and processed designed to meet these targets are actually being used in the work place
121
what does production control involve? (4)
- monitoring costs through budgeting and variance analysis
- control of operation through critical path analysis and monitoring of individual processes
- supervision of output
- feedback methods ( customer feedback
122
what is quality control?
-the system of maintaining standards in manufacturing by testing a sample of the output against expected standards
- data is collected from sample and used to make judgments
123
1. what happened if standards have not been achieved with quality control?
2. what happened if too any failures to achieve these standards occur?
1. appropriate steps to achieve standards must be made
2. a plan must be devised to improve production process
124
what are the arguments for production being the most important department for quality? (3)
- manufacturing food requires consistent quality and cleanliness - if health regulations aren’t complied with, company may have bad rep
- producing the correct amount required by customers at the right time is vital as the food market is very competitive
-keeping production costs at a minimum is important in relation to profitability
125
what are the arguments against production being the most important department for quality? (4)
HR - people are a key aspect, trained, recruitment selection
Distribution ( ensured product gets the the right place at the right time in the right condition
Finance and Accounting- ensures money is managed efficiently and liquidity is remained
126
what is purchasing?
managing stock effectively, whether it is of raw materials, workin progress of finished goods
127
what are the key aspects of effective stock management? (3)
- ensures that stock is available for use within the manufacturing process as and when it is needed
- part finished goods don’t sit around unused and are brought to next stage asap
- finished goods are available for timely delivery to customers and are not made to early
128
what is the re order level in terms of stock control?
level of stock at which a new order is placed
129
1. what is re order quantity in terms of stock control?
2. how do you measure re order quantity?
1. the quantity ordered in order to return the stock holding to a maximum level
2. difference between min and max stock holding levels
130
what is lead time?
the amount of time that elapses between placing an order and the delivery of that order
131
1. what is buffer stock?
2. why is buffer stock used ?
1. the amount of stock held between the min stock holding and zero stock
2. incase of late deliveries or extra orders
132
what is JIT
a system designed to minimise the costs of holding stocks of raw materials, components, work in progress and finished goods
133
why is JIT useful for stock control?
- materials are delivered shortly before required and go straight into production line- no stick is held in sight
- products are not made unless order has already been placed
134
what are the problems with JIT?
- ordering and administration costs are likely to rise and advantages of bulk buying lost
- suppliers who don’t deliver on time can bring whole production line to a halt
135
what is computerised stock control?
(2)
- holding stock details on computer databases to improve efficiency and accuracy
- when quantity of stock decreases , databases are updated instantly, allowing accurate stock checks
136
what systems are there for effective stock management?
- effective relationships either suppliers and customers ( must comply with requirements, use EPOS system)
- effective internal relationships - must be a customer chain within manufacturing process. goods and parts are only supplied when they are needed in the next stage of production
137
what are the advantages of effective stock management? (5)
- reduction in working capital ( frees money for investment and improves liquidity since there is an opportunity cost of holding stock
- improved relationships with customers helping to guarantee ongoing orders
- frees up storage space releasing retail or manufacturing space
- easier stock rotation because stock is used shortly after delivery
- less stock wastage and discounting
138
why is stock control importance in terms of the consequences of not having enough stock?
- employees may have to be laid off or sent home if alternative work cannot be found
- orders may be met damaging rep
- orders may be cancelled and profits will fall
139
why is stock control important in terms of the consequences of holding too much stock? (5)
- high costs of insurance lighting refrigeration etc
- takes up space that could be more productively used
- opportunity cost of money being tied up that could be more effectively used elsewhere
- stocks can be damaged ( temperature, vermin ect)
-health and safety accident more likely
140
what are the outcomes of effective stock control (3)
- stock security
- stock in good condition
- monitor customer preferences
141
business unit 2
flashcards
Decks in class (4)
# Cards
