- Created by: nahhh
- Created on: 22-02-18 14:30
Stock control graphs
Objective is to maintain stock levels so that the cost of holding stock is minimised. Re order level is a trigger point as when stocks falls to this level the next order should be placed.Lead time is the time between placing order and recieveing stock. Buffer stock is the amount of stock held in contignecy just incase of unexpected orders, or supply delays
Factors affecting how much stock to re order
Lead time from the supplier is the amount of time it takes for supplier to deliver (higher lead time = higher re order level). Implications of running out is that stock outs are damaging so a higher reorder level is useful. Demand for product: higher demand = higher re order level.
Just in time
Just in time : A placed order signalls when a product should be mnaufactured.
A 'pull' system which enables firms to produce only what is required. This allows stock levels of raw materials are kept to a minimum. This means a carefully planned schedule and aflow of resources through the production process. Supply is delivered only when needed.
Advantages: A reduction in storage palces which saves money. Less wokring capital is tied up in stock as stock only got when needed. Less likley of stock perishing, becoming obselete or going out of date. Avoids build up of unsold finished product. Less time spent on checking the product as focus is on gettinf right first time
Disadvantages: Little room or mistake as min stock is kept for re-working faulty products. If stock isnt supplied on time then schedule can change. No spare finished products ready to meet unfinished orders. However JIT is a respoensive method of production.
Kaizen (continous imporvement): approach of constantly introducing small incremental changes to imporve quality and efficiency.
Approach assumes employess are best to identify the areas of imporvemnt as they see the process in action all the time. If a firm uses this approach they have to have a culture of rewards and encouragemnt towards employess for their contribution. Can operate at the level of an individual or thorugh Kaizen groups or qaulity circles. This approach is also compatible with cell production and team working.
Advanatges: As come from workers gonna be easier to implenemt as less radical. Less expensive as small changes. Improves work motivation as enocurages wokrers to take ownership.
Disadvatages: Managers cannot afford to overlook the need for radical change sometimes. Can be seen as unrelenting process. Some firms set targets for employees to give a certain number of ideas in a time period whihc cna be pressurising.
quality control : process of inspecting products to ensure they meet the required quality standards. objective: to ensure that the business is achieving the standards it sets itself.
It invovlves setting standards about how much variation is acceptable. Aim is to meet customer needs. It checks the qaulity of products. Quality inspectors tests a random smaple from each batch.
Methods of QC: Inspection,Statistical process control (the continious monitoring and chartering of a process while its operating)
Advanatges: Specially trained nspectorsso are able to find if fault eaiser.
Disadvanatges: Individulas are not encourages to take responsibilty for qualityof there work. Rejected product is expensive for firm.If defetcs are high the companys profitiabilty will suffer.
Quality Assurance: process that ensures production qaulity meets requiremnts of the customers Objective: achieve quality by organsising every process to geth the product right first time and prevent mistrakes ever happening. know as 'zero defect'. There is more emphasis on taking repsonsivility.
Advanatges: Costs are reduced.Help improve worker motivation.Break down 'us an dthem' barriers (eliminates feeling of being checked up on). Consistent level of qaulity so more sales.
TQM: aims to develop a qaulity culture throughout the firm. Consist of qaulity chains, where each person treats the recievr of their wokr as if they were an external customer.
Quality Benchmaarking allows to identify where it falls short of current best practice and determine action needed. Can provide a useful 'qaulity imporvement target'. Internal benchmarking is when the best practice may be set with reference to another deparment or similar factory.