When you get more output for a given level of inputs.
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Equation for labour productivity
Labour productivity = output per period / number of employees.
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Relationship between labour productivity and labour costs
As labour productivity increases, labour costs fall.
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3 ways of increasing labour productivity
Improving worker motivation, training, new technology.
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2 disadvantages of high labour productivity
Rushing workers reduces quality, new technology can be very expensive
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What is lean production?
An efficient form of production which includes just-in-time (JIT), time based management and kaizen.
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What is JIT production?
JIT production aims to reduce wasted materials by having as little stock as possible.
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4 advantages of JIT
Reduced stock storage costs, improved cash-flow, less waste, more flexibility to changes in demand.
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2 disadvantages of JIT
Customers cant be supplied in production strikes, suppliers must be reliable due to lack of stock to maintain production.
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What is time based management?
This approach aims to reduce wasted time.
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2 advantages of time based management
Reduced lead times (customers get product faster, reduced stock holding costs), machinery with more than 1 function means a varied product range.
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What are the two types of technology businesses use and how do they work?
Robotic engineering (using robots as part of the manufacturing process), computer technology (Used in a variety of different ways, e.g. designing, communications and finance).
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What are the uses of robotic engineering?
Replaces human staff for dangerous, repetitive or boring tasks. Using robots is cheaper and faster than human workers.
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What is CAD?
CAD uses computers to design new products, or make alterations to existing onces
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What is CAM?
CAM uses comuters to produce a product, involving robots or computer numerically controlled machines.
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What is the use of 3D printing?
Can be used to produce a prototype.
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What is the use of computerised stock control?
Makes it easier to monitor when you need to order new stock, electronic point of sales uses bar-codes to let a business know if stocks are low and automatically order new stock.
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What are the advantages of using technology?
Increased productivity and quality, reduced waste, better communications both internally and externally, more affective marketing campaigns which target the right customer.
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Disadvantages of using technology?
High initial costs, requires expensive maintenance, requires increased staff training, replacing of manual work can result in redundancies.
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What is a capital intensive firm?
A business that uses more machinery with relatively few workers, usually larger firms.
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What are the advantages of a capital intensive firm?
Cheaper than manual labour in long term, more accurate production increases quality, machinery can work 24/7
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What are the disadvantages of a capital-intensive firm?
High set-up costs, machines suited to one task, fear of being replaced reduces worker motivation.
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What is a labour intensive firm?
A firm that uses more workers and less machinery, e.g. NHS.
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What are the advantages of labour intensive production?
Cheaper for small scale production, people are flexible and can be retrained, cheaper when labour costs are low.
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What are the disadvantages of labour intensive production?
People can be unreliable and can get sick, its harder to manage people, people cant work all the time and need breaks.
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Other cards in this set
Card 2
Front
What is efficiency?
Back
When you get more output for a given level of inputs.
Card 3
Front
Equation for labour productivity
Back
Card 4
Front
Relationship between labour productivity and labour costs
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