Benefits of high labour productivity and efficiency
Can maximise production therefore satisfying customers, Reduces uint costs due to fewer inputs needed, Lower unit costs can give a competitive advantage, Increase its appeal to stakeholders, and the costs saving can be used to improve quality.
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How to increase efficiency and labour productivity
Using renewable or recyclables resources, greater training and education of the workforce, increasing the level of investment in capital equipment, improvements in management skills, and it can leads to economies of scale
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Define economies of scales
The advantages that an organisation gains due to an increase in size. These cause an increase in efficiency and also tend to improve labour productivity.
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Examples of economies of scales
Technical, specialisation, purchasing, marketing, financial, research and development, social and welfare, managerial and administrative
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Define diseconomies of scales
The disadvantages that an organisation experiences due to an increase in size. These cause a decrease in efficiency and/or an increase in unit costs of production.
Capital-Intensive Production=Methods of production that use a high level of capital equipment in comparison to inputs, such as labour. Labour-Intensive Production=Methods of production that use high levels of labour in comparison to capital equipment
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Factors influencing the choice between capital intensive and labour intensive production?
Methods of production, skills and efficiency of the factors of production, relative costs of labour and capital, size and financial position of a business, customers, and product or service.
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What is the importance of capacity?
Enables them to meet the level of demand, firms capacity allows some flexibility between production lines, competition affects capacity, some industries need to ensure that they have a plan to cope with high periods of demand.
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How to utilise capacity efficiently?
Needs to among under-utilisation of capacity (when a firms output is below the max possible) and capacity shortage (when capacity is not large enough to deal with the level of demand for the product).
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Why does spare capacity occur?
New competition or new products entering the market, fall in demand for the product, seasonal demand, over investment in fixed assets, or due to a merger or takeover.
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Advantages and disadvantages of spare capacity?
A-More time for maintenance, Less pressure&stress on employees, Allows them to cope with sudden increase in demand. D-Have a higher proportion of fixed costs per unit, Negative image of a firm, Employees can become demoralised and bored.
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Ways of reducing capacity?
Selling off all or a part of its production area, laying of workers, and changing to a shorter working week or shorter day.
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Ways of increasing capacity?
Building or extending factories, asking staff to work overtime or longer hours, hiring new staff, flexible workforce, outsourcing or subcontracting and transferring resources from another area.
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Define lean production and its techniques
Production based on a range of time-saving and waste-saving measures inspired by Janapense manufacturing companies. Techniques- JIT Manufacturing, Kaizen, TQM
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Define Just in Time manufacturing
Organises operations so that items of stock delivery arrive just at the time they are needed for production or sale. It aims to eliminate the need for stock to reduce waste. Enables a business to reduce costs by cutting warehouse space etc.
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Benefits of JIT as a method of lean production
Increasing productivity, more motivated workforce, increase worker participation, reduced waste and inventory holding costs, and higher quality&greater variety of products.
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Difficulties of JIT as a method of lean production
Fewer opportunities for bulk buying, halts production if a supplier fails to deliver, undetected product faults can arise, need suitable equipment, reliable&flexible workforce are required.
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Name the different types of technology used in operations management
Robotics, automation (use of machinery to replace HR), planning, operating process, controlling, stock control, communications,design (CAD), employment.
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Benefits of using technology in operations
Reducing costs, improving quality, reducing waste, increasing productivity, and flexibility.
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Difficulties of introducing and updating technology
Resistance to change, lower morale (job losses may be involved), cost (expensive, and needs regular updating&servicing), keeping up with change (hardware and software is constantly needing updates).
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Other cards in this set
Card 2
Front
Benefits of high labour productivity and efficiency
Back
Can maximise production therefore satisfying customers, Reduces uint costs due to fewer inputs needed, Lower unit costs can give a competitive advantage, Increase its appeal to stakeholders, and the costs saving can be used to improve quality.
Card 3
Front
How to increase efficiency and labour productivity
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