Business Management HL - Chapter 5

Cell

1 or a group of employees who work on a single part of the production process

Lean Production

A Japanese approach to operations management focusing on less waste and greater efficiency.

Innovative Creativity

A form of creativity that generates new forms of thinking, addressing problems from an unusual perspective.

Adaptive Creativity

A form of creativity that transfers and applies existing forms of thinking and problem solving to new scenarios or different situations.

Research and Development

A form of innovation directly associated with the technical development of existing products or processes, or the creation of new ones.

Quality Circles

A formal group of volunteers (employees from different departments) who meet regularly to discuss ways to improve quality.

Capacity Utilisation Rate

A measure of the efficiency of a facility.

Productivity Rate

A measure of the efficiency of production.

Kaizen

A method of lean production based on continuous improvement

Just in Time

A method of stock control which means avoiding holding stock by being able to get supplies only when necessary and to produce just when ordered.

Cradle to Cradle Design

A new approach to design and manufacturing based on principles of sustainable development, especially recycling.

Quality Standards

A standard that an organisation aims to meet in order to receive national or international quality certification, which boosts the business's reputation.

Kanban

A system of messages (written or electronic) to help manage production flow.

Andon

A system of signals and alerts informing workers of a problem that requires immediate attention. The idea behind it is that when a problem occurs, co-workers are alerted and come to help fix the problem as quickly as possible.

Benchmarking

A tool for businesses to compare themselves to their competitors in order to identify how they can improve their own operations and practices.

Contingency Planning

An organization's attempts to put in place procedures to deal with a crisis, anticipating it through scenario planning.

Bulk Decreasing

Buying lots of large components to build small products, (E.g. Slaughterhouses)

Bulk Increasing

Buying lots of small components to build one big product, (E.g. Car manufacturers)

Process Innovation

Improving the production process through innovation. E.g. Automation.

Paradigm Innovation

Innovation that affects the entire industry in which it is applied. E.g. Airlines as a luxury service

Positioning Innovation

Involves 'repositioning' or 'rebranding' a product. E.g. Coca Cola from medicine to drink

Product Innovation

Involves creating new products or improving existing products. E.g. Apple

Total Quality Management

Involves the entire organisation and kaizen, kanban and andon strategies to ensure efficient and high-quality production.

Quality Control

Involves the use of one person whose job is to regulate the quality of products. E.g. Setting quotas

Cost to Buy and Cost to Make

One key business decision is whether to buy or make certain products that will be used in production.

Mass Production

Production of a high volume of identical, standardised products, usually through unskilled labour. Eg. Coca Cola

Batch Production

Production of groups (or batches) of identical products with an emphasis on quality and affordability. E.g. Cars

Supply Chain Process

Refers to the wide system of connected organisations, information, resources and operations that a business needs to produce goods and provide services to its customers.

Cannibalistic Marketing

Setting up more than one branch in a location even though they eat up profits from one another.

Ecological Sustainability

The need to take ecological factors into account when making operating decisions (especially about nature and ecosystems).

Social Sustainability

The need to take human factors into account, both internally (e.g. workers) and externally (e.g. local communities), when making operating decisions.

Job (Customised) Production

The production of a 'one-off' product that is tailored exactly to the customers needs. E.g. Wedding Cake

Crisis Management

The systematic steps and efforts by the organisation to limit the damage from a sudden crisis.

Just in Case

The traditional method of stock control which means holding reserve of both raw materials and finished products in case of a sudden increase in demand (or a problem in the supply chain).

Cellular Production

This is a form of mass production in which the flow is broken up by teams of workers who are responsible for certain parts of the line.

Economic Sustainability

To ensure that the operations are economically viable and sticking to a budget.

In-housing

When a business returns a previously sub-contracted production process back into the control of the business.

Quality Assurance

When every member of the business is made responsible for maintaining the high quality of production. E.g. 100% of products are useable.

Factors to Consider when Choosing the Location of Production

• Costs - The size of the land and type of labour force will affect the cost • Travel Distance • Competition - There should be a balance between finding a gap in the market but not being too far away from competitors. • Type of Land - Climate and agriculture may affect the appropriateness of a piece of land • Markets - The business may be purely online and may only need an efficient distribution system • Familiarity - Setting up in a familiar area is beneficial as the owner already knows local networks • Labour Pool - The business should consider the demographics of the area and the type of labourers they need, e.g. If they need university students, set up closer to a university • Infrastructure - Transport and electronic networks and facilities should be taken into account • Suppliers - There should be a range of reliable and available suppliers nearby • Government - Laws and taxes

Pull (External) Factors for Offshoring

• Improved Communications • Dismantling of Trade Barriers • Increasing Size of MNC's

Factors that Influence R&D

• Organisational Culture • Past Experience • Technology • Pace of Change of the Industry • Incentive from Competition • Finance • Legal Constraints • Ethical Concerns

Push (Internal) Factors for Offshoring

• Reduced Costs • Increased Market Share • Can be an Extension Strategy

Features of C2C Design

• The reutilization of the material itself (recycling, strictly speaking) • The amount of energy necessary for the recycling process, ideally renewable energy • The amount of water needed as part of the recycling process • The corporate social responsibility (CSR) of the company, for instance about fair labour practices.

Factors that affect Crisis Management

• Transparency • Communication • Speed • Control