Location
Business Management 4
Factors that affect location
International Factors
Labour Cost (wages)
Land Cost ( used for operations?
Company history
Government assistance
External Economies of scale
Transportation and other infrastructure
Introduction
Shared Economies of Scale
Skilled labour - manufacturing Asia, northern Mexico Shared infrastructure- highways, pipelines Access to suppliers- ski shops, Improved image- Made in Milan, Made in USA
Introduction
Reorganising production
In which scenarios should companies reorganize their production?
Here
Outsourcing/subcontracting
offshoring
Insourcing
Reorganizing Production
Outsourcingsubcontracting
An external company that is hired to carry out a task on behalf of another company. The process of hiring the external company. Apart from the cost-saving potential, many companies use subcontractors because it allows them to concentrate on their core business.
Insourcing
Ending contracts with external suppliers to undertake previously outsourced business functions. Reputation matters enough to bring operations back "in-house". The need to keep hold of commercial secrets Outsourcing has not proved as beneficial or cost saving as predicted.
Offshoring
The relocation of a business function to another country/overseas Companies can make significant gains in both cost and productivity.Communication and transportation will be made more difficult. Countries and regions specialised comparative advantages: -Research and development in the UK
-Consumer electronics assembly in South East Asia
-Clothing production in Bangladesh
-ICT call centres in India.
Offshoring
Reshoring?
DISADVANTAGES ASSOCIATED WITH SUBOPTIMAL LOCATIONS
Clustering
A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. Increase in productivity.
5.5Production planning
Business Management IV
Introduction
Supply Chain
Supply chain management is the process of working with all these suppliers in an attempt to maximise efficiency and deliver the maximum possible value to the final consumer. Aspects to consider:Cost ReliabilityProduct Quality Lead times
Introduction
Supply Chain
Supply Chain
Cost: economies of scale ->small number of suppliers with more components Reliability: consistency and keeping promises. If a delivery is late or incorrect, the entire production line could be stopped. Product quality: meeting an agreed standard. Poor quality components: fall in overall product quality and a loss of reputation. Lead times: how long it takes for a supplier to make a delivery.(weeks-hours)JIT
JIT vs JIC
Stock Charts
Maximum stock level – the total amount of inventory a firm wishes to hold, using current storage facilities.
Buffer stock level – stock that is held just in case there is an unexpected order or late delivery. Buffer stock is a backup so that customers’ needs can still be met if something unforeseen occurs.
Lead time – how long it takes a supplier to fulfil an order; the difference between when an order is placed and when it is delivered.
Re-order level – the point when new stock is ordered from a supplier. This will take into account the lead time and buffer stock level.
Re-order quantity – the amount of stock that is ordered from a supplier.
Operations management calculations
Unit costs (average costs)= the average cost of making one unit of output.Unit costs: Total cost / Output = $_______ Productivity rate=is a measurement of the efficiency of resources used in the production process. Productivity rate: Total output / Total input × 100 = __ units of production Labour productivity is the average output per worker for a given time period (given in number of units of output). Labour prod: Total output / Total number of workers = __ units of prod.
Here
Improve training and staff motivation
Improve management techniques
Increase use of technology
How to improve productivity
Operations management calculations
Capacity utilisation = the percentage of a firm’s total capacity that is currently being used. Capacity utilisation rate: Actual output / Productivity capacity × 100 = __ %
Operations management calculations
Cost to buy= the total cost of subcontracting production to a supplier. Cost to buy: Price × Quantity = $______ Cost to make= the total cost of prod if manufacturing is kept in-house. Cost to make: Fixed costs + (Variable costs × Quantity) = $______
Location
Paola Rodriguez Escobedo
Created on February 9, 2022
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Transcript
Location
Business Management 4
Factors that affect location
International Factors
Labour Cost (wages)
Land Cost ( used for operations?
Company history
Government assistance
External Economies of scale
Transportation and other infrastructure
Introduction
Shared Economies of Scale
Skilled labour - manufacturing Asia, northern Mexico Shared infrastructure- highways, pipelines Access to suppliers- ski shops, Improved image- Made in Milan, Made in USA
Introduction
Reorganising production
In which scenarios should companies reorganize their production?
Here
Outsourcing/subcontracting
offshoring
Insourcing
Reorganizing Production
Outsourcingsubcontracting
An external company that is hired to carry out a task on behalf of another company. The process of hiring the external company. Apart from the cost-saving potential, many companies use subcontractors because it allows them to concentrate on their core business.
Insourcing
Ending contracts with external suppliers to undertake previously outsourced business functions. Reputation matters enough to bring operations back "in-house". The need to keep hold of commercial secrets Outsourcing has not proved as beneficial or cost saving as predicted.
Offshoring
The relocation of a business function to another country/overseas Companies can make significant gains in both cost and productivity.Communication and transportation will be made more difficult. Countries and regions specialised comparative advantages: -Research and development in the UK -Consumer electronics assembly in South East Asia -Clothing production in Bangladesh -ICT call centres in India.
Offshoring
Reshoring?
DISADVANTAGES ASSOCIATED WITH SUBOPTIMAL LOCATIONS
Clustering
A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. Increase in productivity.
5.5Production planning
Business Management IV
Introduction
Supply Chain
Supply chain management is the process of working with all these suppliers in an attempt to maximise efficiency and deliver the maximum possible value to the final consumer. Aspects to consider:Cost ReliabilityProduct Quality Lead times
Introduction
Supply Chain
Supply Chain
Cost: economies of scale ->small number of suppliers with more components Reliability: consistency and keeping promises. If a delivery is late or incorrect, the entire production line could be stopped. Product quality: meeting an agreed standard. Poor quality components: fall in overall product quality and a loss of reputation. Lead times: how long it takes for a supplier to make a delivery.(weeks-hours)JIT
JIT vs JIC
Stock Charts
Maximum stock level – the total amount of inventory a firm wishes to hold, using current storage facilities. Buffer stock level – stock that is held just in case there is an unexpected order or late delivery. Buffer stock is a backup so that customers’ needs can still be met if something unforeseen occurs. Lead time – how long it takes a supplier to fulfil an order; the difference between when an order is placed and when it is delivered. Re-order level – the point when new stock is ordered from a supplier. This will take into account the lead time and buffer stock level. Re-order quantity – the amount of stock that is ordered from a supplier.
Operations management calculations
Unit costs (average costs)= the average cost of making one unit of output.Unit costs: Total cost / Output = $_______ Productivity rate=is a measurement of the efficiency of resources used in the production process. Productivity rate: Total output / Total input × 100 = __ units of production Labour productivity is the average output per worker for a given time period (given in number of units of output). Labour prod: Total output / Total number of workers = __ units of prod.
Here
Improve training and staff motivation
Improve management techniques
Increase use of technology
How to improve productivity
Operations management calculations
Capacity utilisation = the percentage of a firm’s total capacity that is currently being used. Capacity utilisation rate: Actual output / Productivity capacity × 100 = __ %
Operations management calculations
Cost to buy= the total cost of subcontracting production to a supplier. Cost to buy: Price × Quantity = $______ Cost to make= the total cost of prod if manufacturing is kept in-house. Cost to make: Fixed costs + (Variable costs × Quantity) = $______