Effectiveness

Achieving business objectives by producing goods or services that meet customer needs.

Efficiency

Maximising output from given inputs or using the least amount of resources to produce a given output.

Flow production

Continuous production of identical, standardised items, usually on an assembly line.

Inventory

The stock of raw materials, components, work-in-progress, and finished goods held by a business.

Job production

Producing a one-off, unique item to meet specific customer requirements.

Just in time (inventory management),

An inventory strategy where materials and components arrive exactly when they are needed in the production process.

Labour intensive

A production method requiring a higher proportion of labour compared to capital.

LeadTime

The time between placing an order and receiving the goods.

Lean Production

An approach to production that aims to use fewer resources and minimise waste while maintaining quality.

Process Innovation

Introducing significant changes to how a product is produced or delivered to improve efficiency or effectiveness.

Production

The process of turning inputs such as raw materials into finished goods or services.

Productivity

The output produced per unit of input, often measured as output per worker.

Reorder Level

The inventory level at which a new order should be placed to replenish stock before it runs out.

Total Costs

The sum of fixed and variable costs incurred in production.

Transformation Process

The method by which inputs are converted into outputs through the use of resources.

ValueAdded

The difference between the selling price of a product and the cost of bought-in materials and components.

Sustainability

Managing resources and operations to meet current needs without compromising future generations' ability to meet theirs.

Mass Customisation

The use of flexible production systems to produce customised products at scale.

Just in Case (Inventory Management)

A strategy where a business holds large inventories to minimise the risk of stockouts.

Supply chain management

The coordination of all stages in the production and distribution process, from raw materials to final delivery.

Capacity Utilisation

The percentage of a firm’s total production capacity that is actually being used.

Outsourcing

Contracting another business to carry out part of the production or service process instead of using in-house resources.

Quality Control

Inspecting the quality of products during or after production to identify and correct defects.

Quality Assurance

A system of setting and maintaining quality standards throughout the production process to ensure consistent output.

Kaizen

A continuous improvement approach involving all employees suggesting and implementing small, regular changes to improve quality and efficiency.

Benchmarking

Comparing business performance metrics or processes with industry best practices to identify areas for improvement.

Productivity Rate

A measure of output per unit of input, often used to evaluate the efficiency of labour or capital.

Economies of Scale

Cost advantages gained when a business increases production, leading to lower average costs per unit.

Diseconomies of Scale

Rising average costs that result from a business growing too large and becoming inefficient.

Break-even Output

The level of output at which total revenue equals total cost, resulting in no profit or loss.

Contribution per Unit

The amount of revenue from each unit sold that contributes to covering fixed costs and generating profit.

Computer-Aided Design (CAD)

The use of computer systems to create, modify, and optimise product designs.

Computer-Aided Manufacturing (CAM)

The use of computer-controlled machines and software to automate the production process.

Location Decision Factors

Factors such as proximity to markets, availability of labour, infrastructure, and costs that influence where a business chooses to locate.

Optimal Resource Allocation

Using resources in the most efficient and effective way to maximise output and minimise waste.

Stock Turnover Ratio

A measure of how often a business sells and replaces its inventory in a given period.

Lead Time Buffering

Holding extra inventory or adding time to delivery schedules to protect against supply chain disruptions.

ISO Quality Standards

International standards that define the criteria for quality management systems and processes.

Reverse Logistics

The process of managing the return of goods, including handling returns, recycling, and disposal.

Fixed Costs

Costs that remain constant regardless of the level of production or sales, such as rent or salaries.

Variable Costs

Costs that vary directly with the level of output, such as raw materials or packaging.

Operational Flexibility

The ability of a business to adapt its production levels, methods, or products quickly in response to changes in demand.