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Operations Management - Intro. Which are the world’s top manufacturing countries? Who are the world’s top manufacturers? Who are the UK’s top manufacturers? How much money do you think the UK industry generates in a year? How many local manufacturers can you name? . 5. Operations Management. - PowerPoint PPT Presentation
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5.1 Production Methods for Growing Businesses
Operations Management - Intro•Which are the world’s top manufacturing
countries?•Who are the world’s top manufacturers?•Who are the UK’s top manufacturers?•How much money do you think the UK
industry generates in a year? •How many local manufacturers can you
name?
5. Operations Management5.1 Production Methods for Growing Businesses
5.1 Production Methods for Growing Businesses
Fold
Glue Crease
Plain Card
Pallet Print
Dry Cut
Rearrange these steps to form a production process for making a cardboard box
Revisiting unit 1•In unit 1 you looked at small businesses
which were producing on a small scale▫Can you remember the 2 production
methods that were used? Making each item individually Groups of items all passing through each
stage of the production process together•In unit 2 you are looking at larger
business who are now producing goods on mass and hence can use FLOW production
Flow production leads to greater efficiency
5.1 Production Methods for Growing Businesses
5.1 Production Methods for Growing Businesses
•In this topic you will learn about:
▫Use of flow production
▫Efficient production methods
▫Lean production techniques
5.1 Production Methods for Growing Businesses
5.1 Production Methods for Growing Businesses
Methods of Production Production Type
Advantages Disadvantages Suited To
Job Production
Batch Production
Flow Production
Unit 1 - Methods of production• Job production
▫The production of one off items to meet the needs of each individual customer
▫Cheap and easy to set up, but more expensive to produce
▫Often a specialist service▫Time consuming to produce▫Meet specific needs of customers▫Examples include:
Tailor made clothes Specialist cakes Web designs
5.1 Production methods
Can you explain why using job production may allow a firm to charge higher prices?
What combination of
manual work and machinery are
involved?
Unit 1 - Methods of production• Batch Production
▫Identical items are produced in groups (batches), each item passing through the production process at the same time
▫Allows for cheaper and quicker production of individual items
▫More uniform products ▫Variation can be achieved in different
batches▫Examples include:
Bread Jeans Garden furniture
5.1 Production methods
What are the stages involved
in making crayons?
Why are they made a colour at
a time?
Unit 2 – Operations Efficiency•In unit 2 you are looking at larger
business who are now producing goods on mass and hence can use FLOW production
Flow production leads to greater efficiency More efficient use of resources and division
of labour
5.1 Production Methods for Growing Businesses
Unit 2 - Flow Production•Items flow along the production line in a
continuous process•Suitable for mass production
▫Large scale▫Identical items
•Uses specialist machinery•Workers are each responsible for a small
step along the process, this involves▫Specialisation▫Division of Labour
5.1 Production Methods for Growing Businesses
Identify the stages involved
in making a world cup football
Flow ProductionAdvantages Disadvantages
• Efficient process due to▫Specialisation of
workers▫Division of labour▫Use of machinery
• Low cost per unit• Consistent quality• Continual output leading
to less need to hold stock
• High initial costs▫Machinery▫Computers▫Training
• Mistakes or problems can shut down whole process
• Repetitive work leading to low motivation
• Standardised products only
5.1 Production Methods for Growing Businesses
How would you feel working on a production line?
5.1 Production Methods for Growing BusinessesMethods of Production
Production Type Advantages Disadvantages Suited To
Job Production •Meets exact customer requirements•Workers have varied jobs•Can charge higher price
• Often requires skilled labour•Expensive• High element of manual work (labour intensive)
•Tailor made clothes•Cakes•Construction (e.g schools)•Musical instruments•Web designs• Bespoke computer programs
Batch Production •Flexible way of working•Gives variety to jobs•More efficient than job production •Produces identical batches
• can still be expensive•Warehouse space needed for stocks of raw materials & components
• bread making• jeans• crayons• some furniture
Flow Production •Efficient process•Lower costs = lower prices (economies of scale)• May use more equipment to make production more efficient•Goods produced quickly and cheaply•Produces identical items
•Only feasible for large scale production•Requires high investment in equipment (high capital costs)•Machine malfunction can halt production• Boring for workers
• Car manufacture• televisions• packaged foods• any mass produced product
The type of production used is decided by DEMAND and the industry
Job or Batch
5.1 Production methods
Nathan runs a small but popular smoothie bar near to Exeter University. He prides himself on the fresh nature of his products. Each smoothie is made to order with the customer choosing up to 3 fruits to design their own. At busy times, Nathan has a queue outside the door, but he knows that some customers take one look at the queue and walk off. He charges between £2 to £3 per smoothie at the moment. His girlfriend, Camilla, is studying business at the University and suggests he would be better to move to batch production and lower his prices slightly. She believes this way he could cut costs, increase sales and make a greater profit.
Question time1.What is meant by the term ‘batch production’? (2 marks)2.Explain 2 advantages of Nathan’s current production method? (4 marks)3.Do you think that Camilla is correct to suggest Nathan switches to batch production? Justify your answer.(9 marks)
Top Tricycles LtdTop Tricycles Ltd are a leading manufacturer of children’s tricycles. All the Tricycles are built using flow production. They all pass along the same production line in an identical way and then just at the final stage of the process are split into different lines where they are sprayed and transfers added. Their current models include Bob the Builder, Dora and Pixie. Each worker is allocated a small, specific task e.g. attach pedal which they become specialists at. The production supervisor has suggested rather than specialising workers should be trained to complete a number of different tasks and then move around the process every hour or two.
Question Time1. What is meant by the term ‘flow production’? (2 marks)2. Explain two benefits of flow production to Top Tricycles Ltd (5 marks)3. Explain two drawbacks of flow production to Top Tricycles Ltd (5
marks)4. Recommend to the production director of Top Tricycles Ltd whether or
not they should adopt the supervisors suggestion of training workers in more than one area of specialisation. Give reasons for your answers. (9 marks)
5.1 Production Methods for Growing Businesses
Specialisation and Division of Labour•Check your understanding
▫What is meant by the term specialisation?▫What is meant by the term division of
labour?▫How do specialisation and division of
labour impact on the efficiency of a firm? Positive impacts? Negative impacts?
5.1 Production Methods for Growing Businesses
Lean Production•What does the word
lean mean?•What does it mean if
we refer to a person as lean?
•What does it mean if we like meat to be lean?▫What has been cut
off?▫What happens to
this?
5.1 Production Methods for Growing Businesses
Jack Sprat could eat no fat
His wife could eat no leanAnd so betwixt the two of
themThey licked the platter
clean
Jack ate all the lean,Joan ate all the fat.
The bone they picked it clean,
Then gave it to the cat
Lean Production Techniques• Techniques that can be used to increase the efficiency
of a firm and reduce costs• Reduces the waste of resources within a production process• Techniques include:
▫Just in Time Reduces the holding of stock so materials are delivered just
in time to be used and products completed just in time to send to the customer
▫Kaizen (Continuous Improvement) Striving to make small but frequent improvements with the
help and commitment of all employees
5.1 Production Methods for Growing Businesses
Draw a diagram to show the costs of holding stock
Could you apply this concept to your own life? Would this be better than a New Year’s Resolution?
Just in Time• Stock holdings are kept at zero or a minimum
▫Money saved from not holding stock can be used elsewhere in the business
▫Stock will not become old, damaged or no longer of value• Good relationships with suppliers are required
▫Need to know they will deliver the correct quantity and quality on time
▫Need them to be able to respond quickly to any changes in demand
• However▫What if materials don’t arrive on time?▫What if the customer wants the product now?▫What if it costs more to buy small but frequent amounts
from suppliers?▫ What if there is an unexpected rise in demand?
5.1 Production Methods for Growing Businesses
Some firms prefer to hold stock just in case!
Kaizen (Continuous Improvement)• Involving all workers in trying to make small but
frequent improvements▫Spotting and suggesting small things that could be
done better• Lots of small improvements can add up to a big cost
saving over time• Easier to implement than the management
suggesting and making big changes• Relies upon the commitment of all employees and
managers willingness to listen to ideas• May involve Kaizen Groups
▫Teams of workers from different levels in the business working together to achieve change
5.1 Production Methods for Growing Businesses
Kaizen in action – group activity• In teams look at a process that takes place
within your school or college e.g. Serving of dinner in the canteen, process for reports to parents or parents evening, buses etc
• Identify what is good about the process and if there are any areas for improvements
• Look for a number of small changes that could be easily introduced but would improve the efficiency and/or reduce waste
• Make a brief presentation explaining the recommended changes and how they could be easily implemented
5.1 Production Methods for Growing Businesses
Lean Production•Both JIT and Kaizen will effect the
employees:▫Training
Build relationship with suppliers Manage stock inflows and outflows Spot areas for improvement Explain areas for improvement Adapt to small but frequent changes
▫Motivation Greater involvement Ability to make a difference Team work Reduced inefficiency
5.1 Production Methods for Growing Businesses
Top Tricycles LtdTop Tricycles Ltd currently orders materials from its suppliers once per month so at the beginning of each month the warehouse is restocked and full with the number of components slowly reducing over the month until in the last few days production can be stopped if for some reason there is lack of one or more components. They produce an equal amount of tricycles each month although demand is significantly higher at the start of summer and in the run up to Christmas. The production supervisor has convinced management to implement a system of job rotation, so workers will have a greater variety of tasks to do throughout the day. This has led to less mistakes and higher productivity. He is now suggesting that they make further improvements by introducing lean production techniques.
Question time1. What is meant by ‘lean production techniques? (2 marks)2. Explain two reasons why the introduction of job rotation may have led
to increased efficiency at Top Tricycles Ltd. (5 marks)3. Recommend to the operations director whether a system of JIT or
Kaizen would be the most appropriate to Top Tricycles Ltd. Give reasons for your answer. (9 marks)
5.1 Production Methods for Growing Businesses
5 Minute Test (Starter)•Define Operations Management (2)•What is flow production? (2)•State one advantage of flow production (2)•What are two terms used when workers
perform small tasks that they become expert at? (2)
•What is lean production? (2)•Name two lean production techniques (2)End