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Unit 5Operations Management
Production Methods
Learning Objectives
To describe and compare the features and applications of job, batch, line, flow and mass production
Production Process Explained
• A firm must purchase all the necessary inputs and then transform them into the product (outputs) that it wishes to sell
• How well organised a firm is at undertaking this transformation process will determine its success. This is known as the productive efficiency of a firm and it will want to be as efficient as possible in transforming its inputs into outputs
• Ultimately, the objective of the production process is to create goods and services that meet the needs and wants of customers. The needs and wants of customers will be met if a business can produce the correct number of products, in the shortest possible time, to the best quality and all at a competitive price
Main inputs into production‘Factors of production’
• Land & raw materials• Labour – workforce• Capital – machines and equipment• Enterprise – ideas, organisation and
willingness to take a risk over a product
Things to consider when producing goods
• The cost of production
• The quality required
• The quantity needed
• What customers want
Main types of production
• Job production• Batch production• Flow production• Mass production• (Mass customisation)• Cell production (HL ONLY)
Job Production• One-off or small number of items produced• Normally made to customers specifications (e.g.
wedding cake or building project)• Often undertaken by small, specialist businesses• Examples:– Architects– Plumbers– Ship builders– Road builders
Advantages & disadvantages of job production
Advantages
• Products are usually high quality• Products are made to measure• Workers gain more satisfaction from seeing the finished
product• Workers are well motivated & take pride in their work
Disadvantages
• High cost of production• Skilled labour is more expensive, but is required to carry out
the task• Selling prices are higher because it is labour intensive• Goods take a long time to make and it is difficult to speed up
production
Batch Production
• What is involved– Similar items are produced together– Each batch goes through one stage of production process
before moving onto next stage– Example: a furniture factory that makes 20 chairs, then 10
bookcases, and then 15 dining tables • Aims– Concentrate skills, workers each specialise in one job– Achieve better use of equipment and so produce good
quality products more economically than manufacturing them individually
Advantages & disadvantages of batch production
Advantages
• Customers different demands can be met• As goods are made for a specific customer, the cost of storing
finished goods will be reduced• Use of specialist machines and automation reduce costs
Disadvantages
• It takes time to switch machinery from one setting to another - this increases costs
• Components for different jobs may need to be stored – this increases costs
• Tasks may be repetitive and boring, demotivating workforce
Flow Production• What it involves– Producing large numbers of goods continuously – Product moves continuously through production process– Usually on a conveyor belt. Called line production– When one task is finished next task must start
immediately– High level of automation & little manpower. This is
called capital intensive– Examples – Cars, Computers, chocolates
Advantages & disadvantages of flow production
Advantages
• Large amounts can be made• Economies of large-scale production = lower unit cost• Machinery & automation can be used• Improved use of technology has allowed variations in designs to be pre-
programmed into machines• Continuous, often 24-hour production is possible
Disadvantages
• May not be high quality• Expensive to set up• Stock costs may be high as a lot of parts may have to be stocked to keep
production going• A problem at any point on the production line may cause a total shut
down• Jobs may be repetitive and boring causing demotivation amongst
workforce
Mass Production
• What it involves– Large scale production where a business produces
large numbers of same item– Little, if any, “customisation” of product
• Typical features– A standard product (little or no variation in style or
quality)– Using standard parts– Built using standard equipment e.g. washing
machines
How to deicide which method to chose
• This depends on a number of factors– The amount likely to be sold– The nature of the product to be made– What the costs will be– The variety of goods expected by the customer
Production and Seasonal Demand
• Changes in seasonal demand can mean a requirement for:– Lots of stock at particular times of year & little demand at other times– E.g. demand for children’s toys is heavily-focused on pre-Christmas
period• Implications for producers
– May make sense to “build for stock” during periods of quiet demand– Make use of production equipment that would otherwise lie idle
• Produce of perishable products– Here, production process needs to be designed flexibly– Additional production capacity can be added when close to time when
demand increases (e.g. bring in more part-time, temporary employees)
Task
• For each of the following products decide which would be the most appropriate method of production. Explain your reasons in each answer– Tubs of different types of ice-cream– Tins of baked beans– Dental care– Pairs of trainers– Baking loaves of bread– A jeweller making an exclusive tiara
Cell Production
• What it involves– Splitting flow production into self contained groups
that are responsible for whole work units– A form of flow production– Every cell has a team leader
• Typical features– A standard product (little or no variation in style or
quality)– Using standard parts– Built using standard equipment e.g. washing machine
HL
Task - Video case smart production
