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PRODUCTION METHODS (SL). UNIT 5: OPERATIONS MANAGEMENT. Introduction to Production Methods. Every business is a producer of something.
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PRODUCTION METHODS (SL) UNIT 5: OPERATIONS MANAGEMENT
Introduction to Production Methods • Every business is a producer of something. • When we think of production we tend to imagine big factories with long lines of sophisticated machines, but it is worth bearing in mind that production can take a variety of forms. • There are the large scale capital intensive production lines such as oil refineries or car plants. • However, a web browser, an airline or even a beach resort is a business with an end product too. • The art of managing production, to get the best end product is called operations management.
Types of Products • Production is typically described as the creation of physical products (goods) or non physical products (services)
PRODUCTION METHODS There are four main production methods: • Job • Batch • Mass/Flow/Line • Cell
Job Production • This is the production method normally associated with the top end of the market, where the emphasis is on quality and the producer can charge premium prices. • Products are market oriented with the client decided precisely what the product should be. • Some of the features of job production are the need for clear objectives and careful planning, which means there may be a longer development phase of the product life cycle.
Job Production • The client may require and expect greater consultation during the process and even after the product has been created. • It is likely the same format would be inappropriate another time. • The can add to the time taken to produce the product as there may not be a successful “blueprint” to use.
Advantages of Job Production • The mark is up is likely to be high. • Clients get exactly what they want. • This production method is likely to motivate skilled workers working on individual projects. • It can be a flexible production method. • A special relationship can be developed with trend setters or role models.
Disadvantages of Job Production • This production method can be expensive, requiring skilled workers and non-standardized materials. • It is likely to be time consuming as there is much more consultation with the client than when using other production methods. • There is the possibility the product might fail, because of the lack of knowledge of the client, but this may reflect badly on the business. • This method can be very labor intensive and reliant on skilled workers.
Batch Production • This is a production method normally associated with the middle of the market where the emphasis is on quality and affordability. • Products are still market oriented. • Customers are offered customized products, but using a range of standardized options. • This method of production requires careful planning as the components of the product need to be interchangeable. • Some consultation will need to be made with customers as their needs have to be taken into account, although the exact options may be limited.
Advantages of Batch Production • Using this production method businesses can achieve Economies of Scale. • Examples of Economies of Scale • A small French manufacturer making savings on its budget for certain components by bulk buying. • South African safari lodges making external savings by pooling resources.
Advantages of Batch Production • Batch production allow customers more choice and so captures more market share. • The producer will be more organized when routing through the factory compared with a product manufactured using job production. • The method can be useful for trialing products. • Using this method it may be possible to deal with unexpected orders.
Disadvantages of Batch Production • Businesses may lose production time as machines are recalibrated and or retooled. • This is known as down time. • Businesses may need to hold large stocks of work in progress. • The size of the batches are dependent on the capacity of the machinery (or labour) allocated to them.
Mass Production or Flow Production • Businesses produce a high volume of standardized products using a continuous flow of raw materials along an assembly line. • For this reason, it is also known as line production too. • This is perhaps our typical idea of a factory with long conveyor belts routing the product through the different stages of production, without any pause in the whole process. • There is a good argument for the automizationof this method of production. • Machines don’t need toilet breaks and can be relied on to produce the same standard every time they are set.
Mass Production or Flow Production • Mass production requires careful planning in order to synchronize all stages of the production process. • This production method may well run a critical path analysis to calculate the right order of activities • For the process to be viable, the production must be driven by large reliable orders for the final product.
Mass Production or Flow Production Set Up Costs • There is likely to be a large sunk cost in setting up this method. • This investment must be recouped by selling a high volume of standardized products. • The product is therefore sold at the low end of the market and in large quantities.
Advantages of Mass Production • Once set up, the system needs little maintenance. • The business can cater for large orders and so achieve economies of scale. • Labour costs may be low as the jobs required are relatively unskilled and with a fully automated process they are even replaceable. • The business can respond to an increase in orders very quickly as the process has already been set up.
Disadvantages of Mass Production • Set up costs will be high. • Breakdowns are costly as the whole assembly line will be idle. • The business is very dependent on steady demand from a large segment of the market • The system is inflexible and if there are sudden changes in demand, the business may well be left holding large stocks of unwanted products. • The production process can be demotivating for employees because of robotic activities.
