2.4 Flashcards
What are the methods of production?
Job
Batch
Flow
Cell
Job production
Making tailor-made products to suit customer tastes.
Benefits:
+ Work is more interesting for staff.
+ Can charge a premium price as products are tailored to meet exact expectations.
Weaknesses:
- Cost per unit is very high, due to high level of skill and low rates of production.
- Finding staff with sufficient skills can be hard and pay will have to be high.
Batch production
Batch production makes a group of products to one specification at a time, allowing some variation in products, yet some specialisation.
Benefits:
+ Allows variation in the product being made.
+ Speedier than job production as making a batch of identical products speeds up production.
Weaknesses:
- More costly to set up than job production as some specialist machinery will be needed.
- Cost per unit will be higher than flow production as machinery will need to be adjusted between batches.
Flow production
Flow production refers to continuous production of a single, standardised product.
Flow production involves huge volumes of output to be produced extremely quickly and cost effectively. It is likely to rely on heavy automation (machines completing tasks).
Benefits:
+ Unit labour costs are extremely low.
+ Huge volumes allow huge demand in mass markets to be met.
Weaknesses:
- High initial costs of installing production machinery.
- Products need to be identical- no tailoring to suit different tastes.
Cell production
Cell production involves organising workers into small groups that can produce a range of different products more quickly than job production allows.
Benefits:
+ Group working allows ideas to be generated within the cell for improvements to processes.
+ The small highly skilled cell can adjust products to suit customers’ needs.
Weaknesses:
- Heavily reliant on people, costs are relatively high.
- Production volumes will not be as high as flow production.
Circumstances where each production method is most effective.
INSERT PICTURE
Outline what productivity means?
Productivity refers to output per worker. It is the speed at which an employee completes their task.
Productivity is a measure of efficiency of the production process. It is usually measured as output per worker per time period.
How do you calculate productivity?
Productivity = total output/ number of workers
Factors influencing productivity
- Quality and age of machinery
- Skills and experience of workers
- Level of employee motivation
Link between productivity and competitiveness
Higher levels of productivity lead to lower unit costs. This is because the labour cost involved in making each unit falls as workers work faster.
Lower unit costs allow businesses to cut prices while maintaining the same profit margin.
Outline what efficiency means
Efficiency measures the extent to which the resources used in a process generate output without wastage.
Efficiency differs from productivity as it considers waste.
A process my have a high level of productivity but generate a lot of waste. Therefore, it is not efficient.
Factors influencing productivity and efficiency
1) Quality and age of machinery:
Affects productivity because newer machinery works faster, and break down less.
Also affects efficiency because fewer breakdowns mean fewer faults and newer machinery may produce less variation.
2) Skills and experience of workers:
Affects productivity because highly skilled staff can produce things faster, while experience brings knowledge of how to complete tasks with high efficiency and quality.
Also affects efficiency because skilled staff are likely to make fewer mistakes, while experience can mean staff spot the problems that lead to faults before they occur.
3) Level of employee motivation:
Affects productivity because motivated staff are likely to focus on the task without distraction and to work as quickly as they can.
Also affects efficiency because motivation brings pride in work, so motivated staff will be careful not to make errors, and to lose concentration less.
Labour intensive production
Means that a production process relies heavily on human input with little use of automation.
Capital intensive production
Uses high levels of automation, reducing the role of humans as much as possible, replacing them with machines.
Issues with labour intensive production
- Labour costs will form a high proportion of total costs.
- May force a firm to move abroad to lower-wage countries or to spend heavily on motivational methods.
- Greater flexibility in terms of product variations- suit customer needs better- adding value and allowing a higher selling price.
