2.4.1 production, productivity and efficency Flashcards
what are the 4 methods of production
1 job production
2 flow production
3 batch production
4 cell production
what is 1 job production
- when he product is made to order
- one product at a time for a specific customer
- takes a long time to produce by skilled workers
evaluate job production
+ can charge high prices if the product is unique or handmade
- can’t take advantage of economies of scales as they don’t produce in bulk
- costs will be higher to pay the skilled workers
what is flow production
- when production of standardised products is continuous to produce large amounts
- often operates 24 hrs
- used in mass market
evaluate flow production
+ can benefit form EOS which reduces costs
+ most efficient
- machinery can be expensive
- customisation is limited
what is batch production
- when groups of the same products are produced
- then production is stopped and changed to produce a different batch of products
- used when the business sells in limited quantities for a limited amount of time
evaluate batch production
+ can benefit from EOS
+ Productivity is higher than job production
- requires careful coordination to avoid shortages ]
- money is tied up in stock
- completed batches need to be stored which could be costly
what is cell production
- when the flow production line is split into ‘cells’ that account for significant portions of the finished article
evaluate cell production
+ job enrichment, workers don’t have such specific repetitive tasks
+ Cells take pride and produce quality
+ allows for customisation in each cell, which could boost sales
- recruitment and training are more important
- allocation of work needs to be balanced between cells so production still flows
how do you calculate productivity
- number of output / input (person or machine)
what are the 2 types of productivity
- labour productivity = output / number of workers
- capital productivity = output / number of machines
what factors influence productivity
- employee motivation, staff can be given both financial and non-financial incentives
- skills and education of staff, workers are more autonomous and less supervision is needed
- working practices, flexible and adaptable workplaces
- capital employed, machinery is less likely to make mistakes and can operate for longer
define competitiveness
the ability of a business to maintain or grow sales or market share
what’s the link between competitiveness and productivity
- if the firm is more productive, they produce more with the same level of resources
- this lowers costs, this allows a business to either pass these reduced costs to consumers or enjoy higher profit margins
define efficiency
- the ability of a business to use its production resources as cost-effectively as possible
- often measured in terms of average cost per unit
how do you calculate average cost per unit
total costs / number of units produced
explain the difference between efficiency and productivity
efficiency is about reducing the waste, effectively using all resources
whereas
productivity is producing high amounts of units in a short amount of time
what factors influence efficiency
- relocation or downsizing
- investment in capital equipment, upgrading tech or machinery
- delayering the organisational structure
- reconsider design mix
- lean production, holding little stock or using as few resources as possible
a firm can be both capital intensive and labour intensive, explain both of these terms
labour intensive = more workers and less machinery
capital intensive = more machinery and few workers
when is labour intensive production used
- when labour is cheap
- when delivering a service
- when production is small
when is capital intensive production used
- large scale production of standardised products
- when labour costs are high
evaluate capital-intensive production
+ low costs
+ Consistency and precision
+ Machines can work for longer
- high maintenance costs
- breakdowns can cause delays
- limited flexibility in production
evaluate labour intensive production
+ low costs when laboure is cheap
+ allows workers to be creative
+ workers are more flexible than machines
- workers can be unreliable
- training and recruitment costs
- people require management
a business needs the right balance between labour and machines, why can this be difficult
- if the production process is complex
- if there are labour shortages
- if businesses have limited finances to fund machinery
