2.4.1 Production, productivity, and efficiency Flashcards
Production
The transformation of resources into goods or services.
Job production
Firms producing items that meet the specific requirements of the customer.
Benefits of job production
- Associated with higher quality Higher price.
- Employees more motivated – job satisfaction.
- Customer requirements and changes can be handled.
Drawbacks of job production
- Individual cost per unit is high.
- Labour intensive High labour costs.
- Usually reliant on high skills.
- Requires close consultation with client.
Batch production
Products are made in groups with a series of tasks performed on each group.
Benefits of batch production
- Cost savings achieved by buying in bulk.
- Still allows customer some choice.
- Products can be worked on by specialist staff at each stage.
- Allows a firm to handle unexpected orders.
Drawbacks of batch production
- Takes time to switch production from one batch to an other.
- Requires business to maintain higher stocks of raw materials and work in progress.
- Tasks may become boring (repetitive) – impacting on staff motivation.
Flow production
Producing as many as possible of an identical product continuously on an assembly line.
Benefits of flow production
- Costs per unit reduced – economies of scale.
- Suitable for manufacture of large quantities quickly.
- Less need for training.
- Capital intensive so can work constantly.
Drawbacks of flow production
- Goods are mass produced – less differentiation for customer.
- Long and expensive set up time.
- Production is shut down if flow is stopped.
- Worker motivation can be low – repetitive tasks.
Specialisation
Where work is divided into separate tasks that allow workers to become skilled at one of them.
Cell production
The production line is split into a series of self contained cells where teams in these cells work together to create one unit of output.
Benefits of cell production
- Improved productivity due to greater motivation.
- Quality improvements as each cell has ownership for quality on its area.
- Workers become more multi skilled.
Drawbacks of cell production
- Recruitment and training of staff must support this approach.
- May not allow firm to use machinery as intensively as in traditional flow production.
- Product is removed from the flow so productivity can be lower.
Lean production
A Japanese approach to production focused on eliminating all forms of waste.
