2.4.1 - Productivity

Question 1

What is productivity

Answer 1

• Productivity is the output per input (person or machine) per hour

• Productivity is how a business can measure how hard a person or a machine is working
• This helps in planning, scheduling, monitoring, budgeting and running the business
• We talk about productivity in terms of “efficiency” if it is good or “inefficiency” if it is bad

Question 2

What is production

Answer 2

Production- is the total amount of output that is produced in a time period

Question 3

what are the 4 methods of productions

Answer 3

• Job
• Batch
• Flow
• Cell

Question 4

What is job production

Answer 4

• Job production is where one single product is made at a time
• Products are made for a specific client or customer
• Products made are high quality, which means higher prices can be charged
• However, the production process can be slow and labour intensive
- goods are made by skilled craftspeople who will be well motivated

Question 5

what are the advantages of job production

Answer 5

• Bespoke, unique, one off, to customers measurements or specifications e.g. a kitchen
• Very motivated workers who can see one item made from start to finish
• Motivated workers are normally more productive and have lower rates of absenteeism

Question 6

What are the disadvantages of job production

Answer 6

• • Skilled labour and craftsmen are expensive
  • Wide range of tools may be required
  • Hard to speed up if demand increases

Question 7

What is batch production

Answer 7

• This is the production method used when a business wants to make more than one item at a time
• Goods are made in batches, and can be switched over to make something different on the same production line

Question 8

What are the advantages of batch production

Answer 8

• Production can be changed to meet customer needs or fluctuations in demand
• Standard production of items means it can be mechanised less labour involved than job production
• Employees specialise so become good at their job
• Lower skilled workforce means lower wages can be paid

Question 9

What are the disadvantages of Batch Production

Answer 9

• Small batches carry higher average unit costs (EOS)
• Workers may be less motivated with repetitive work
• Idle time between batches needs to be managed as this is wastage
• need to clean machinery

Question 10

What is Flow Production

Answer 10

• Flow production uses production lines with continuous movements of items through the process
• Many mass produced products are made this way such as; cola, cars and toothpaste
• The factory would be laid out in assembly lines
• Correct production process to choose when standardised products need to be mass produced in huge volumes in a continuous process

Question 11

What are the advantages of flow production

Answer 11

• A business can make larger quantities which means they can bulk buy raw materials and save money (economies of scale)
• Automated and computerised production means improved quality and more complex designs can be made in shorter times
• As production is continuous stocks of parts and raw materials don’t need to be held this means a business can use the JIT (just-in-time) system

Question 12

What are the disadvantages of flow production

Answer 12

• High costs to buy the factory and machinery
• Low motivation of staff due to repetitive tasks
• Break downs and lost production can be costly
• Very inflexible, hard to change the factory machinery to make different products, the production process will be set up to make just one item e.g. bottled cola

Question 13

What is cell production

Answer 13

• Cell production is dividing up production into separate self contained areas that are each responsible for a section of work
• In the DR Martens video you can see that cutting the leather is one section, then sewing is another etc.
• Each cell will have a team leader and a team of multi-skilled workers

Question 14

What are the advantages of cell production

Answer 14

• Wastage through movement of materials is reduced
• Time waiting for stock to arrive is reduced
• Bottlenecks in the production process are reduced (where everything builds up waiting to go to the next stage)
• Cell production can mean increased worker commitment and motivation and therefore increased productivity

Question 15

What are the disadvantages of cell production

Answer 15

• Any breakdown of machinery will stop the production
• Needs more staff to supervise than a continuous flow
• Expanding can be hard as space may be limited or restricted by tasks

Question 16

What are the 4 ways to improve productivity

Answer 16

1. Productivity bonus
2. Productivity deal
3. Staff training
4. Investment in new machinery and equipment

Question 17

What is productivity bonus

Answer 17

• A business may decide to boost their productivity levels by offering their employees a productivity bonus
• So for example, the employees if they increase production by 5% may be entitled to with a lump sum bonus e.g. £500 or a percentage on their wages
• This will increase the costs of the business so may not maximise efficiency

Question 18

What is a productivity deal

Answer 18

• The union in a business may negotiate a productivity deal for all staff
• This should motivate everyone in the organisation to work harder and more efficiently

Question 19

What is staff training

Answer 19

• If staff are better trained they can be more productive
• Once you are fully trained you will be able to work hard at your job
• Training can be expensive because it means that two people (at least) are away from their job while the employee is being trained, so there is also lost productivity while that happens

Question 20

What is investment in new machinery and equipment

Answer 20

• The business may decide to invest in new machinery to make it more efficient and produce more goods per hour – which will boost productivity
• Machinery / capital investment is expensive and may take years to recoup the costs so is a very long-term strategy to improve productivity

Question 21

What factors influence productivity

Answer 21

• Quality of inputs in the production process – faulty parts in an assembly line can stop the line
• Labour shift organisation of workers, having the right number of staff on at peak times will increase productivity overall, as stretched staff are demotivated by being overloaded
• Investment in new technology, robots can work 24/7 without rest breaks and so will increase productivity levels

Question 22

What is the link between productivity and competitiveness

Answer 22

• In essence if a business is more productive then it can produce goods more economically efficiently and therefore is in a position to charge more competitive prices
• For example a business that introduces s new machine perhaps to bottle beer or wrap crisps and can now produce double the amount in half the time
• The business will enjoy economies of scale and can therefore charge a competitive price

Question 23

What is production at minimum average cost

Answer 23

• Efficiency is maximised when goods are produced at the minimum unit or average production cost
• Production will aim to operate at the minimum average cost per unit so that they can take advantage of economies of scale

Question 24

How do productivity and efficiency link

Answer 24

• Firms that have a higher output per employee are more efficient
• This can lead to competitive advantage as prices per item made are lower than competition
• Can become market leader through low prices or
• Enjoy high profits due to lower production costs
• Quality may suffer as a result of trying to produce items too quickly

Question 25

What is labour intensive production

Answer 25

• Labour intensive production makes products using mostly human effort (or labour)
• China and India both have access to cheap labour so favour these production methods
• The nature of the product will determine if it is suitable for labour intensive production e.g. can make cars by hand but to produce in volume requires machines

Question 26

What is capital intensive production

Answer 26

• In some industries only capital intensive production is possible
• In capital intensive production goods are produced using mainly machines and equipment
• UK has high labour costs so favours capital intensive production
• This allows the business to produce goods at the minimum average price (bottom of the cost curve)
• Machines often break, need to be maintained and are expensive to buy