2.4.1 Productivity / Efficiency Flashcards
What is production
•Production is the total number of units produced in a given period of time
What’s the methods of production
Job
Batch
Flow
Cell
Describe Job production
Job production where items are made individually and each item is finished before the next one is started.
- The production of one off items to meet the needs of each individual customer
- Cheap and easy to set up, but more expensive to produce
- Often a specialist service
- Time consuming to produce
- Meet specific needs of customers
Advantages of job production
High quality
Producer meets individual need
Greater good satisfaction
Disadvantages of job production
Cost of producing one unit or job is highly labour intensive
Requires investment in skills and training
Potentially de motivating for staff as usually working in a big team
Describe batch production
- Identical items are produced in groups (batches), each item passing through the production process at the same time
- Allows for cheaper and quicker production of individual items
- More uniform products
- Variation can be achieved in different batches
Advantages of batch production
- Making in batches reduces unit costs
- Can still address specific customer needs (e.g. size, weight, style)
- Use of specialist machinery & skills can increase output and productivity
Disadvantages of batch production
- Time lost switching between batches – machinery may need to be reset
- Need to keep stocks of raw materials. Cash also investment in work-in-progress
Potentially de motivational as don’t see job through
Describe flow production
- Items flow along the production line in a continuous process
- Suitable for mass production
- Large scale
- Identical items
- Uses specialist machinery
- Workers are each responsible for a small step along the process, this involves
- Specialisation
- Division of Labour
Advantages of flow production
- Efficient process due to
- Specialisation of workers
- Division of labour
- Use of machinery
- Low cost per unit
- Consistent quality
- Continual output leading to less need to hold stock
Disadvantages of flow production
- High initial costs
- Machinery
- Computers
- Training
- Mistakes or problems can shut down whole process
- Repetitive work leading to low motivation
- Standardised products only
- Potentially de-motivating for staff as don’t get to see the job through or usually not working in a big team (social needs)
Describe cell production
- A form of flow production whereby the production line is split into a series of self contained cells
- Each cell takes responsibility for the production of complete units of output
- The members of the cell work as a team to achieve goals and ensure quality standards are met
- Increases quality, team work and motivation
- Depends upon staff being well trained
Cell production advantages
- Closeness of cell members should improve communication, avoiding confusion arising from misunderstood or non-received messages
- Workers become multi-skilled and more adaptable to the future needs of a business
- Greater worker motivation, arising from variety of work, team working (social needs) and more responsibility
- Quality improvements as each cell has ‘ownership’ for quality on its area
Cell production disadvantages
- The company culture has to encourage trust and participation, or workers can feel that they are being constantly pushed for more and more output with no respite
- The company may have to invest in new materials handling and ordering systems suitable for cell production
- Cell production may not allow a firm to use its machinery as intensively as in traditional flow production
- Some small scale production lines may not yield enough savings to make a switch cell production economically worthwhile
- The allocation of work to cells has to be efficient so that they have enough work, but not so much that they are unable to cope
What is production
Volume is output in a specific amount of time
What is productivity
The rate of output per each input
What factors influence productivity of machinery
•Age of machinery and maintenance
•Training of operatives
•Quality of inputs e.g. a high quality printer can jam if cheap paper is used
Unforeseen events
What does labour productivity measure
Output per worker
How do you calculate labour productivity
Total output / number of employees
Labour productivity will be influence by a number of factors including
- Training and skills of the workforce
- Motivation
- Complexity of the product
What is operating efficiency
•Operational efficiency involves maximising the output achieved from given inputs including machinery, materials and people
Efficiency can be improved using a number of methods including ,
- Increasing capacity utilisation (2.4.2)
- Increasing labour productivity
- Lean production techniques (2.4.3 and 2.4.4)
- Choosing the optimal resource mix, labour v capital intensive
- Using technology
Increasing labour productivity , lowers
Labour costs per unit
Labour productivity can be increase by
•Training •Increasing motivation e.g. financial or non - financial rewards, job design •Implement new technology •Better working practises Job rotation
What are the difficulties increasing labour productivity
- May impact negatively on quality and customer satisfaction
- Damage to long term reputation
- Increase waste affecting unit cost
- Employees may feel exploited
- Working harder for the same pay, may work with unions to negotiate higher wages
- Business benefiting but not the employees
- Increased workload leading to stress and demotivation
Operating management involves combing the four factors of production of resource inputs including
Land
Labour
Capital
Enterprise
The mix of resources can be
Capital intensive
Labour intensive
Describe capital intensive
Uses a high proportion of capital such as machinery in the production of a good or service
Describe labour intensive
Which uses a relatively high proportion of labour
Capital intensive advantages
Increased productivity
Improved quality and speed
Reduced labour costs
Greater opportunities for economies of scale (the benefits to a business of producing on a large scale that lead to a fall in unit costs)
Capital intensive disadvantages
High investment outlay
Lack of human initiative
Greater resistance to change by workforce e.g. retraining to use new equipment
Labour intensive advantages
Often cheaper, especially when produced in low wage locations
Workforce can easily adapt to change, especially if multi-skilled
Continuous improvement through workforce can benefit the firm e.g. new ideas
Government funding often available to protect jobs in the economy
Labour intensive disadvantages
oIndustrial relations can be a problem e.g. strikes
oLack of skilled workers in some industries
oHRM costs can be very high e.g. recruitment, selection and training
