5.2 Operation methods Flashcards
how is production divided
is generally divided in different methods that allow for an understanding of how the manufacturing process is to take shape.
For example, building a large tanker that will ferry goods across the ocean involves a production method different from the production of bread or biscuits.
Different production methods may also be combined in various industries; however, the primary goal in each production method is
is the maximization of efficiency without the sacrifice of quality
job production
- normally associated with a highest end of the market where the emphasis is in quality and originality so the producer can charge high prices
- entails the production of one product at a time with a “market-orientated” approach and the customer ending how they want to be - also called “customization”
- is generally labour intensive, with a workforce that is high skilled and also generally with machinery that is specialised
what are the advantages of job production
- Very motivational for workers as it is not monotonous but varied and results in pride of accomplishment.
- Requires less management coordination and control
- Clients get exactly what they want
- Due to the labour-intensive nature of focus the quality is higher
- The job can be modified to meet the needs and tastes of the consumer
what are the disadvantages of job production
- The overall costs of manufacturing is highest when compared to the other production methods, this due to the highly trained labour and special equipment
- Due to the specialized use of equipment, these may not be convertible to any other use and therefore serve a limited purpose
- The demand for special jobs will require longer production time and therefore delay income
- There is a risk that the product might fail because of the client’s lack of knowledge.
batch production
- normally associated with the middle of the market where the emphasis is in quality and affordability
- uses a different degree of factors of production when compared to job production
- with batch production a greater number of products are produced (instead of one at a time)
- there are similarities in the products being produced although the number is limited to a set amount
- as compared to the job production method, a larger number of the products can be manufactured at a lower cost of production ; workers are not as engaged, and machines are more active so therefore this process is more capital intensive
examples of job production
range from aircraft manufacturers such as Boeing and Airbus to a wedding dress and a wedding cake, and a tailored suit
moreover a private tutor instead of a class of 20 students could also be considered an example
examples of batch production
production of a particular stye of car seat or baked goods - when the batches are produced, they can be tailored to meet the needs and demands of a group of consumers with similar tastes and wants
advantages of batch production
- each batch can be designed to meet consumers wishes, therefore some degree of choice in this production method as the alteration of machines allows for this flexibility
- likelihood that workers will work in teams and produce varied products ; the cost of employees will be lower as they do not need to be highly skilled
- the costs associate with the machines will be lower because produced goods will be similar and hence standardized
- batch production is more beneficial than job production since 20 or 30 units can be replicated as opposed to one item at a time as we see in job production
disadvantages of batch production
- lack of motivation in repetitive batch output ; workers will not have satisfaction of being part of entire process and thereby will not feel the sense of accomplishment seen in job production
- in the event the batch. order request is of a low number, the related manufacturing costs of having to alter the equipment to meet the new production requests may outweigh the benefits of each batch production
- batch sizes are dependant on machine capacity and the Labour allocated to them, which might not be enough
- costs associated with adjusting and servicing the production machinery are not only time related, but labour related
mass production
refers to production of a high volume or standardised products, typically using a continuous flow of raw materials along the assembly line - it is all about quantity
it is a continuous process that is very capital intensive and hence a high volume of products emerge as a result
large inventories of raw materials are constantly needed to feed manufacturing
examples of mass production
bottling industry, newspaper companies, sweets/confectionaries industry
–> process is repetitive; fast paced and normally requires the use of computers
advantages of mass production
- economies of scale; because of the high volume of units produced the per unit cost drops dramatically
- Labour is restricted to machine specialists and supervisors; hence labour costs are significantly reduced
- production can continue uninterrupted at all times of the day and all dates of the year in order to meet market-based demands
- once its set up the system needs little maintenance
disadvantages of mass production
- set-up and installing machines costs will be high
- the repetitive nature of mass production will severely affect motivation and morale will suffer
- due to mass production of units, quality control will suffer
- if the machines breakdown, costs of repair can be very high
examine tables
mass customization
is an operation approach that integrates the advantages of mass production, such as cost efficiencies through economies of scale, with the tailored aspects of job or customised production
what does mass customization involve
the extensive mass production of goods while maintaining the adaptability to tailor the product to accomodate the requirements of individual customers, incorporating “customised/tailored” features to meet their specific needs or preferences
examples of mass customisation
nutella producing personalised jars
car manufacturers offering customers additional options to the “base car”
advantages of mass customization
- offers greater choice for customers and a higher degree of customer satisfaction and therefore can create competitive advantages for the business
- flexibility enables for more customers to have their individual needs and preferences met, without the high costs associated with job production
- enables the business to enjoy higher profit margins due to the premium prices charged for mass customised products
disadvantages of mass customization
- Mass customization relies on creating more options (or additional extras) to attract customers, but such investments can be highly expensive for the business.
- It requires a greater need for effective stock control (inventory management), which can be both time consuming and costly for the business.
- It can be challenging to forecast sales and trends due to the wide range of options made available to customers.
factors that affect the decision of which method to use: target market
when a firm produces high volumes of a low-cost product for a large market of people with low income
factors that affect the decision of which method to use: the state of existing technology
since this can limit how flexible the production can be.
factors that affect the decision of which method to use: the availability of resources
fixed capital, working capital, and human capital
factors that affect the decision of which method to use: government regulations
when firms might have to meet certain target of recycling, for example
