5.2 OPERATIONS METHODS Flashcards
Types of Operation Methods
- Job production
- Batch production
- Mass/Flow production
- Mass customization
Job Production
Production of a special ‘one-off’ product made to a specific order (for one individual customer)
Job Production Features
- Associated with the highest end of the market
- Emphasis on quality, uniqueness and originality
- Premium pricing
- Market oriented: Client decides precisely what the product should be.
Job Production Advantages/Disadvantages
+ Markup likely to be high
+ Clients get exactly what they want
+ Likely to motivate skilled workers
+ Can be flexible
- Expensive. Requires skilled workers and non-standardized materials.
- Time consuming. There is more consultation with the client.
- Product might fail because of lack of knowledge of the client. Might negatively affect the business’ image.
- Labour intensive and reliant on skilled workers.
Batch Production
Manufacturing method where products are made in groups or batches, with each batch going through one production stage before moving to the next. It’s suitable for making limited quantities or varied products on the same line with minimal setup changes.
Batch Production features
- Middle of the market
- Emphasis on both quality and affordability
- Products are still market oriented, but customers are offered customized products but using a range of standardized options.
- Some consultation with customers. Some of their requirements may be limited.
Batch production advantages/disadvantages
+ Can achieve economies of scale
+ Allows customers more choice than mass production, captures more market share.
+ May be useful fro trialling products
+ It may help deal with unexpected orders
- May loose production time as machines are recalibrated/retooled (this is known as downtime)
- May need to hold large stocks, in case of unexpected orders.
- The sized of batched depends on the capacity of the machinery or labor allocated to them.
Mass Production
Mass production is a manufacturing process that produces large quantities of standardized products, often using assembly lines or automated technology, to achieve high efficiency and uniformity.
Mass Production features
- All about quantity
- High volume + Standarized
- Uses a continuous flow of raw materials along an assembly line
- Labour usually unskilled. Purpose is quality control.
Mass production Advantages/Disadvantages
+ Once set up, the system may need little maintenance
+ Can cater for large orders, achieving considerable economies of scale
+ Low labor costs because it requires unskilled workers and it is a fully automated process. Their work isn’t as necessary.
+ Can respond to an increase in orders very quickly.
- High set up costs
- Breakdowns are costly, as the whole assembly line may have to stop.
- Business is dependent on steady demand from a large segment of the market.
- Inflexible. If there’s a stop in demand, the factory will be left with large amounts of stock.
- Production process can be demotivating.
Implications of changing production methods for HR
- Workers may have to be redeployed, retrained or even fired. HR would need to be managed carefully.
- Refining roles and responsibilities of workers. Requires careful planning.
Implications of changing production methods for marketing
- Affects the orientation of a business as well as the product available to the customer. Image of the business may be altered.
- Distribution channels may be affected, may lead to differing response times.
- Changes in cost of production may be passed onto the consumer. Highr priced products.
Implications of changing production methods for finance
- Impact on stock control. Affects costs.
- Changes take time. Can interrupt current production, causing delays in the working capital cycle.
- Any change will need financing.
Most appropriate method of production
It varies from business to business. Factors affecting the decision include:
- The target market
- The state of existing technology: Can limit how flexible production can be
- The availability of resources: Fixed capital, working capital and human capital.
- Government regulations: A business may have to meet certain targets for recycling waste emissions.
