5.2 operations Methods Flashcards
5.2 Operations Methods (A03)
Define ‘Job Production’
Give an example
State TWO ADVANTAGES and DISADVANTAGES of Job Production.
Definition:
The output of a customized good or service, usually unique or one-off orders, that meet the specific needs of a specific customer.
Example:
Lawyers, doctors, designers bags (output is expensive)
EXTRA INFORMATION:
It is a flexible product method that allows customers to request to make changes to the product during the production process. It tends to be highly labour intensive - reliant on highly skilled workers.
ADVANTAGES:
1. Most flexible production method - output is catered to the specific needs of the customer
2. Premium price can be charged because of outputs uniqueness and exclusivity = higher profit margin
3. Workers are motivated - can produce work they are proud of
DISADVANTAGES:
1. High labour costs because workers are highly skilled and experienced
2. Long production times - labour intensive - can’t on machinery/technology used for mass produced, non-standardised output.
5.2 Operations Methods
Define ‘Batch Production’
Give an example
State TWO ADVANTAGES and DISADVANTAGES of Batch Production.
Batch production is a method of production that involves producing a set of “identical products”, with work on each batch being fully completed before production switches to another batch, which may have slightly “different specifications”.
For instance, a bakery making different types of bread/pastries.
ADVANTAGES:
1. A.C of production are lower - compared to job production - because batch production enables the organization to have greater economies of scale.
2. Fewer workers are because there is a larger reliance on machinery and mechanisation.
3. Variety of products are made = greater customer choice = likely larger sales.
DISADVANTAGES:
1. Greater need for capital expenditure - the purchase of machinery and capital equipment. Also a greater need for working capital as the business needs to purchase a lot more stocks (inventory such as raw materials)
2. reliance on machinery and automation for batch production means that technical problems or breakdowns would be costly to the organization.
3. Idle time the machinery needs to be cleaned and/or changed - reduces productivity and increases costs.
5.2 Operations Methods
Define ‘Mass Customisation’
Give an example
State TWO ADVANTAGES and DISADVANTAGES of Mass Customisation.
Mass customization is an operations method that combines the benefits of mass production (such as economies of scale) with the personalization of job production or customized production (such as bespoke features to meet the individual needs or preferences of customers).
For instance, Coca-Cola produced personalised cans and bottles, with people’s first names printed on the packaging. Customers can visit the Coca-Cola website to create and order custom names and phrases on Coke bottles.
ADVANTAGES:
1. It enables the business to enjoy higher profit margins due to the premium prices charged for mass-customized products.
2. Competitive Advantage - creates great customer choice and higher degree of customer satisfaction
DISADVANTAGES:
1. It requires a greater need for effective stock control (inventory management) - because they need to have everything nearby to fulfill individual customer needs - which can be both time-consuming and costly for the business.
2. High-value investment (capital expenditure) - Mass customization relies on creating more options (or additional extras) to entice customers
5.2 Operations Methods (A03)
Define ‘Mass (flow) Production’
Give an example
State TWO ADVANTAGES and DISADVANTAGES of Mass Production.
Definition:
Different operations continuously and progressively carried out in sequence, with a high volume of output (mass-produced) of standardized products. Very capital intensive as it relies on automated production processes i.e machinery and technology. Workers are unskiled as a result.
Examples:
Coca Cola - mass market products.
This links directly to “Standardisation” : the process in which products are mass manufactured to an identical standard, with all output being homogeneous.
ADVANTAGES:
1. Economies of scale, BECAUSE, products are mass produced. Can also mean that lower prices can be charged - customers get better value for money
2. Lower Labour Costs - fewer and less skilled workers have to be hired eu to high automation
3. Faster rate of production BECAUSE capital-intensive
DISADVANTAGE:
1. No flexibility, BECAUSE of large quantities of standardised goods being produced
2. High start up costs - machinery, production systems
3. Demotivated staff - tasks are repetitive, unchallenging (link to self actualisation)
