5.2 Production Methods Flashcards
Job production
each product is customized or tailored to meet specific requirements of the customer
each product is completed before the next is started
often labour intensive with skilled workers
Batch production
producing a number of similar products at one time
producing items in identical groups
or the batch moves on the next stage of production
Pros of job production
higher customer satisfaction as made specifically for them (possible higher prices)
High quality - skilled workers (USP)
Higher employee motivation
Cons of job production
Labour intensive, so higher labour costs
Time needed - less potential to automate
Fewer economies of scale as lower output
Pros of Batch production
More product variety - can satisfy more customers (e.g. diff colors)
Still some flexibility to change the product between batches
More economies of scale - lower unit costs
Cons of Batch production
less tailored for customers
Costs of holding stock - storing each batch
Set up costs - machinery etc
Mass production
involves large scale production of a standardized product
usually capital intensive
production line
highly automated
Flow production
similar but continuous 24 hours a day production
more capital intensive
Pros of mass production
economies of scale from high volume of production
higher labour efficiency as workers specialize in one job
standardized product enables consistent brand image
less labour intensive so lower labour costs and less motivation issues
cons of mass production
set-up costs - buying production line machinery
lower employer motivation due to specialization
more difficult to offer different product choices to consumers
higher storage costs
Mass customization
combines the higher production volume of mass production with the flexibility to be able to tailor each product somewhat to customer demands
use of technology such as 3D printing and computer-aided-design (CAD) allows it to now be possible
which method does a business use
sometimes, it is not obvious which one or they might use a combo
fast fashion - classics vs fad clothing
sneakers - classic vs personalized
Which is the most appropriate method of prod.
depends on:
- level of demand for the product (size of the market)
- will prod. be high enough to make it profitable to invest in the equipment
- services tend to be job production - cannot mass produce teachers
marketing - quality versus standardization, USP, personalized product
- the effect of switching from job to batch or batch to mass
