Production Productivity And Efficiency 🏭 Flashcards
What is production ?
When resources such as raw materials are changed into products
What are the 4 types of production ?
Job - the production of one single product at a time
Batch - where goods are produced in groups
Flow - continuous movement of goods through a production process
Cell - where production is divided to each cell is responsible for production
What are the positives and negatives of Job production?
Pos- high quality and personalised to customers needs as workers are highly skilled
Workers are motivated as work varies from each customer
Products can be customised
Production is easy to organise
Cons -
High labour costs due to skilled work force
Production may be slow - long lead time
Expensive
Wide range of tools needed
What are the advantages and disadvantages of batch production ?
Advantages- workers can specialise in one process
Unit cost is lower as output is higher - fixed costs are spread out more
Production is flexible as diff orders can be met -Production can take place as the previous ‘batch’ starts running out
Disadvantages-
More working capital tied to work in progress stock
Careful coordination is needed to avoid shortages
What are the main features in flow production ?
Production in large quantities
Semi skilled workforce
Large amounts of machinery
What are the advantages and disadvantages of flow production ?
Positives - low unit costs due to eco mines of scale
Rapid production
Capital intensive
Negatives -
Worker motivation low due to repetitive tasked
Can’t customise
Production too standardised - not flexible
High set up cost due to machinery
What are the positives of cell production ?
Team work encouraged - more motivated
share skills and expertise
(Floor space is released
Lead time cut
Product flexibility
Movement is reduced )
What is productivity ?
The output per input per hour
What are the 6 factors influencing productivity ?
Specialisation and the division of labour- people can concentrate on limited tasks
Education and training - through gov implementing more tools
Motivation of workers - through incentives or new tasks
Working practices - repositioning more convenient
Labour flexibility- can do more than one job
Capital productivity - new tech - more efficient
What is efficiency?
Producing a level of output where average cost is minimised
What are some factors influencing efficiency? (7) positives and negatives ?
- Introducing standardisation-
Occurs when all staff use the same components and techniques in the production process
Positives
Training of workers is minimised
Bulk-buying of components reduces variable costs
Production lead time is reduced
BUT customisation of products is not usually possible
(using one uniform work for and tools - non need to have serval different orders - less risk of making mistake and wastage - however may be inflexible )
- Outsourcing - Tasks may be given to other specialist businesses that can complete it at a lower cost
Outsourcing allows a business to focus on improving the efficiency of its core competences
Eg . when a business gives work to sub-contractors outside of the country for cheaper costs - labour or more flexibility - closer to suppliers
- Relocating - Moving production to a cheaper or smaller location can reduce fixed costs
Labour-intensive - businesses may look for lower wage locations
Capital-intensive locations may look for lower rents or land costs
However, relocation is very disruptive and will incur significant short-term costs
Eg . moving business to entirely new place - less cost for rent or bester transportation links for suppliers cheaper labour costs
- Downsizing - reducing capacity by laying off staff
- saving wages cost
- remove unproductive workers
Hover may lose skilled experience and knowledge
And may have an adverse effect to the moral of workers - Organisational restructuring - Reducing the level of staff or reorganising staff can better match labour to output needs
Delayering reduces labour costs as levels of management are removed
Redeployment -can motivate workers by providing opportunities for staff to take on a new role which will develop their skills and experience
Eg . Delayering - removing a layer of staff - better communication increased motivation of staff as tasks are more clear - increase efficiency empowered can make own decisions
- investing in new tech - Purchasing or upgrading machinery and technology can increase the rate of output, lower costs and improve quality
Eg . machines are quicker don’t take breaks can be more Precise can produce high levels of work without being in a good condition + complex tasks
- Adoption of lean production techniques
An approach to production that involves the reduction of all types of wastage (time, resources and space)
Kaizen means that improvements are made continuously
Just in Time involves the holding little or no stock which minimises storage costs
Lean production - only producing goods when an order is made
Reduces costs and cuts lead time
Reduce number of defect products
Raised productivity
Eg . Kaizen- continuous improvement - if workers have high moral they are always coming up with ideas to improve quality or reduce waste ♻️ or increase efficiency.
JIT
What proves whether a business should use labour or capital intensive production? 
Type of product - whether there is high demand of it where did that it’s needed in large quantities
Relative price between the two - there’s a rise in labour prices (rising wages ) go capital intensive for less costs
Size of firm- large firm need large production need capital
What are the positives and negatives of having capital intensive strategies?
Positives-
Can run without breaks and motivation
more consistent and precise
Low cost production where output is high - eco of scale
Negatives - New influx of machines may decrease the workers morale
specialised maybe inflexible
High set up cost
What are the positives and negatives of having a labour-intensive strategy?
Positives-
more flexible can implement new skills and can be retained can implement new ideas
cheaper
Negatives - Need motivation- if low morale may affect quality and overall performance of business
people have off days
How is efficiency measured?
Do the average cost per unit
