5.2 Production methods

Question 1

Production methods

Answer 1

1) Job production
2) Batch production
3) Mass (Flow) Production
4) Mass customisation

Question 2

Job production:

Answer 2

Used for the production of single one-off products.
Job production is the output of a customized good or service that meets the specific needs of a specific customer. This production method involves the output of unique or one-off orders. It is a flexible production method that allows customers to request and make changes to the product during the production process.
The complete task is handled by a single worker or group of workers
Job production tends to be highly labour intensive as it is reliant on using highly skilled workers.
Examples:
Bridges
Construction of roads
wedding dresses
hair cuts
Tailor made suits
Portrait paintings
Private music lessons
Some luxury watches, cars,
Advantages:
Motivation of workers as they are skilled workers who produce work that is original.
Most flexible production method, allows output to be catered to the specific requirements of the customers
Uniqueness therefore exceptional quality standard (USP)
a premium price can be charged (because of the product’s originality and exceptional quality); the profit margin will be higher.
Quality of Production
Variety of choice
Disadvantages:
Long production times– due to varying and specific requirements of customers
Labour intensive – expensive
Long working capital cycle
Limited opportunities of economies of scale
Irregularity of orders

Question 3

Batch production:

Answer 3

Batch production is a method of production that involves producing a set of identical products known as batch.
Work on each batch is fully completed before production switches to another batch using the same staff and machinery (it may have slightly different specifications)
Examples:
Bakery: bread, cookies
Casual clothing (t-shirts of various sizes and colours)
foods that are sold in a variety of flavours, such as chips.
Home furniture
Shoes
Advantages:
Average costs of production are lower, enabling economies of scale from machinery producing large quantities.
More choice for customers: Variety of products can be made. Could lead to more sales.
Specialization leads to increased productivity.
Variety can reduce risks
Products can still be tailored at relatively low cost, e.g. customized birthday cakes.
Disadvantages:
Need for storage
Storage costs can potentially be high. Companies will need to store different batches of finished goods so that customers’ orders can be fulfilled quickly.
Repetitive job – boredom – reduce motivation
Less flexibility for customers compared to job production, difficulty in changing one batch to another once production has begun.
High production costs – Reliance on machinery and equipment

Question 4

Mass production

Answer 4

This is a production method whereby different operations are continuously and progressively carried out in sequence, with a very large output of standardized products.
It relies on using an automated production process, so is highly capital intensive. This helps to maximise output and unit costs of production are low due to economies of scale.
Uses relatively unskilled workers as the production process is largely automated.
Used for products that require large-scale production of standardised products for mass market products.
Specialization: Specialized capital equipment and people are used at each work station to carry out a different function essential to the overall production process → high levels of productivity
Examples:
Taylor - Henry Ford - Production line
Mobile Phones
Paper clips
Buttons
Lego Toys
Canned drinks
Advantages:
Capital intensive, output is on a large scale
Most cost-effective methods of production
Benefits from economies of scale (lower cost per unit of output), can charge lower prices.
Standardised quality, workers are specialised and maintain quality standards and low defect rate.
Low labour costs due to automation.
Normally unskilled workers are required
Disadvantages:
Goods sold at relatively low prices, the firm earns lower profit margins. Business has to rely on selling a large volume of output in order to break even.
Inflexibility- products can’t be adapted to customers’ individual needs, once production starts there is little flexibility to change.
An effective stock management system, large storage system is required for the large amounts of stock.
Capital intensive, huge start up costs, running costs and replacement costs are required
Technical breakdowns will cause major problems
Monotony – boring – Not motivating for workers
Mass production does not sell the physical goods that are produced. It still requires marketing support to buy these products on a large scale.

Question 5

Mass custimisation