1. Production Methods

2. By the end of the chapter You should be able to … Define and Explain the following production methods: Job or customized production Batch production Mass production Flow, line or process production Cellular manufacturing Recommend the most appropriate method of production for a given situation

3. Table 5.2.1 – page 346 Definitions and examples of four types of production Job Batch Mass Cellular

4. Job Production AdvantagesDisadvantages Mark-up likely to be high – can make $$Can be expensive, requiring skilled workers and non-standardized materials Customer gets exactly what they wantLikely to be time consuming; more consultation with the client This method likely to motivate skilled workers who work on the individual project Possibility that the product might fail due to lack of knowledge of client Can be a flexible production methodVery labor intensive; relies on skilled workers Production of a “one of a kind” product; made to a customer’s specifications

5. Batch Production AdvantagesDisadvantages Businesses can achieve economies of scale Businesses may lose production time as machines are reset Allows customers more choice, captures more market share Businesses may need to hold large stocks of work May be an effective way to trial productsSizes of batches are dependent on the capacity of the machinery May help deal with unexpected orders Production of a group of identical products; requires careful planning

6. Mass Production All about quantity – production of a high volume of standardized products Typically a continuous flow along an assembly line Labor usually unskilled Automation used Requires careful planning Production relies on large, reliable orders Flow production sometimes used as a synonym

7. Mass Production AdvantagesDisadvantages Once set up, system needs little maintenance Set-up costs are high Busienss can cater for large orders – economies of scale Breakdowns are costly; assembly line has to stop Labor costs may be low; generally require unskilled labor Business dependent on a steady demand from a large segment of market Response to increased orders can be quick System is inflexible – if a sudden change of demand, business left with stock Production process can be de-motivating for workers All about quantity – production of a high volume of standardized products

8. Compare production methods Job ProductionBatch ProductionMass Production Set-up Time Long set-up time; new set-up for every job Usually a modification of existing process; Very long set up Cost / unit HighMediumLow Capital (machinery) Can be flexibleMixture of machines; based on general purpose machines Large number of general-purpose machines Labor Highly skilled – craftsmen Semi-skilled; need to be flexible Unskilled workers; minimal training Production Time Likely to be longOnce set up, production fast Production is swift Stock Low quantities of raw materials; high amount of work in progress High quantities of raw materials; medium amount of work in progress High quantities of raw materials & finished product, low amount of work in progress

9. Cellular Manufacturing Also called “cell production”; Form of mass production Flow broken up by teams of workers responsible for certain parts of the line A recent attempt to improve production techniques Allows workers to operate as self-contained units called “cells” or “pods” Should result in greater motivation for workers Cooperative in nature; should result in quality improvements

10. Changing Production Methods Can be difficult and costly to change an established production method; affects all business functions: HR – Workers may have to change jobs, be retrained or fired Refining roles requires careful planning Marketing – Products available to consumer change Distribution channels may be affected Changes in cost of production may be passed on to consumer Finance – Production changes impacts stock control, affects costs Changes take time, could cause delays in production Change needs financing

11. What is the most appropriate method?? Varies from business to business. Factors affecting include: The target market – are you producing a high-volume, low-cost product? The state of existing technology Availability of resources Government regulations Businesses often combine methods of production in order to be most efficient

12. Key Terms Job or Customized Production Batch Production Mass Production Flow, Line or Process Production Cellular Manufacturing

13. Revision Checklist Job(customized) production is market-oriented - the customer or client decides what the product should be. Often production of a special, one-off production Batch production creates a group of identical products, which can be customized Mass production creates a high volume of identical, standardized products Flow, line or process production is an aspect of mass production – constant flow of materials Cellular manufacturing is a form of manufacturing which involves the team concept.