GCSE Business Studies Production

Objectives To understand the three main methods of production that a business can use to produce goods To consider the advantages and disadvantages of each method of production

Methods of Production Job production Batch production Flow production Just in Time (JIT)

You own a business – you cannot eat your products – this does not generate any profit!

Resources Raw Materials: A range of different coloured Smarties bags

Activity: Job Production You are going to produce bags of Smarties that have 8 Smarties in each bag. The colour of Smarties you put in each bag will depend on your customer orders. You have 2 minutes. Your group will have up to THREE orders to complete. Each pair in the group gets ONE order each. Find out what colour Smarties the order needs in each bag and write down the orders on your record sheet. Produce the bags of Smarties as ordered. DO NOT EAT THE SMARTIES!

Job Production Producing a “bespoke” or custom made product Each product is made for one individual customer Examples: Selling ice cream cornets with a choice of fillings or making individual bags of Smarties: Making a wedding dress:

Activity: Batch Production Using the Smarties provided, produce the following bags of Smarties. Each bag will have 8 Smarties in it. Stop after the first batch and wait for the order to make the second batch. Two bags – each bag containing 4 red/pink Smarties and 4 blue Smarties Two bags – each bag containing 4 green Smarties and 4 purple/brown Smarties Two bags – each bag containing a mixture of colours You have TWO MINTUES

Batch Production A group of identical products are produced, then the production process is stopped and re-organised in order to produce another “batch” Products are produced “in bulk” but production is not continuous Examples: Seabrooks Crisp Factory, Bradford Cadbury’s Factory, Birmingham

Activity: Flow Production In a group of four, you must produce as many bags as possible in 2 minutes. You must produce at least 8 bags. Organise your production process as follows: You must pass the Smarties along your production line to the “bagger”

Flow Production Production is continuous and does not stop Mass production of a product Examples: Toothpaste factory in Beijing TV Factory in Mexico

Flow Production: Car Manufacturing

The First Modern Day Mass Producer Henry Ford 1903: Ford Motor Company 1908: Model T car “Customers can have any colour they like, as long as it is black”

Activity:Just in Time The goods required to produce the end product are delivered to the production line “just in time” for them being used. This means stock levels are kept low but production could stop if the suppliers don’t deliver on time.

Activity:Just in Time You are going to produce bags of Smarties. The colour and number of Smarties you put in each bag will depend on your customer orders. One of your group must act as the supplier. It is their role to collect the resources and deliver them to the group. They can only deliver ONE item at a time and must wait until a request has been made by the group to say that they require each item. You have 2 minutes. Your group will have up to THREE orders to complete and write down the orders on your record sheet.

Test Your Knowledge … Which method of production? A group of identical products are produced, then the production process is stopped and re-organised in order to produce another “batch” Production is continuous and does not stop Producing a “bespoke” product and each product is made for one individual customer

Types of Production: Job, Batch, Flow, JIT In which of the three methods would you most likely … Get a very satisfied customer? Be able to charge the cheapest price? Charge the highest price? Have you low stock levels Be able to be flexible as to what you produced – thus matching production to demand? Be able to produce the most products per day? Put pressure on your suppliers? Have a large amount of capital investment to set up the process? Have the cheapest “start-up costs”?

And…… Now you can eat your Smarties …

TASK – What do you remember TASK – What do you remember? Methods of Production make notes / mind map on the advantages and disadvantages of the different types of production

Methods of Production Method of Production Advantages Disadvantages Job Production Batch Flow Just in Time Complete a mind map to show the advantages & disadvantages of each method of production

Job Production Customer gets exactly what they want because the product has a unique design – customer satisfaction is maximised Tends to be “labour intensive” – requires a large number of employee hours and often skilled labour Tends to be time consuming to make and therefore you cannot produce on a large scale Price charged per product is normally high because they are expensive to make

Batch Production More products can be produced compared to job production because you do not have to consult your individual customers Production is more efficient because the same product is made for a large number of customers – time is saved Price is normally cheaper than “bespoke” products Products are produced in limited quantities

Flow Production Tends to be “capital intensive” – uses machinery rather than employees to make the product. This can have very expensive start-up costs Production is continuous – workers work shifts so that the product is made 24 hours a day Production is much quicker than job/batch production – more can be produced in one day In flow production, firms can take advantage of “economies of scale”

Just In Time (JIT) Production JIT production uses stocks that are delivered to the production line ‘just in time’ to be used. The business needs less factory space, as it holds smaller stocks; but it depends on suppliers agreeing to meet delivery requirements. The business does not have as much money tied up in stock, warehousing costs or unsold finished products. The reliability of the supplier in delivering good-quality stock on time is crucial to keeping the production process running smoothly.

Test Your Knowledge … Which method of production should be used in the following examples? Making t-shirts of varying colours and styles Making tins of baked beans Making luxury cruise ships to order, so each ship is a different design

Answer the Exam Questions Test Your Knowledge … Answer the Exam Questions