1. PRODUCTION SYSTEMS
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2. WHAT IS IT?
Decides how the manufacturer will produce the goods for the consumer
Design of it:
Decide the layout of the factory
Where each part of production will take place by which workers/machines
How many machines/workers (division of labour) will be needed for each part
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3. SUCCESS! Will require a flow of stocks from one job to another
This ensures there is no delays in production due to shortages or bottlenecks
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4. FACTORS THAT AFFECT THE DECISION ON WHAT TYPE OF PRODUCTION SYSTEM TO USE
Nature of the final product
Market size
Resources available
Stage of development of the business
The quantity to be produced
Labour Intensive V Capital Intensive production
Availability of Technology - automation
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5. NATURE OF THE FINAL PRODUCT
Different products are produced in different ways
eg products in farming are tied to the land they are produced on
Producing a new bridge will require different production processes (iron, construction, welding etc)
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6. THE MARKET SIZE
Where the firm is producing large numbers of standardised products such as cans of Irn Bru the production process is put into a number of stages
When producing customised software for individual clients, the process is more complicated as the customer has more input in the final product
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7. RESOURCES AVAILABLE Restricted by the factors of production
Is there enough finance? – capital
Is their enough workers and do they have sufficient skills? – labour
Are the premises large enough? – land
Are the machinery and tools available? - capital
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8. STAGE OF DEVELOPMENT OF THE BUSINESS
When first set up, businesses tend to produce small amounts and have limited production systems
As the firms grow, they are able to increase their capacity, therefore, their production system increases and they are able to produce a greater variety of goods
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9. THE QUANTITY TO BE PRODUCED
Production of large numbers of standardised products is best suited to one type of production
In comparison, producing a unique stained glass window for a church will need a different one
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10. LABOUR INTENSIVE Vs CAPITAL INTENSIVE
Where the cost of labour is greater than the cost of machinery (labour intensive). This is very rarely used in this country because of the high labour costs. Therefore capital is used instead because machines are much more cost effective
In countries where the labour costs are low eg India, Pakistan, then firms will use cheap labour as this is more cost effective
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11. LABOUR INTENSIVE SYSTEM
Used in organisations where:-
Labour is cheap relative to cost of machinery
Production requires skilled craftsmen
Use of machinery is impractical (due to working environment, lack of mobility/flexibility of use)
High quality production depends on the ability to think, reason, act on initiative and make decisions
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12. CAPITAL INTENSIVE SYSTEM
More emphasis is placed on machinery and other capital equipment. Durable goods are made in this way eg cars, washing machines
Most common where:-
Supply of labour is limited
Production processes benefit from machine efficiency and consistency of output
Use of equipment offers cost benefits
Use of equipment offers higher quality or improved accuracy in production
Production process is routine and repetitive
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13. AVAILABILITY OF TECHNOLOGY - AUTOMATION
Computer Aided Manufacture (CAM)
Computer Aided Design (CAD)
Automation (robotics to replace workers)
These allow firms to design, develop and produce products quickly
Firms are also able to produce a larger variety of similar products to appeal to different segments of the market
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14. ADVANTAGES OF TECHNOLOGY
Machines can carry out very complicated tasks very quickly with a high degree of accuracy
Machines can perform in seconds jobs that a skilled worker could take days to achieve (carver)
Machines can do jobs which are impossible for human workers
Less wastage and quality is consistent
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15. HOWEVER Machines are more likely to break down than humans
Each machine can only carry out a very narrow range of tasks
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16. OTHER FACTORS TO CONSIDER WHEN DECIDING ON SYSTEM TO BE USED
Methods of production system
Quality assurance (standards, methods of application)
Stock control
Purchase of materials
Payment systems
Distribution and delivery (warehousing, transport systems)
Scheduling
Only once these have been assessed and considered can the organisation make a decision on the best system for them at any particular point in time
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