5.2 Production

5.2.1 Production processes

Types of production:

Job production

Definition: Job production is the production of a single, unique product or service tailored to customer specifications.

Impact: Best for niche markets or custom-made products where customer satisfaction and personalisation are prioritised.

  • Advantages:

    • High quality

    • More motivated workers

  • Disadvantages:

    • Time-consuming

    • Costly

Batch production

Definition: Batch production involves producing a set quantity of a product at once, where each batch goes through one stage of production before moving to the next.

Impact: Efficient for producing larger quantities without losing flexibility, suitable for seasonal or varied demand.

  • Advantages:

    • Flexibility to change between batches.

    • More cost-effective than job production.

  • Disadvantages:

    • Time lost switching between batches (downtime).

    • Potential for overproduction if demand isn’t accurately predicted.

Flow production

Definition: Flow production is a continuous production process where products move from one stage to the next without interruption.

Impact: Ideal for mass production industries; maximizes efficiency and minimizes costs, though limited in adapting to market changes or custom requests.

  • Advantages:

    • Consistent quality

    • Efficient

    • Lower average costs

  • Disadvantages:

    • High initial costs

    • Lack of flexibility

    • Low motivation

Labour and capital-intensive production

Labour-intensive production

Definition: Labour-intensive production is a production that relies heavily on human labour rather than machinery or automation.

  • Advantages:

    • Creation of employment

    • Can adapt more easily to changes in demand or design

  • Disadvantages:

    • High labour costs

    • Risk of human error

Capital-intensive production

Definition: Capital-intensive production is a production that relies on machinery and technology rather than human labour.

  • Advantages:

    • Consistent quality

    • Reduced long-term labour costs

  • Disadvantages:

    • High initial costs

    • Lack of motivation

Productivity

Definition: Productivity is the amount of output produced per unit of input.

Formula: Productivity = Total Output/Number of Workers

Impacts of productivity improvements:

  • Decreased production costs - Improved productivity can lower average costs per unit.

  • Increased employee morale - Improved productivity may lead to higher wages or bonuses, boosting employee motivation and retention.

  • Increased output - Firms can produce more goods or services within the same time frame due to productivity improvements, which allows them to meet higher demand.

  • Competitive Advantage - Lower costs enable competitive pricing or increased investment in quality, attracting more customers.

5.2.2 Principles of Lean Production

Definition: Lean production is a type of production that involves minimizing waste and maximising efficiency.

The key principles of lean production include:

  • Just-in-time (JIT) production - A management strategy which involves the delivery of raw materials only as they are needed in the production process. This minimises inventory costs and reduces waste.

  • Kaizen production - A Japanese term meaning "continuous improvement." Kazien production involves small, consistent improvements in processes, driven by employee involvement.

  • Effectively using resources - Lean production involves the efficient use of resources such as time and labour to reduce costs and increase productivity.

5.2.3 Impact of technology in production

The use of robotics in production

Definition: Robotics in production involves using automated machines to perform tasks traditionally done by human workers.

  • Advantages:

    • Increased productivity

    • Consistent quality

  • Disadvantages:

    • High initial costs

    • Limited flexibility

Balancing cost, productivity, quality and flexibility

Cost - Implementing advanced technology would require high initial costs but would reduce long-term production costs due the decreased labour required.

Productivity - Productivity would increase as technology can speed up processes and allow for 24/7 operation.

Quality - Technology enables better consistency, resulting in fewer defects and higher-quality products.

Flexibility - Some machinery or devices may limit flexibility as they are often designed for specific tasks or standardised production processes.