Production & Manufacturing: Land, Labour and Capital

Production and Manufacturing

• Production involves interconnected processes and is vital for business success
• Factors of production include land, labour, capital, and entrepreneurship

Land

• Land in business includes agricultural land for crops and real estate for factories
• Land includes natural resources
• Canada has an abundance of land, natural resources, and underground minerals

Capital

• Capital encompasses items needed to manufacture products like machinery, computers, desks, robots, and trucks
• It's crucial to differentiate between "capital" and "consumer goods"
• Trucks transporting goods from a factory are "capital," while trucks for personal use are "consumer goods"

Labour and Entrepreneurship

• Entrepreneurship is the drive and work ethic to start and run a business
• Labour refers to the work done by employees
• Physical labour involves using the body, like laying bricks or cooking
• Mental labour involves thinking, reasoning, and problem-solving, like lawyers or programmers

Knowledge

• Knowledge is the ability to use information and scientific research in business
• This includes industry trends, market conditions, customer preferences, technical skills, and organizational culture/processes
• Knowledge should be a factor of production in knowledge-based societies

Types of Production

• The best production method depends on the type of product/service and profitable production
• Unique products meet specific customer needs while others are mass-produced

Job Production

• Job production creates unique items using the same general process
• A custom kitchen is an example
• Advantages include high quality, varied work for employees, and tailored customer results
• Disadvantages include being labor-intensive and costly

Job Production vs. Craft Production

• Job production may use automation and a similar general process for each product
• Craft production is unique each time, using very little automation
• Examples are artwork or customized jewelry

Service Production

• Service production combines processes to deliver a service
• Teaching, catering, and car servicing are a few examples

Mass Production

• Mass production uses machines, robotics, and automated processes to create identical items
• It produces standardized products at the lowest unit cost
• An automobile assembly line is a common example

Advantages of Mass Production

• Mass production offers low labour costs
• It allows for fast production rates
• High accuracy is another advantage
• The cost per unit is low

Disadvantages of Mass Production

• It provides less variety in product types
• Expensive machinery is a requirement
• There is a lack of flexibility in adding individualized features
• Production halts during assembly line breakdowns or work stoppages

Mass Customization

• Mass production and mass customization are similar because they use automation for large volumes
• Mass production makes every product the same every time
• Mass customization allows each product to have some differences

The Production Process

• Planning ensures high-quality, on-time delivery, customer satisfaction, and company profits
• The four steps are design, purchasing, processing, and quality control

Design Stage

• Design is the stage where product or service ideas are created
• This stage combines art, science, and technology for marketable ideas
• This is when products/services are developed, and procedures are chosen

Purchasing

• Purchasing involves buying all the needed materials for the product or service
• Within a large business, the purchasing department handles buying ingredients on time and at a good price

Processing

• Processing is where goods are made or services are created/delivered
• Employees are trained, production schedules are set, products are inventoried/stored, and products are shipped
• In service businesses, processing often happens with the customer

Quality Control

• Quality control inspects products/services
• It ensures few errors and maintains excellence
• It aims to ensure products are dependable, safe, and adhere to standards

The ISO

• The International Organization for Standardization (ISO) in Switzerland provides standards for products, services, and systems
• ISO standards are voluntary but widely recognized

Benefits of ISO Ratings

• The benefits of ISO ratings include safe, reliable, high-quality products and services
• Ratings ensure compatibility of products from different sources
• They also ensure access to new global markets

Business Productivity

• Productivity measures how well a business uses its inputs to create outputs
• It measures production efficiency
• It is calculated by the ratio of input costs to output costs
• Productivity is related to profitability

Improving Productivity

• Businesses can improve productivity by using better machinery
• Careful management of spending can improve productivity
• Hiring skilled employees and training them can increase productivity
• Hiring qualified managers can improve organization within the workplace

Capital Investment

• Improving productivity can be done through capital investment
• Machinery replaces labor and saves on wages.
• Self-checkout lines demonstrate automation
• Increasing ICT is another capital investment type to improve productivity

Human Capital

• Human capital describes employee attributes, like education, skills, intelligence, health, loyalty, and punctuality
• It can be improved through investments in education, experience, and abilities.
• More investment in employees leads to a more productive and profitable business

Employee Training

• Giving workers skills and knowledge ensures productivity and boosts confidence
• Well-trained employees need less supervision, saving time and money
• Training also decreases turnover, saving money

Outsourcing

• Outsourcing means hiring a third party in the same country to carry out specific tasks
• Contracting out office cleaning or accounting services are a few examples

Offshoring

• Offshoring means moving manufacturing to countries where businesses believe higher profits may occur
• Often, this is due to cheaper labour
• An example is Apple computers produced and assembled in Asia
• A Canadian jewellery company might move its operations to Mexico

Nearshoring

• Nearshoring is a growing trend for businesses to develop supply arrangements in politically “friendly” countries
• Political uncertainties and international competition influence governments to adopt trade policies to maintain stable relationships

The IT Department

• Information technology (IT) refers to the use of computers, data storage, and networking
• This creates, processes, stores, secures, and exchanges electronic data
• IT is important because businesses rely on technology to collect, harness, and analyze vast amounts of data
• Information offers a major competitive advantage today
• IT is the job market of the future

Main IT Functions

• The role of the IT department is to fulfill three critical functions
• The first role is Infrastructure Set-Up. Which includes selecting the right technology and establishing the necessary circuitry
• The second role is Network Oversight, which establishes the parameters for the use of the IT systems
• The third role is Software Applications, which include setting up and maintaining applications that allow the company to function

IT Specialist Roles

• The IT specialist has many functions including:
• Facilitating communications within and between business departments
• It specialists typically develop and maintain the company's public presence via the website
• Providing technical support to customers is an IT specialist function

Software Engineer Roles

• Software engineers are behind business programs (software) for computers and mobile devices
• This includes producing programs used in business, home, Microsoft, and Adobe products
• This includes programming in the online gaming industry

Concerns in the IT Field

• The IT field requires constant training to keep up
• Often, IT work is contract-based with no benefits or paid time off
• Automation, downsizing, and outsourcing have shifted low to middle-level jobs to low-wage countries or robots

IT Job Titles

• Job titles and descriptions in IT are constantly changing
• Some include IT consultant, cloud architect, computer forensics, mobile developer, web developer, software engineer, IT vendor, geospatial professional, and data modeller