Business Management - Operations Methods PDF

5.2 Operations Methods Mtro. Ian M. Guillen Ortega Job production and Batch production Job production Job production refers to the production of unique The products are highly items that are tailor-made specialised and often to meet the needs of uni...

5.2 Operations Methods Mtro. Ian M. Guillen Ortega Job production and Batch production Job production Job production refers to the production of unique The products are highly items that are tailor-made specialised and often to meet the needs of unique. individual customers. Highly skilled workers Producing these goods produce a single good or and services is usually a provide a service to one very labour-intensive customer at a time. process. Why use this method? A business may choose to use job production In this situation, using Another reason for because customers other operations using job production have very specific methods that require might be if the number requirements that technology, for of customers is small cannot be met using example, would be too and demand is low. other operations expensive. methods. Advantages and disadvantages Batch production Batch production involves producing items in groups of identical products. Small changes are made in each batch so that a range of customers’ needs can be fulfilled. This method can be considered a compromise between job production and mass/flow production. Batch production has the advantage of producing large quantities, leading to high productivity and lower average costs through economies of scale. However, it does also allow a range of different products to be produced, which can meet the needs of different target markets. Examples Businesses that make a range of different products use batch production. An example is a bakery that makes batches of cupcakes and batches of cookies separately. Clothing manufacturers Zara and H&M are also examples of companies that use batch production, by producing skirts and other clothing items in batches of sizes, colours and styles. Why use this? Estimates are made by Batch production may be used businesses and then a batch is when the amount of demand produced. Alterations to created for certain products in production can be made by the market is unclear. analysing the demand after the first batch is created. Batch production is appropriate when a business has a range of Batch production may also be similar products that meet appropriate if some of the different consumers’ needs. If benefits of economies of scale this is not the case, then batch are desirable, but mass production is unlikely to be production is not feasible. appropriate. Advantages and disadvantages Exercise Mention a product or an industry, if it is job or batch production and explain. Mass/flow production and mass customization These methods are capital intensive and relate to products that are created on a very large scale. The economies of scale they achieve mean that production costs are lower than with job production and batch production methods Mass/flow production Mass production (also Mass/flow production is a known as flow production) continuous process involves the production of whereby a product moves large amounts of on an assembly line from standardized products on stage to stage. an assembly line. At each stage, a worker or robot performs some Products are continuously operation on the semi- being started and completed product, which completed. then flows to the next stage. Characteristics Mass production is likely to be capital intensive as it uses more machinery relative to workers. Often there may be no workers involved at all. But mass production may also involve production lines where workers remain at a single station, performing the same task over and over again, perhaps thousands of times a day. This generates massive economies of scale and high productivity, leading to low average costs. The downside, however, is that workers are unlikely to find their job motivating. This can cause problems with product quality. Why use this method? Mass production is well suited to large, consumer product companies. If the company enjoys a large, perhaps even global, demand for its goods, then mass production may be the only way this demand can be met within a reasonable time scale. In addition, companies that make standardized items are likely to use mass production, since machinery can produce massive quantities of identical products. If mass production is used, companies must be able to implement robust quality control techniques so that output can be regularly checked. Advantages and Disadvantages Mass customization Mass customization involves producing large quantities of goods that can be adjusted to customer specifications. This combines the flexibility and personalization of custom-made products with the low unit costs of mass/flow production resulting from economies of scale. Example Improvements in production technologies make mass customization possible. A variety of different mass-produced products can be made on the same production line. One of the most well-known examples of mass customization is in the production of cars. Car manufacturers use the same production line to produce the basic car model. However each car can be customized with a different steering wheel, a different dashboard, and different interior colors, seat coverings and types of wheels. Why use this method? Mass customization may be appropriate when economies of scale are needed due to intense competition in the industry but, as with a car, where the high prices of the products bring consumer expectations of individual specifications. Companies that produce lower priced goods, however, are also using mass customization to adapt their products to customer specifications. Advantages and Disadvantages