Types of Production Methods (SL IB Business Management)

• Production is the transformation of resources (e.g. raw materials components and processes) into finished goods or services
  • Goods are physical products, such as bicycles and T-shirts
  • Services are non-physical items such as hairdressing, tourism and manicures
• Businesses can organise their production processes in a variety of ways
  
   

The main methods of production
 

• The method of production used by a business will depend upon a number of factors
  • The level of output required to be produced
  • The nature of the product
  • Whether the product is standardised or customised
  • The level of automation used in production

• Job production is where products are made to meet the specific requirements of individual customers
  • Each item is produced separately (a job) and the production process is tailored to the unique specifications of the customer's order
    
    
• The key characteristics of job production include
  • Customisation
  • Low volume
  • Variability
  • Skilled labour
  • Longer lead times
     

• Customisation: Each product is customised according to the customer's specific requirements allowing for personalised goods or services to be created
  
  
• Low Volume: Job production is typically used for unique or specialised products that are not produced in large quantities
  
  
• Variability: Since each product is made to order there can be significant variation in the production process and materials used
  
  
• Skilled Labour: Job production often requires skilled labour such as craftsmen or technicians as the manufacturing process may involve intricate tasks or specialised techniques
  
  
• Longer Lead Time: Due to the customisation and individual production approach job production usually has longer lead times compared to other production methods and the time required to fulfil each order can vary depending on its complexity and the availability of resources
   

The Advantages & Disadvantages of Job Production

Advantages

Disadvantages

Allows for high levels of customisation This enables businesses to cater to the unique needs   It provides the flexibility to adapt to changes in customer demands and market trends   With a focus on individualised production, job production allows for greater attention to detail and quality control This often generates the ability to set a premium price   Job production offers a more personalised customer experience as customers have the opportunity to be actively involved in the design and creation process This is likely to lead to customer loyalty

Tends to be more expensive than other production methods due to the customisation involved    The customised nature of job production often leads to long lead times which may not be suitable for customers requiring products to be delivered quickly Job production can be complex and challenging to manage compared to other production methods It requires close coordination and communication between the production team and the customer to ensure that the final product meets the desired specifications   Low-volume production is unlikely to allow a business to achieve economies of scale

 

Examples of Job Production

Furniture made to order, where customers can choose the design, dimensions, materials and finishes	Tailored clothing such as suits or wedding dresses where each garment is made to fit the specific measurements and preferences of the individual customer	High-end jewellery pieces, especially those with unique designs or personalised engravings

• Batch production occurs when products are produced in groups or batches
  • A certain quantity of products is produced together before moving on to the next batch
  • Each batch goes through the entire production process, from raw materials to the finished product, before the next batch begins
  • Batches are usually of a standardised size and composition and follow a certain sequence of operations 

Batch production is a common approach used in industries including pharmaceuticals, beauty products and food processing
 

• Batch production strikes a balance between customisation and cost-effectiveness, making it a suitable production method for industries that deal with diverse product ranges and varying customer needs
   

Advantages & Disadvantages of Batch Production

Advantages

Disadvantages

Batch production allows manufacturers to switch between batches and cater for varying customer demands It can be more cost-effective compared to flow production especially when producing items in smaller quantities It allows a business to benefit to some extent from purchasing economies of scale as larger quantities of stock may be purchased than with job production Quality issues can be identified and defects can be rectified within a specific batch before moving on to the next, minimising the impact on the entire production line Batch production is suitable for customised or specialised products because manufacturers can tailor each batch to meet specific customer requirements

Setting up the equipment and configuring the production line for each batch can be time-consuming and may result in idle time between batches Often leads to the accumulation of stock which requires storage and careful management to avoid wastage While batch production offers flexibility it is not as adaptable as other production methods such as flow production Rapid changes in product demand or frequent product variations may be difficult to manage Frequent start-up and shutdown of machinery can put additional stress on equipment, requiring regular maintenance and repair to ensure smooth operations

• Flow production occurs when a product is produced in a continuous sequence of operations on a production line
• It involves the movement of materials or components through a series of workstations or machines with each workstation performing a specific task or operation
  
  • • As a product moves along the production line it undergoes a series of operations, such as assembly, testing, packaging or quality control until it is completed
• This method is commonly used in industries that produce high volumes of standardised products such as automobiles and consumer electronics
  
  
• The key characteristics of flow production include:
• Division of labour
• Continuous movement on a production line
• Standardisation
• Automation
• High volume

 

• Division of labour: Different tasks are allocated to different workstations or machines, allowing workers to specialise in a specific task
  
  
• Standardisation: The manufacture of identical products helps to ensure consistency and the smooth flow of production
  
  
• Continuous movement: The product moves continuously from one workstation to another, minimising idle time and maximising productivity
  
  
• High volume: Flow production is suitable for high-volume manufacturing as it enables the efficient production of large quantities of identical or similar products
  
  
• Automation: Flow production often involves the use of machinery and automated equipment to perform repetitive tasks quickly and accurately
  
  

Advantages & Disadvantages of Flow Production

Advantages

Disadvantages

Flow production minimises setup time and reduces idle time leading to improved overall efficiency The continuous flow of production eliminates the need for frequent equipment start-ups and shutdowns, reducing energy consumption and minimising material waste Labour costs may be lower due to automation and processes that require less skilled workers Allows for greater control over product quality because it is easy to identify and address any deviations or defects early on   Enables fast production resulting in short lead times which help companies respond more quickly to market demands

Implementing flow production systems often requires significant capital investment to purchase expensive manufacturing equipment and automation technologies  It relies on the reliability and efficiency of equipment and machinery If any part of the production line breaks down it can disrupt the entire process, leading to costly downtime   It is best suited for standardised products which can pose challenges in industries that require frequent product customisation If a defect is detected it may require the stoppage of the entire production line resulting in substantial losses Relies on a steady supply of raw materials and components Any disruption in the supply chain can have a severe impact on production

• Mass production is usually achieved through flow production and involves the manufacture of large quantities of standardised products, resulting in low costs per unit compared to other methods of production
  
  
• Customisation is usually associated with job production or small-scale batch production, allowing customers to design products from scratch
   
• Mass customisation seeks to bridge this gap by offering flexibility with a range of customisable options within a standardised production process alongside the low unit costs typically associated with flow production
  • It uses technology, such as computer-aided design (CAD), flexible manufacturing systems and data analytics to efficiently accommodate customer preferences
    
    

A comparison of mass production, customisation and mass customisation
 

• The process of mass customisation typically involves three key stages
   

The Three Stages of Mass Customisation

Stage	Explanation	Example
1. Choice	Customers are presented with a range of pre-designed product options, features or configurations from which they can choose	E.g. Audi customers can select a specific model, such as the Avant, Saloon, Coupé or Sportback and decide the trim level from Premium, Premium Plus and Prestige
2. Customisation	Customers have the opportunity to personalise their chosen product by selecting specific features, colours, sizes or other configurable elements	E.g. Audi customers can choose extra features such as driver assistance tools, a towbar or a dashcam
3. Production	Once the customer's preferences are received the manufacturing process can begin	The production system is designed to efficiently produce the customised product, often using flexible manufacturing techniques such as cell production E.g. At Audi each new vehicle takes between six and twelve weeks to manufacture on the highly automated production plant in Germany, with steps involving the use of 3D printing and artificial intelligence

 

• Mass customisation offers several advantages for both businesses and customers
  
  
  • Customers can obtain products that match their unique preferences and requirements and are likely to be highly satisfied which leads to positive feedback and loyalty
    
    
  • Businesses can adapt to changing market demands effectively by offering a wide range of product variations without the expense of full customisation
    
    
  • By utilising standardised components and processes mass customisation allows businesses to achieve economies of scale, reduce stock costs and improve overall production efficiency
    
    
  • Mass customisation can differentiate a company from competitors, attract new customers and create a perception of high value and innovation
    
    
• However, mass customisation usually requires heavy capital investment in technology and variable costs tend to be higher than for standardised, mass produced items