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5.1 - Production Methods

5.1 - Production Methods

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Published by IB Screwed

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Published by: IB Screwed on Oct 06, 2010
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08/27/2013

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 http://ibscrewed4business.blogspot.com/ 
5.1
 –
Production Methods
During the production process, the business takes raw materials and components, andconverts them into the required products. At each stage, value is added to the product,creating added value.
Labour Intensive
 
 –
When the majority of the production costs come from labour. This isusually the case in highly-skilled professions. Most personalised, job producing businesseswill be labour intensive.
Capital Intensive
 
 –
These businesses require high capital investment, including massproducing firms. Their main costs come from the machinery, raw materials, etc.
Job Production
This is when the product is made
one item at a time
as customers request it, and thereforeare only sold individually. Often a few similar units will be made at the same time.The whole process is seen as one operation, as the operative must complete the one taskbefore they can move on to the next job. The same person or team of people will work on itduring this entire time. The business is able to tailor the needs of the customer to the finalproduct, making it
unique
.
 
Advantages Disadvantages
 
The product exactly meets thecustomer
s requirements,meaning that it is
higher quality
 
 
Inspection and supervision areeasier
 
The customer can makealterations to the design duringthe process, increasing their
flexibility
 
 
Uniqueness results in
added value
 to the product
 
Requires teamwork, helpingemployee satisfaction and
motivation
 
 
This is more
expensive
andlabour intensive
 
Production is more
timeconsuming
 
 
The business will have a
longerworking capital cycle
 
 
Since they are not producing inbulk, they cannot really benefitfrom
economies of scale
 
 
 http://ibscrewed4business.blogspot.com/ 
Batch Production
In this type of production, a
group of similar products
are made simultaneously. A newbatch can be made once the first one is complete. The business may create multiplecomponents, and then assemble them to create the final product. This is called intermittentproduction because there are multiple steps that must be done, which are held as work-in-progress whilst they wait for the final assembly.
 
Advantages Disadvantages
 
The same machinery can be used,which means that they economiseon it
 
Can respond to customer ordersfaster by bring work-in-progressto final production stage
 
Better economies of scale
 
Easier to calculate costs
 
Allows for specialisation of theworkforce
 
There is still enough variety to suita range of customer needs
 
There is less flexibility as thebatch cannot be stopped once ithas started
 
There are greater storage costsfor work-in-progress
 
Employees may become boredwith producing the same thingsall the time.
Flow Production
This is when the production process involves passing parts along the stages of production ina regular flow. At each stage, more is added in a
continuous process
. There is no delaybetween any of the stages. The products are usually standardised.However, this is only effective if the
demand is also continuous
, otherwise there is like to beoverstocking. There must also be good planning to ensure that the production runssmoothly, with enough labour and materials available.
Line Production
This is a type of flow production. The products are assembled along a conveyor belt untilthere is a finished product.

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