Methods of Production

Job Production

  • Each product is made to order. The product is likely to be unique with one product being finished before the next is started.
  • Job production often requires skilled workers who can do a variety of tasks.
  • Job production may be used to make bespoke products such as – wedding cakes, made to measure suits, designer homes.

Advantages

  • Product is unique so products can command a higher price.
  • Product should be high quality as skilled workers are involved.
  • Customer can request changes to the product specification
  • Workers are motivated and engaged by their involvement.
  • Product is not made until an order has been received.
  • Skilled workers need high wages, pushing up costs of production.

Disadvantages

  • Skilled workers need high wages, pushing up costs of production.
  • Production takes longer to complete – customers may not be willing to wait and may go to a competitor who has produced batches for sale.
  • Organisation may experience cash flow problems as they may have to wait until the job is finished before getting payment.

Batch Production

  • Used to produce a group of similar products at once, with each batch moving through stages of the production process at the same time.
  • In between batches, the product specifications can be changed eg size or flavour.
  • Batch production allows greater use of machinery but workers may still be involved eg moving batches between each stage, cleaning and resetting machines between batches.
  • Batch Production is often used to make food products (different flavours), clothing (different sizing), and construction (eg a housing estate).

Advantages

  • Workers can specialise during the process, increasing productivity.
  • More scope for using machines – bringing down average unit costs.
  • Batches can vary in size or design, – meeting different customer requirements.

Disadvantages

  • Time consuming to clean and reset machines between batches.
  • If holding inventory of partly finished goods –the risks and costs of storage will be high.
  • Some machinery and equipment may be under-used as it may be unused whilst waiting for the next batch to begin.

Batch Production

  • Products are made continuously on a production line, with a different process carried out at each stage.
  • Every stage on the production line will be in action simultaneously.
  • Flow production can be fully automated or mechanised using unskilled workers.
  • Flow Production is likely to be used to make products for a mass market eg computers, household appliances.

Advantages

  • Use of automated production means a higher rate of output and greater accuracy.
  • Fewer and/or less skilled workers needed, reducing the wage bill.
  • Lower production costs allow a lower selling price leading to higher sales.

Disadvantages

  • Set up costs are high – investment in machinery required.
  • Products are standardised – meaning there may be limited choice for consumers.
  • Workers may get bored and de-motivated doing repetitive work.

Factors Affecting Choice of Production Method

Nature of the Product

  • An unusual product may use a job production method so that features can be modified to suit customer requirements.
  • If different versions of a product are needed – eg sizes, colours or flavours – batch production methods may be used.
  • Products with standardised features may use flow production as greater use of machinery and automation can be made.

Size of the Market (Level of Demand)

  • Products required on a ‘one-off’ basis, or for a ‘niche’ market are suited to job production methods.
  • Products required for the ‘mass’ market are more suited to flow or batch methods of production.

Quality Standard Required

  • Products with bespoke features, needing skilled judgements to identify problems with quality, may be suited to a job production method of production.
  • Products needing precision and/or consistency of quality may use an automated system, with flow or batch methods of production.

Availability of Resources (Finance/Staff/Technology)

  • If start-up finance is available, flow methods may be chosen, otherwise a more modest job approach may be used.
  • If the organisation has sufficient space, it may set up a flow production assembly line, as opposed to job production if space is limited.
  • If the workforce available is skilled, then job production may be used, whereas a shortage of skilled workers might require the use of a flow production approach.
  • As technology advances there are more tasks which can be automated, opening possibilities for greater use of flow production.