Methods of Production

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There are many different ways companies can go about producing goods for their customers. When deciding which method to use, they must consider the following -

The actual product being made.

The quantity of product to be made.

The way the business will ensure the product's quality.

The way stock s managed.

The resources available (labor, machinery etc.).

Job Production - This is where a single product is made to a customers specification. The product is usually 'one-off'. This method of production is lobour-intensive and highly skilled employee is required to complete this product. Each job is completed before they start another.

Examples - Wedding Dress, Custom-designed Kitchen, Tailored Suit and House Extension Plans.

The emphasis with job production is on individuality, with a unique product or service designed and produced to individual taste. This type of production is frequently found in smaller businesses.

Advantages -

Work is very specific to customer demands so a higher price may be charged.

Employees are more likely to be highly motivated as they feel involved in the final product.

Suitable for 'one off' orders.

Disadvantages -

Expensive in terms of paying skilled craftsmen higher wages.

A wide variety of tools may be required to meet the demands of each job.

Each 'job' can take a long time to complete.

Batch Production - This method produces similar products in batches at the same time before another batch is started. Variety of flavors can be produced in batches. This method is used within the food industry.

Examples - Bread e.g. white,wholemeal.

Chocolate - dairy milk, fruit and nut, whole-nut.

Tins of soup - tomato, chicken, scotch broth.

Crisps - salt and vinegar, ready salted.

Work can be divided into different operations where each stage is completed before moving on. If batches are small then unit costs can be high as production has to halted and changed frequently.

Advantages -

Individual batches can be designed to differing needs.

Raw materials can be bought in bulk, economies of scale, therefore savings can be made.

The business does not need to have highly skilled workers therefore wage costs are kept down.

Disadvantages -

Delays may occur due to changing machinery settings for different batches.

Equipment and employees might not have anything to do in between batches, which costs money i.e. staff wages.

Mistakes made in batch could mean that the whole batch has to be thrown out which costs money in terms of raw materials, labour etc.

The cost of each item may be high if the batch size is small, to cover costs the business will have to charge the customer a higher price.

Flow ( sometimes referred to as 'Line') Production - this type of production is large-scale and items are produced continuously on production line/in stages. All the products are the same. This type of production is the capital- intensive and automation methods are used. Product flows through different stages and parts are added at each stage.

Examples - Car production, Newspaper industry, Paper and Mobile phones.

Advantages -

The large scale production means that the organisation can benefit from economies of scale - they can buy in bulk and obtain discounts, this leads to lowering costs. (Cost of production per unit falls as output increases).

Particularly suited to large quantities being made.

Production can be continuous, work 24/7.

Disadvantages -

If the part of the system fails it can affect the whole production process.

The individual customer's requirements cannot be met because each product is identical.

Large demand for products is needed because they are made in large quantities.