IB Business and
Management
5.1 Methods of
Production
Learning Outcomes
• To understand and be able to apply the following
production methods: (AO2)
• Job (customised)
• Batch
• Flow (mass)
• Cellular Manufacturing
• To be able to evaluate the most appropriate method
of production for a given situation (AO3)
Central Question
What impact will 3D
printing have on traditional
methods of production in
the future?
Production – lets watch some
videos on how different products
are made – consider:
• Process in which raw materials, components and
finished goods are converted into new goods or
services.
What are the raw materials and
components?
What processes do they go
through?
What is the final Good or
Service?
Production Plan
• Incorporates the Objectives and Functions of the
whole business
• Before production begins, major decisions have to
be made –
– Plant layout
– Degree of automation
– Scale of production
– Method of Production
– Types of quality controls required
•
•
•
•
•
Choice of production depends
on:
The product being produced
The size of the market
The size of the business
The finance available
The technology available
Methods of production
Size of
production
Small
Job
Batch
Flow
High
METHODS OF PRODUCTION
Production Methods:
•
•
•
•
•
Job Production
Batch Production
Mass/Flow/ Process Production
Mass Production
Cellular Manufacturing
The method of production
chosen will have implications for:
• Ability to benefit from economies of scale
• Capital requirements
• Labour costs (a factor of the number and skill
of the labour force required)
• Lead times
• Flexibility
• Made-to-Measure or Standardised?
• Quality of products
• Employee motivation
• Price that customers are prepared to pay
Job Production
• Job production involves firms
producing items that meet the specific
requirements of the customer.
• Often these are one-off, unique items
• A single worker or group of workers
handles the complete task.
• Goods are normally only produced
once there is an order for them
Batch Production
• Goods are produced in lots
or batches
• Goods produced are similar,
or differ in one respect such
as shape or colour or size
• When one batch is finished
the machines may have to
be re-set before moving on
to the next batch
Flow/Line Production
• Flow production is a form of mass production where
different operations are progressively carried out in
sequence (assembly line)
• When one task is complete, the next stage must
start immediately
• Often capital intensive
Mass Production
• Mass production involves producing large amounts
of a standardised product
• Identical products are produced in large quantities
Task – Production Experiment
You will be split into 3
teams
Each team will use a
different method of
production
After the experiment you
will feed back to the rest
of the group about your
results
Discussion Questions
1. Which method of production ensures the highest quality dice?
2. Which method of production ensures the maximum number of
dice?
3. Which method of production made the most profit? Why?
5. Which method of production offers the opportunity for a
variety of products?
6. Which method of production requires very high-skilled labour?
7. Which method of production caters best customers’ individual
needs and wants?
8. Which type of production ended up with the biggest amount of
Work in Progress at the end of the task? Why might this be a
problem for a business?
TASK – WHICH
METHOD/METHODS OF
PRODUCTION?
For each of the following types
of product…..
• Which is the most likely method to be used?
• Are any other methods suitable?
• Can you think of examples of businesses that might
use these method of production to make this
product?
• Are any of the production methods definitely not
suitable? Why?
Air Craft
Housing
Cars
Newspapers
Suits
Task
• In groups discuss the
methods of production
that we have looked at
• Comment on these
factors in the table
provided
• Ability to benefit from
economies of scale
• Capital requirements
• Labour costs (a factor of the
number and skill of the
labour force required)
• Lead times
• Flexibility
• Made-to-Measure or
Standardised?
• Quality of products
• Employee motivation
• Price that customers are
prepared to pay
Labour Vs Capital Intensity
• Labour Intensive production is where more labour
(in terms of cost) is used in production than any
other input
• Capital Intensive production is where production
relies more heavily on capital (machinery)
Chocolate Video
• Watch the video and think about:
• What factors do you need to consider when
choosing between labour or capital intensive
approach to production?
Questions:
• What factors have lead to many businesses
becoming more capital intensive?
• What are the advantages of businesses becoming
more capital intensive?
• What are the disadvantages of being capital
intensive?
• Why is capital intensity less suitable for businesses
in the Tertiary sector?
• Which methods of production (batch, job, flow) are
usually more capital intensive?
Combining Methods of
Production
• In reality many manufacturers combine methods of
production
Example- Jaguar
• The Jaguar factory near
Coventry UK uses highly
automated flow production.
• However as every car is made
to order, at a point in the
production process job
production is used to add the
elements to meet the
customers specification
What about for our Case study
companies?
Task in pairs – 5 mins
• When businesses change their production
techniques there will be implications for the
different functional areas of the business.
• Human Resources
• Finance
• Marketing
What might these implications be?
Can you find an example from our case study
companies?
CELLULAR MANUFACTURING
Watch the videos and consider:
•
•
•
•
•
What is Cellular Manufacturing
What does it hope to achieve
Benefits?
Drawbacks?
Which products or industries would be suited to this
method?
Features of Cell Manufacturing
• Cell production has the flow production line split
into a number of self-contained units.
• Each team or ‘cell’ is responsible for a significant
part of the finished article
• team members are skilled at a number of roles, so it
provides a means for job rotation.
What would be the advantages and
potential disadvantages of organising
production in cells?
Advantages
•
•
•
•
•
•
Workers have autonomy
Workers have loyalty to their team
Teams given responsibility
Inter-cell competitiveness
Variety of work
Multiskilled workforce
Disadvantages
•
•
•
•
•
Lower productivity than mass production?
Potential conflict within teams
Conflict between cells if one cell ends up waiting
Duplication of machinery?
Initial training costs
Which Method To Choose?
• Choose one of our companies and analyse its
current method(s) of production
• Are they appropriate?
• Have they changed over time – if so why?
Will 3D printing change the
production and operations
management landscape?
What are the threats and
opportunities for
businesses?
Concepts
CONCEPT
CHANGE
CULTURE
ETHICS
GLOBALISATION
INNOVATION
STRATEGY
RELEVANCE TO METHODS OF PRODUCTION