Level 1
Business Studies
1.1 - AS90837
Demonstrate an understanding of internal
factors of a small business
Production Process
Students will identify and understand the methods
and costs relating to production:


Indentify the methods of production, i.e. job,
batch and flow
Describe the advantages and disadvantages of
each one.
What is Production?
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Production means the development
and creation of goods and
services using resources.
It is the physical output of a
manufacturing or service
company.
Production involves three
processes – raw materials,
work in process and finished
goods.
Methods of Production

Job Production

Batch Production

Flow Production
Job Production

Job production, involves producing a
one-off product for a specific customer.

Job production is most often associated
with small firms but large firms use job
production too.
Source: http://en.wikipedia.org/wiki/Job_production
Job Production
Examples:
1.
2.
3.
4.
5.
making railings for a specific house, building
repairing a computer for a specific customer
making flower arrangements for a specific
wedding
designing and implementing
an advertising campaign
building a new factory
Advantages of Job Production
1.
2.
3.
4.
work is generally of a high quality
a high level of customisation is possible to meet
the customer's exact requirements
significant flexibility is possible, especially when
compared to mass production
workers can be easily motivated
due to the skilled nature of the
work they are performing plus
variety of work.
Disadvantages of Job Production
1.
2.
3.
higher cost of production
(often labour intensive)
requires the use of specialist
labour (compare with the
repetitive, low-skilled jobs
in mass production)
slow compared to other
methods (batch production
and flow production)
Essential Features
(Job Production)
There are a number of features that should
be implemented in a job production
environment, they include:
 Clear definitions of objectives should be
set.
 Clearly outlined decision
making process
Batch Production
Batch production is the manufacturing
technique of creating a group of
components at a workstation before
moving the group to the next step in
production.
 Batch production is common in bakeries
and in the manufacture of sports shoes,
pharmaceutical ingredients, inks, paints
and adhesives. Source:

http://en.wikipedia.org/wiki/Batch_production
Examples of Batch Production
Bakery: produces a batch of white bread,
wholemeal bread, rolls etc
 Furniture Maker: produces dining room
furniture, ie a batch of tables, chairs and
cabinets
 Clothes Maker: produces a
batch of size 14 shirts,
size 12 shirts etc

Advantages of Batch Production

It can reduce initial capital outlay because a
single production line can be used to produce
several products.

Batch production can be useful for small
businesses who cannot afford to run continuous
production lines.

Provides employees with variety.
Advantages of Batch Production
(continued)
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If a retailer buys a batch of a product that does
not sell, then the producer can cease production
without having to sustain huge losses.
Batch production is also useful for a factory that
makes seasonal items, products
for which it is difficult to forecast
demand, a trial run for production,
or products that have a high profit
margin.
Disadvantages of Batch Production

There are inefficiencies associated with batch
production as equipment must be stopped, reconfigured, and its output tested before the next
batch can be produced.

Additional storage space is required
for stocks of raw materials which can
be costly.

Idle time between batches is known
as downtime.
Flow Production

When large quantities of a
product are produced in a
continuous process.

Sometimes referred to as
mass production.

Is the production of large amounts
of standardised products, including
and especially on assembly lines.
Flow Production

It is called flow production because products
look like they’re flowing down a production line
Flow Production
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Mass production is capital intensive and energy
intensive, as it uses a high proportion of
machinery and energy in relation to workers.
It is also usually automated to the highest extent
possible. With fewer labour costs and a faster rate
of production, total expenditure per unit of product
is decreased.
However, the machinery that is needed to set up
a mass production line can be so expensive that
there must be some assurance that the product is
to be successful to attain profits.
http://en.wikipedia.org/wiki/Mass_production
Advantages of Flow Production
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Very time efficient
Costs and price are able to be kept low resulting
in higher sales
Generally capital intensive and therefore saves
on labour costs
Unskilled workers generally required, therefore
little training is needed
Time saved as no need to move around the
factory
Goods can be produced quickly and cheaply
Disadvantages of Flow Production
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Can be very boring for workers and provides little
job satisfaction
Initial set up capital costs can be very high
When one machine breaks down the entire
production line may have to be stopped.