5.1 Production Methods
Chapter 30
Production
How goods and services are produced.
Types of Production
Job Production
Batch Production
Flow Production, Line Production,
or Mass Production
Mass Customization
Cell Production (HL)
Job Production
Producing a one-off item specifically
designed for the customer.
– Can be small or large – but usually unique
– Examples: Wedding cakes, draperies,
Yangtze dam in China
Pros: motivating for workers as they
participate in the complete production
process
Cons: high unit costs per item
Batch Production
Products are made in separate groups with each
group going through the complete process
together
– Examples: a baker making rolls, cheerleading
uniforms
Pros: enables economy of scale if batches are large
enough, batches can be matched to demand, batch design
can be changed
Cons: high level of “work-in-progress” for
each stage of production, the work may be
boring and demotivating for workers, if
batches are small unit costs may be high,
cleaning may need to be completed
between batches
Flow Production or Line Production
(Mass Production)
Used when individual products move through one stage
of production to next when the product is ready.
– Examples: soda, pencils
Pros: capable of producing large quantities in short time frames,
and standardized items, labor costs are low because automated
equipment is used, inputs can be easily determined because of
constant known output, quality is consistent and easily checked at
multiple stages of production
Cons: high setup costs, boring repetitive tasks, demotivating for
employees
Video:
http://science.discovery.com/videos/how-its-made-pencils.html
Mass Customization
Combines job production with mass
production to customize products to suit
individuals.
– Examples: computers, automobile assembly
Pros: designs include customized elements to
standardized parts reducing consumer alienation,
differentiated products for consumers, low unit cost
for “customized” product, reducing boring and
repetitive tasks
Cons: high setup costs and equipment costs
Summary
Job
Batch
Flow/Line/Mass
Mass
Customization
Main Feature
Single one-off items
Group of identical
products pass
through each stage
together
Mass production of
standardized products
Flow production with
many standardized
components but
customized differences
too
Essential
Requirements
Highly skilled workforce
Labor and
machines must be
flexible to switch to
making batches of
other designs
Specialized, often
expensive, capital
equipment – but can be
very efficient
High steady demand for
standardized product
Many common
components
Flexible and multi-skilled
workers
Flexible equipment –
often CAM to allow for
variations in the product
Main
Advantages
Able to undertake
specialist projects or jobs,
often with high value
added
High levels of worker
motivation
Some economies of
scale
Faster production
with lower unit costs
than job production
Some flexibility in
design of product in
each batch
Low unit costs due to
constant working of
machines, high labor
productivity and economies
of scale
JIT stock management
easier to apply than with
other methods
Combines low unit costs
with flexibility to meet
customers’ individual
requirements
Main
Limitations
High unit production
costs
Time consuming
Wide range of tools and
equipment needed
High levels of
stocks at each
production stage
Unit costs likely to
be higher than with
flow production
Inflexible – often very
difficult and time consuming
to switch from one type of
product to another
Expensive to set up flowline machinery and each
section needs to be
carefully synchronized
Expensive product
redesign may be needed
to allow key components
to be switched to allow
variety
Expensive flexible
capital equipment needed
Cell Production
Splitting flow production into self-contained
groups that are responsible for whole work
units.
Performance Standards:
Productivity measured, quality, lead times
Pros: worker commitment and motivation is high
because there is team work and sense of
ownership in the work performed; job rotation
within the cell, increased productivity
Cons: need multi-skilled workers
HL
Cell Production
Splitting flow production into self-contained
groups that are responsible for whole work units.
Performance Standards:
Productivity measured, quality, lead times
Pros: worker commitment and motivation is high because
there is team work and sense of ownership in the work
performed; job rotation within the cell, increased productivity
Cons: need multi-skilled workers, need to be flexible,
workers need to be responsible
Bought-in
components
HL
Machining of
components and
quality checks
Sub assemblies
produced and
quality checks
Finished
goods
Final assembly,
quality checks
packaging
Switching from Job to BATCH
Considerations when changing from job
production methods to batch.
– Finance
Cost of equipment to handle larger volume of the batch
Higher stocking levels require more finance
– Human Resources
Less emphasis in an individual’s craft could demotivate
employees
– Marketing
Product is no longer custom
May have to promote lower prices and consistency in quality
Switching from Job or Batch to
FLOW
Considerations when changing from job or batch
production methods to flow.
– Finance
Cost of equipment to handle a large volume of production
Production delays during change over could create cash flow
problems
– Human Resources
Low motivation and boredom could occur
– Marketing
Market research becomes important to target larger markets
Accurate sales forecasting to match demand with output
Promotion and pricing will have to change to be geared
toward a mass market approach….this could change the
direction of the business.
Switching from Batch or Flow to
CELL
Considerations when changing from batch
or flow production methods to cell.
– Finance
Cost of equipment to handle multiple products
within a cell
– Human Resources
Recruitment or training of multi-skilled workers
Creation of work teams
– Marketing
Productivity should create more competitive pricing
Quality improvements should improve product
Choose a Production Method
Size of Market
– Very small markets are suited for job or batch
production
– Flow production is useful for producing a large
quantity of identical products for very large
markets with consistent demand.
– Batch production is suited for large production
runs at intervals of time….3X per year
Choose a Production Method
Amount of Capital Available
– Large amounts of capital are required for flow
production systems
– Small amounts of capital can be used to set
up job or batch production methods
Choose a Production Method
Available Resources
– Flow production requires large amounts of
unskilled workers
– Flow production requires land for large
factories
– Job and batch production requires a skilled
work force
More than One Way
Most businesses use more than one way
of producing their products.
Land Rover
– Line production of the standard products
– Batch production of their military version
– Job production for special orders that will be
hand assembled (bullet proof glass, gold
plated trim, Italian leather seats)