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Unlock This CourseEvery business that makes products has to decide how to produce them. The way a company chooses to make its goods can have a huge impact on costs, quality, speed and customer satisfaction. Understanding different production methods is crucial for any business owner or manager.
There are three main types of production that businesses use, each with their own benefits and drawbacks. The choice depends on factors like the type of product, how many items need to be made and what customers want.
Key Definitions:
The production method a business chooses affects everything from how much products cost to make, to how quickly they can respond to customer orders. Getting it right can mean the difference between profit and loss, satisfied customers and complaints and business growth or failure.
Job production means making products one at a time, usually to meet specific customer requirements. Each product is unique and often made by skilled craftspeople or specialists. Think of a wedding dress maker, a custom car builder, or an architect designing a house.
In job production, workers focus on creating one complete product from start to finish. The process is flexible because each item can be different. Workers need to be highly skilled and able to adapt to different customer needs.
• Products meet exact customer needs
• High quality and attention to detail
• Flexible and can adapt quickly
• Workers feel motivated and skilled
• Can charge premium prices
• Very expensive to produce
• Takes a long time to make
• Needs highly skilled workers
• Cannot benefit from bulk buying
• Limited production capacity
• Rolls-Royce luxury cars
• Bespoke furniture
• Wedding cakes
• Custom software
• Haute couture fashion
Rolls-Royce uses job production to create some of the world's most expensive cars. Each car takes months to build and can cost over £300,000. Customers can choose from millions of colour combinations and have their initials embroidered in the seats. This allows Rolls-Royce to charge premium prices, but it means they can only make about 4,000 cars per year compared to mass-market manufacturers who make millions.
Batch production involves making products in groups or batches. All items in one batch are identical, but different batches can be different products. It's like a bakery making 50 chocolate cakes in the morning, then switching to make 30 strawberry cakes in the afternoon.
In batch production, workers and machines complete one stage of production for the whole batch before moving to the next stage. This method is very common in food production, pharmaceuticals and clothing manufacturing.
• Can produce variety of products
• More efficient than job production
• Better quality control
• Can respond to demand changes
• Lower unit costs than job production
• Machines may sit idle between batches
• Need to store finished goods
• Time lost switching between products
• Still relatively expensive
• Requires careful planning
• Bakery products
• Pharmaceutical drugs
• Paint manufacturing
• Seasonal clothing
• Book printing
Innocent uses batch production to make their smoothies. They might make 10,000 bottles of strawberry and banana smoothie in the morning, then clean the equipment and make 8,000 bottles of mango smoothie in the afternoon. This allows them to offer variety while keeping costs reasonable. However, they need to carefully plan which flavours to make based on demand forecasts and they must store finished products until they're delivered to shops.
Flow production, also called mass production, involves making large quantities of identical products continuously. Products move along a production line where each worker or machine performs one specific task. Think of car factories or soft drink bottling plants.
In flow production, the product moves from one workstation to the next in a continuous flow. Each worker specialises in one small task, which they repeat over and over. This creates a very efficient system for making large quantities of identical products.
• Very low unit costs
• High output and efficiency
• Consistent quality
• Can use automation
• Benefits from economies of scale
• No product variety
• High setup costs
• Boring, repetitive work
• Inflexible to changes
• If one part breaks, whole line stops
• Car manufacturing
• Soft drink bottling
• Electronics assembly
• Newspaper printing
• Fast food preparation
McDonald's revolutionised fast food with flow production. Each worker has a specific job - one person grills burgers, another adds sauce, another wraps the finished product. This system allows McDonald's to serve millions of customers quickly and cheaply. However, it means limited menu flexibility and workers can find the repetitive tasks boring. The company has had to invest heavily in training and technology to maintain quality and efficiency.
Businesses must carefully consider which production method to use. The decision depends on several key factors that can make or break a company's success.
Market Demand: How many products do customers want? Job production suits low demand, while flow production needs high demand to be profitable.
Product Type: Standardised products suit flow production, while unique products need job production.
Available Resources: Flow production needs large investments in machinery and facilities.
Skill Level: Job production requires highly skilled workers, while flow production can use less skilled workers.
The choice of production method affects every aspect of a business. It determines costs, quality, speed of delivery and even employee satisfaction. Understanding these impacts helps businesses make better decisions.
Job production has the highest unit costs but can charge premium prices. Flow production has the lowest unit costs but faces price competition. Batch production sits in the middle.
Flow production is fastest for large quantities. Job production is slowest but most flexible. Batch production offers a compromise between speed and flexibility.
Job production typically offers highest quality through skilled craftsmanship. Flow production offers consistent quality through standardisation. Batch production quality varies with batch management.
Technology is changing how businesses approach production. Many companies now use flexible manufacturing systems that can switch between different production methods depending on demand. Automation and robotics are making flow production even more efficient, while 3D printing is making job production more affordable for some products.
Companies like Tesla are pioneering new approaches that combine the best of all three methods. They use flow production for their main car assembly but offer job production-style customisation for colours and features. Meanwhile, advances in artificial intelligence and robotics are making it possible to achieve flow production efficiency with batch production flexibility.
Successful businesses often use different production methods for different products or at different times. A clothing company might use flow production for basic t-shirts, batch production for seasonal fashion items and job production for haute couture pieces. The key is matching the production method to the product and market requirements.