10.1 (52) Operational management - Production methods for a growing business

10 / 10 Key Terms Test - Methods of Production

1. Job Production -  making one-off specialised products for each customer
2. Batch Production -  groups of identical items that pass through different stages of the production process at the same time
3. Flow Production - large scale production techniques occur when an item moves continuously from one stage of the production process to another e.g. cars, ice cream, Cadbury's cream eggs on a production line
4. Specilaisation - this occurs when individuals focus on a limited number of tasks.  Over time workers become very skilled at that task
5. Division of labour -  breaking a job down into small repetitive tasks that can be done quickly by workers or machines specialised in this one task.
6. Efficient Production (Efficiency) -
7. Lean Production - is an approach to production that aims to minimise waste.  It is a production approach that aims to use fewer resources by using them more efficiently.
8. Cell Production - cell production occurs when a product may need to be manufactured in a seperate part of the factory and outside the flow production process.  In car manufacturing one aspect could be engine building and another could be the bodywork paint spraying
9. Just-in-time-manufacturing (JIT) involves ordering supplies so that they arrive just when they are needed and making goods only when ordered by customers 
10. Unit cost - the average cost of making one product.

Learning objectives - To understand;

• how methods of production need to evolve as a business grows
• how flow production operates, its advantages and disadvantages
• how lean production methods can lead to efficiency

Production – The process of producing goods or services

http://www.bbc.co.uk/schools/gcsebitesize/business/production/methodsofproductionvid.shtml

This clip looks at what entrepreneurs take into account when producing their products.  The parts that are most relevant and which you should pay most attention too.  Discuss in your team the differences in carrying stock versus carrying raw materials and why stock levels might fluctuate.

Job production unwrapped

Batch production from willow trees to cricket bats and here to see the video
 

Flow production at Vienetta

Objectives of a growing business 

• to sell a larger number of goods and thereby make a profit
• to gain a larger market share, so that the business has more control of the market
• to reduce the costs involved in making each item

Total Quality Management (TQM)
Kaizan (TQM) - An attitude to quality which is based on continual improvement and the shift from a few employees being responsible for checking quality to the entire staff having a role to play

Standardisation remember this key term.  Job production is geared to making a single item to meet the needs of a customer.  If we standardise the job then we use all the same size and spec components to make sure that every product is exactly the same.  This saves on training and allows for greater job swopping as every task involved is always the same.  BMW train people to do 3-4 different tasks on a production line

Mass production involves producing very large quantities of a single product or producing a product on mass. This is achieved by having employees focus on one aspect of the production priocess.  The work then moves from one work station to another.  This production method usually allows the price paid by the consumer to fall.  If all cars were made by hand hardly anyone could afford to buy one!  Once set up assembly lines are difficult to change so you need to be confident that the demand is really there.  Work can also be very repetitive and very boring as there is a high level of repetition.

Lean production methods this is really about keeping the costs down.  Developed by the Japanese to make the process more exciting and looks for small ways to reduce costs. If a cost saving can be found it is classed as waste and the time or cost needs to be removed.  Everyone involved in the process is encouraged to look and think about cost savings not just the owners, directors and managers.

In the news - Ben and Jerry's Ice Cream

The production process - 

• Milk is collected from farms
• Milk is blended with eggs and sugar
• Mix is heated to kill bacteria
• Mix is homogenised to break up fat particles
• Flavour is added
• Mix is frozen and ice cream produced
• Chunks of tasty stuff is added to the ice- cream
• Swirls are added by the variagator
• Pint cartons are filled and lids fitted
• Ice cream cartons are deep frozen and lids fitted for transportation
• Before dispatch sample cartons are tested for quality.
• Cartons are bundled into packs of eight and dispatched

Econonomies of scale The reason why costs per item fall as more output is made

Automation the introduction of machinery and plant

Quality quality in usually means quality out.  Free range, local and ethical and organic and fair trade suppliers help to guarantee this

Batch production the advantage of making batches of ice cream is that all the same equipment can be used for the different flavours and different quantities can be made as flavours become more or less popular 

Division of labour having workers become specialists at one part of the production process

Flow production products made continuously along an assembly line, with something being added at each stage

Group activity Pu

Discussion Disc

Web based activity

Summary

• Ben and Jerry's Ice cream is marketed as a fun product at the luxury end of the market
• Production methods for large businesses can be more efficient than those of smaller businesses
• Batch production allows machinery and equipment to produce a variety of products without having to have separate production runs for each product

Quick Quiz 19 Production methods

1. In which year was Ben & Jerry's set up?
2. Why is the ice cream mix heated in the production process?
3. What is the function of a variegator in Ice Cream production?
4. Most of Ben & Jerry's ice cream is sold in what size cartons
5. What is flow production?
6. Give an example of deskilling
7. What is meant by capital intensive production?
8. Explain two disadvantages of flow production from the employees point of view?
9. Explain tow advantages of robots in the production process over human labour
10. Explain why emerging economies, such as China, are able to produce products cheaper than UK companies.

Worksheets
Testing your own knowledge.
So you think your a 'Production Methods' Paper 1 expert why not test yourself here to see worksheet followed by the 'Productivity' worksheet Paper 1

Nine mark question