Operations - Methods of Production

• What does "labour intensive" mean?

  Products are mainly produced by human workers
• How does human effort contribute to labour intensive production?

  It requires human creativity and effort
• What is "capital intensive" production?

  Products are mainly produced by machines and robots
• What are the initial costs associated with capital intensive production?

  High initial outlay and maintenance costs
• What is "mechanised production"?

  Production requiring both machinery and humans
• How do machines function in mechanised production?

  Machines carry out most work, controlled by humans
• What is "automated production"?

  Production mainly carried out by machinery/robots
• What limits human input in automated production?

  It is mostly controlled by computers
• What factors influence a company's choice between labour intensive and capital intensive production?

  • Finance available: High capital needed for capital intensive
  • Quantity: Large quantities favor capital intensive
  • Technology: Lack of technology favors labour intensive
• What financial consideration affects capital intensive production?

  A large amount of capital is required
• Why might a company choose labour intensive methods for low quantity products?

  Because tailored products are preferred
• What happens if the required technology is unavailable for production?

  The company must use labour intensive methods
• Job Production

  Job production is when one product is made to completion before another one is made. The product is made to the customer's own requirements and this results in a unique or one-off product being made. Products made by job production are usually made by hand by a skilled worker.
• Batch Production

  Batch production is when one group of identical products are made at any one time. All products in the batch move onto the next stage of production at the same time. Machinery and equipment can be cleaned and/or changed between batches to produce a different product. Batch production is often used when manufacturing a product that comes in different varieties, styles, or sizes.
• Flow Production

  Flow Production is when parts are added to the product as it moves along the production line. The final product will have been made by the time it reaches the end of the production line. As the product moves along the production line, machinery and workers have very specific tasks to do: one might screw something in and the other may paint something on the product before moving to the next task - known as division of labour.
• Benefits of Job Production:

  • The customer can get exactly what they want
  • High prices can often be charged because it is a unique/one-off product
  • Designs can be changed to suit individual customer needs
  • Employees experience making a range of products using different skills
  • Employees can be motivated by seeing the product being made from start to finish
• Costs of Job Production:

  • Highly skilled employees are required to make each different product and this can be expensive (labour intensive)
  • Specialist tools and equipment might be needed that can be expensive to buy
  • Can't always buy raw materials in bulk and might miss out on cost savings from bulk buying (economies of scale)
  • Can take a long time to make a unique product and this might decrease employee motivation and customer satisfaction
• Benefits of Batch Production:

  • Batches can be changed to suit the individual requirements of the customer, which results in higher customer satisfaction
  • Raw materials can be bought in bulk, therefore saving money
  • Cost savings can be made, as standardised machinery is used
  • The need for highly skilled workers is reduced
• Costs of Batch Production:

  • Equipment and employees may not have a role in between batches, which can increase labour and cost money
  • Any mistakes in one item can result in greater wastage within the batch and wastes time
  • The cost of each item might be high if the batch size is small, therefore the price charged to the customer might be higher
  • Employee motivation can be lower, as the task is repeptitive
• Benefits of Flow Production:

  • Large amounts of identical products are made
  • Raw materials can be bought in bulk, saving the business money
  • Production often uses lots of machinery (capital intensive) that, compared to humans, can work for longer and without breaks
  • Quality can be easily checked at different stages of production
• Costs of Flow Production:

  • The individual customer's requirements cannot be met becuase each product is identical
  • If a fault occurs during production, this can cause the whole production line to stop
  • Large demand for products is needed because they are made in large quantities
  • Motivation can be low among employees due to the repetitive nature of the work they have to do