Production Productivity and Efficiency

• what is job production?

  the production of one off items to meet the specific needs of each individual customer
• what is batch production?

  Manufacturing process where a set of identical products are produced together in a single batch.
• what is flow production?

  a capital intensive production technique in which items flow along a production line in a continuous process
• what is cell production?

  workers are organised into teams where each group is responsible for a section of the manufacturing process or for one product all the way through
• what is productivity?

  measures the output in a production process per unit of input
• what is efficiency

  the effective uses of resources to minimise inputs and maximise outputs in operations managemnet
• what is capital intensive production?

  a type of production that uses a relatively high proportion of capital (machinery) in production
• what is a labour intensive production?

  when production uses a relatively high proportion of labour (workers)
• advantages of job production?

  • customer requirement’s and changes can be handled
  • associated with higher quality
  • employees are more motivated
  • a flexible production method
• disadvantages of job production?

  • individual cost of one unit may be high
  • often labour intensive
  • high labour costs
  • requires close consultation with client
  • reliant on high skills
• advantages of batch production?

  • costs saved by buying in bulk
  • still allows some choice for customers
  • specialist staff/equipment at each stage
  • allows firms to handle unexpectex orders
• disadvantages of batch production?

  • time consuming to switch batches
  • maintain higher stocks of raw materials
  • reduced motivation
  • size of batch dependent on capacity allowed
• advantages of flow production?

  • cost per unit is reduced
  • suitable for manufacture of large quantities
  • capital intensive so can work constantly
  • less need for training
• disadvantages of flow production

  • long time to set up
  • reliant on high quality machinery
  • high raw materials
  • needs warehouse
  • less differentiation for customer
  • production is shut down if flow is stopped
• factors to consider when deciding a method of production?

  • target market
  • technology
  • resources
  • standards
• ways to improve productivity and efficiency?

  • training
  • improved motivation
  • more equipment
  • better equipment
  • better quality raw materials
  • improved organisation of production
• why efficiency is important?

  • gives a competitive advantage
  • generates more profit
  • maximise its return on investment
• unit cost equation?

  total production costs/total output
• advantages of capital intensity?

  • economies of scale
  • better productivity
  • better quality
  • lower labour costs
• disadvantages of capital intensity?

  • significant investment
  • loss of competitiveness
  • may generate resistance to change
• advantages of labour intensify?

  • unit costs may still be low in low wage locations
  • flexible resource
  • continuous improvement
• disadvantages of labour intensity?

  • greater risk of problems with employee/employer relationship
  • high costs of labour turnover
  • need for continuous investment in training