production, productivity and efficiency

• production methods - the way raw materials or components are changed to produce a complete product
• capital intensive production - products mainly produced by robots or machines

  can be either:

  • mechanised - both machinery and humans
  • automated - mainly carried out by machinery
• capital intensive production: advantages -

  • les employeee wages + costs.
  • machinery can work 24/7
  • quality can be standardised
• capital intensive production: disadvantages -

  • breakdowns can be costly
  • employees become demotivated
• labour intensive production - products mainly produced by humans
• labour intensive production: advantages -

  • customised products easier to make
  • humans can use own initiative and problem solve
• labour intensive production: disadvantages -

  • quality vary between products
  • skilled workers take time to train and paid more
• Job production - The complete task is handled by a single worker / groups of workers e.g customised high end product
• Batch production - quantity of one product made then quantity of another made
• Job production: advantages -

  • high quality produced
  • meet individual needs able customise product
  • worker has more satisfaction
  • position with USP in market
• Job production: disadvantages -

  • costs are higher
  • labour intensive
  • longer production lines = lower output
• batch production: advantages -

  • selection meet wider range of customers
  • economies of scale achieved
  • greater quality control
• batch production: disadvantages -

  • takes time switch production - less competitive
  • holding stock costs high amounts
  • work repetitive and boring
• Flow (mass) production - when large quantities of a product are made in a continuous process
• Flow (mass) production: advantages -

  • large quantities can be made - high economies of scale achieved
  • machinery can be used - keeping costs low
• Flow (mass) production: disadvantages -

  • not all same quality
  • high expense to se up which raises break-even point
  • large stock needed
• cell production - flow production one split up into number of self contained units

  each 'cell' responsible for
• cell production: advantages -

  • closeness cell members improves communication
  • workers become multi-skilled + more adaptive
  • greater motivation
  • quality improves
• cell production: disadvantages -

  • company culture encourages trust of workers
  • invest new materials
  • location of work need be eefficineet
• competitiveness - ability two deliver better value to customers than competitors
• competitive advantage - ability to add more value for customers than rival and attain a position of relative advantage
• methods of production

  1. job production
  2. batch production
  3. flow (mass) production
  4. cell production
• labour productivity - amount of work produced by a worker for the benefit of the business
• labour productivity (by output) - amount of output obtained from each employee

  calculation - output per period / number of employees at work x 100
• labour turnover calc - number of staff leaving / average number of staff in post x 100
• labour retention calc - number staff staying / number of staff in post x 100
• absenteeism calc - number of staff absent during period / total number of staff employed x 100
• impact about productivity: lower % -

  • delays completing orders
  • lack staff motivation
  • not efficient production
• impact about productivity: higher % -

  • technology that help workers produce at speed
  • staff motivated produce more
• Staff turnover/absenteeism: lower % -

  • staff want to come and stay at work
  • feel committed to business
  • work life balance
• Staff turnover/absenteeism: higher % -

  • expecting too much from workers
  • business not identifying problems in workplace
  • unmotivated staff
  • culture damaging attendance
• Hard HR - rate employees as just another resource of business
• Soft HR - treats employees as most important resource of thee business and a source of competitive advantage
• Labour productivity influence competitiveness: low % -

  • less products made = can't buy in economies of scale
  • high costs of storage of materials
  • less productive = higher wage = higher prices
• about productivity in influence competitiveness: higher % -

  • economies of scale be achieves
  • costs reduced
  • production more efficient
  • lower costs = increase profit margins
• staff turnover/retention influence competitiveness: low % -

  • experienced staff = better customer service/quality of products
  • quicker implementation of new products and methods as staff know how company works
• staff turnover/retention influence competitiveness: high % -

  • less stage = customer service suffer
  • increase costs pay sick pay
  • increase in training costs
• ways to improve productivity:

  • financial rewards
  • employee share ownership
  • consultation
  • empowerment
  • training
• types of consultation

  • pseudo consultation - employees no power in decision making
  • classical consultation - employees through representatives discussing matter which affect them
  • integrative con 0 employees directly meet involved in decision making on what involves them through unions
• what businesses need for high productivity:

  • good working practices
  • motivation off workers
  • flexibility of workers
  • flexibility of labour
  • education and training