Business operations

• Production planning and scheduling

  • Making sure that the correct number of items are produced to fulfil order on time
• Production department functions


  • Deciding the best production methods to use
  • Managing product quality (including process control and monitoring)
• Production


  The process of changing inputs such as labour services into goods and services that can be sold
• Methods of Production


  • Job
  • Batch
  • Flow/Mass
• Job Production


  • Involves the manufacture of an individual good from start to finish
  • Each product is different and offers a unique good for the consumer or meets specific consumer requirements
• Batch Production


  • A small number of identical products are made at once
  • Each batch goes through one stage of the production process before moving onto next stage
• Flow/Mass Production


  • Goods are produced continuously usually on a production line
  • Partly finished goods move along the assembly line with parts being added through the process
• Job Production


  • Wedding dresses
  • Hairdresser
• Batch Production


  • Clothing Manufacturer
  • Bakery
• Flow/Mass Production


  • Golf balls
• Advantages of Job Production


  • Unique ➔ bespoke ➔ to customer specification
  • Higher quality ➔ product is made one at a time ➔ everyone different
  • More products can be produced ➔ allow for higher sales
  • Costs for producing each product (unit costs) are lower
  • Production is more efficient ➔ workers can specialize in performing specific tasks
  • Specialist machinery can be used ➔ speed up production
  • Efficient use of labour and machines ➔ division of labour
• Advantages of Batch Production

  • Produces similar/identical goods ➔ production quicker
  • Reduce unit costs of production ➔ benefit from economies of scale
• Quality


  Involves meeting a standard for a good or service to meet consumer needs and expectations
• Disadvantages of Job Production

  • Expensive ➔ workers tend to have higher skills and therefore higher wages
  • Time-consuming ➔ completion takes longer due to greater attention to detail and high quality
  • Replacements more difficult to find ➔ products were made for a specific purpose to a particular design
  • Products no longer produced to a unique specification
• Businesses will try to achieve quality through

  1. Purchasing the right raw materials and components

  2. Having the best production processes

  3. Employing the right people

  4. Training employees

  5. Implementing quality assurance and quality control
• Disadvantages of Batch Production

  • Quality is not as high compared to job production ➔ less time and care is taken on individual products
  • High level of stock may be needed ➔ materials have to be stored and this is expensive
  • Machines have to be cleaned and reset before producing a different batch ➔ this takes time and adds to costs
  • Machinery is expensive ➔ smaller businesses may not be able to afford it
• Disadvantages of Flow/Mass Production

  • Lack of flexibility ➔ flow production produces identical products ➔ what if the customer wants a slight modification?
  • Bored workers ➔ could lead to lower quality
• Quality Awards


  Evidence of high standards - these show customers that certain standards have been met
• Wastage


  Occurs when products cannot be sold because they are of poor quality, or damaged, or stock is out of date
• Production Processes


  • Crushing
  • Cleaning
  • Refining
  • Lead
  • Polypropylene
  • Moulded
  • Plastic
• ICT (Information and Communications Technology)


  The computing and communications systems that a business might use to exchange information with stakeholders
• 3D Printing


  Products and components can be produced using 3D printers working from computer-drawn designs
• Quality Control


  Involves inspecting a sample of goods produced at the end of the production process to ensure that specifications have been met. Goods which do not meet the standards are scrapped or are sold as seconds.
• How can ICT be used in a business?

  • Communication (emails/texts/word processing/ordering)
  • Marketing (websites/spam)
  • Stock control/customer details (databases/tills/barcodes)
  • Record keeping and analysis (spreadsheets/finance/online banking)
  • Selling (online auction sites)
  • Research (using the internet)
• Quality Control


  • Inspection is carried out by a specialist
  • Reduces the risk of a faulty product reaching the customer
  • Problem areas can be identified and action taken
• Why would employees be concerned by the introduction of new technology?

  • May lose jobs (technology may replace need for workers/changes require fewer employees)
  • Promotion opportunities may be reduced (with smaller workforce)
  • Lower morale (lack of job security/promotion opportunities)
  • Fewer hours (reduced pay)
  • Need to familiarise with technology (need to be trained/may need to work harder)
  • Health risks (technology could be dangerous)
  • New skills may be gained (which may lead to higher pay/greater opportunities)
• Computer-Aided Design (CAD)


  Allows designers to produce new products using 3D models displayed on computer screens
• Quality Control


  • Waste levels can be high as a fault will only be found at the end of the process
  • Requires specialist personnel
  • Operatives may feel demotivated as they are "being checked up on"
• Quality Assurance


  A guarantee given by producers to consumers that certain standards have been met throughout the production process. Legal standards have been met and / or codes of practice have been followed.
• Advantages of CAD


  • Speeds up design (simple to edit)
  • Alternative designs can be considered (simple to edit)
  • Producing drawings of finished goods and parts/no need to build models (prototypes) nor finished goods (reduce costs)
  • To view finished goods before manufacture to find best design (improves quality and accuracy of the design)
  • Testing (materials and design to reduce errors and reduce costs)
  • Linked to CAM to speed up production
• Disadvantages of CAD


  • Cost of setting up (machinery/training of workers)
• Computer-Aided Manufacturing (CAM)


  Uses computers to operate robots and other machines in production lines
• Quality assurance involves


  1. Checking/inspecting quality at each stage of the production process

  2. Quality is the responsibility of everyone throughout the process

  3. Achieved through a system of total quality management

  4. Making everyone in a business responsible for quality

  5. Each employee treats the next person as if they are a customer and ensures what they pass on to them is of the correct quality
• Advantages of CAM


  • Can be linked with CAD (speeds up the whole production process)
  • Measurements easily transferred to manufacturing process
  • Less scope for error in production (more accurate/allows for standardised quality/greater customer satisfaction/fewer returns)
  • Used in mass production/flow production (easy to adjust/speed/cheaper)
  • Fewer employees (lower wage costs/less supervision)
• Disadvantages of CAM


  • Cost of setting up (machinery/training of employees/possible redundancy payments to unskilled workers)
  • Reputation of business if making redundancies
• Quality Assurance


  • Motivated staff as everyone is given responsibility
  • Focus on quality throughout the process
  • Less waste from reworking or scrapping faulty goods
  • Better reputation due to quality products
• Impact of technology on customers

  • Better service (as more work done by machines)
  • Lower prices (as lower total wage bill)
  • Inferior service (because of lower morale of employees)
  • Higher prices (to pay cost of machines)
  • No effect (as customers do not appreciate differences in service)
• Quality Assurance


  • Relies on commitment of all staff
  • Training must be provided
  • Productivity can be reduced
• Benefits of creating customer records using a database

  • More effective data handling (sort and search for customer records quickly/inputting the data)
  • It is easy to make changes (save your work and print it out again)
  • Can create reports (print out records and store hard copies)
  • Can create mail merge (speed up sending correspondence via letters)
  • Marketing (creating customer profile and loyalty scheme)
• Total Quality Management (TQM)


  Creates quality through continuous improvement, development of systems and products and by creating an organisational culture of quality