Production Processes

• job production:

  a method of creating a single product to meet an individual order
• job production: advantages

  -charge higher prices

  -high quality products

  -work variety = less demotivation in employees
• job production: disadvantages

  -expensive to produce

  -skilled employees needed
• flow production:

  using a production line to make goods continuously and in large numbers
• flow production: advantages

  -produce large volumes of produce

  -employees can specialise in small number of tasks (division of labour - experts through repetition)

  -reduces cost per unit
• flow production: disadvantages

  -high initial machinery costs

  -lack of flexibility

  -employees may become demotivated (little variety)

  -large investments into expensive machinery leads to increased risks
• efficiency:

  measures how well a business uses its resources to make its products or provide its service - measured through cost per unit
• business efficiency will depend on:

  -employee motivation

  -the skills of the managers

  -the quality of the suppliers

  -investment into technology

  -how products are made
• lean production:

  continually working to reduce the resources used to create products: raw materials, labour, machines and premises
• waste reduction includes reducing:

  -throwing away products that haven't been sold

  -employees not working causing delays in production

  -faulty products having to be remade

  -stock that is damaged and stolen

  -holding too much stock which costs money to store
• key lean production methods:

  -kaizen

  -just in time production
• kaizen:

  -continuous improvement

  -employees are responsible for suggesting ways that the business can improve the production process
• just in time production: (JIT)

  -a stock control method where the business doesn't store any raw materials

  -regular deliveries that bring only what is needed before its existing raw materials run out, so buffer stock is not needed
• buffer stock:

  a minimum stock level a business holds at all times, to reduce the risk of running out of stock due to late deliveries
• JIT advantages:

  -reduction in inventories = more space

  -smaller/frequent deliveries means products are fresher (higher quality)

  -no large amounts of capital (money invested) in stock that can go out of date/fashion

  -less stock = less waste

  -reduces production costs, so price can be more competitive
• JIT disadvantages:

  -hard to react to unexpected changes in demand

  -unable to use economies of scale

  -poor service if products go out of stock because a misjudgement
• lean production + employees:

  -strikes can be damaging

  -kaizen needs motivated + passionate employees

  -employees need training to check waste at every stage

  -managers + employees must be able to work together well