- Job production
- Creating a product from start to finish that is tailor made to meet customer requirements – usually one-off or unique items (e.g. violin, painting)
- Only one person or group’s job to complete entire product
- Small firms are likely to use job production
- Advantages
- High quality and uniqueness
- High motivation of workers
- More flexibility
- Disadvantages
- Labor intensive and expensive
- Time consuming due to customer requirements
- Long working-capital cycle (due to slow production)
- Minimal economies of scale
- Batch production
- Producing limited number of identical products (batch) at a time (e.g. chocolates, CPUs, breeding)
- Usually used when level of demand is not clear and the business produces a range of products
- Advantages
- Technical and purchasing economies of scale
- Specialisation – better quality and productivity
- Variety – reduce risks of producing single product
- Limitations
- Inflexibility – can’t stop once started
- Storage costs
- Boredom – reduced motivation
- Flow/line/mass production
- Continuous production process of standardized products
- Flow/line/mass are usually interchangeable
- Generally capital intensive
- Flow production
- Sequence of steps to create product (e.g. newspapers/magazine)
- Line production
- Product is assembled in various stages along an assembly line (e.g. car)
- Mass production
- Manufacturing large amounts of standardised products (e.g. Chips)
- Advantages:
- High production scale at low cost due to economies of scale
- Initial high costs is spread over high volume of units
- Standardized quality (assuming low defect rate)
- Low cost for workers
- Disadvantages:
- Low motivation
- Breakdowns cause major delays
- Inflexible – no reworking or customization
- High initial set-up, running, and replacement costs
- Requires effective storage
- Cell production
- Modern adaptation of assembly line
- Parts of production are delegated to teams or cells for completion
- Any member of team can contribute to the task
- Cells work independently but rely on each other to achieve targets
- Advantages
- Certain degree of autonomy in decision making
- Improved standards of quality
- Greater sense of responsibility and accountability in team
- Higher levels of motivation (team working, empowerment, etc.)
- Specialization
- Disadvantages
- Output may be lower
- Higher chances for intra- and intergroup tension and conflict
- Capital intensive to initiate and sustain
- Labour and capital intensity
- Labour intensive
- Greater proportion of labour cost than capital cost
- Job production and service sector is often labour intensive
- Offers personalised service but may have more HR issues
- Capital intensive
- High proportion of capital costs compared to labor cost
- Leads to increased levels of output and productivity
- Needs sufficient demand to justify capital investment
- Homogenous products; may have no USP
- Standardisation means low profit margins and high fixed costs
- Choice depends on:
- Relative cost and substitution
- Market size
- Aims and objectives of the organization
- Combining methods of production
- Businesses usually combine the different methods of production
- e.g. Burger King: uses batch production (making burgers in batches) and job production (customizable burgers for customers)
- Possibility of customization, flexibility, and lower costs