Types of operations
Entrepreneurs need to decide which production method is best for them. Good customer service is valuable and can lead to increased sales.
Production is about creating goods and services. Managers have to decide on the most efficient way of organising production for their particular product.
There are three main types of production to choose from:
This is where items are made individually and each item is finished before the next one is started. Designer dresses are made using the job production method. Job production’s main advantages are that it is a highly specialised or customised goods which means a premium price can be charged. Therefore it is expensive for the customers as highly skilled employees do not come cheap! The time for an order to be completed can take a long time. A famous example in Scotland of job production is Linn Products in Waterfoot, East Renfrewshire. Many of their luxury sound systems are built by just one highly trained and skilled employee.
This is where groups of items are made together. Each batch is finished before starting the next block of goods. For example, a baker first produces a batch of 50 white loaves. Only after they are completed will he or she start baking 50 loaves of brown bread. Batch production’s main advantages are that there is less demand for highly skilled workers and equipment can be standardised to a certain extent, which lowers costs. However repetition on the job can de-motivate employees and a high volume of stock may be held, tying up valuable cash.
This is where identical, standardised items are produced on an assembly line. Most cars are mass-produced in large factories using conveyor belts and expensive machinery such as robot arms. Workers have specialised jobs, for instance, fitting wheels. Flow production’s main advantages are that in assembly lines vast orders can be met and large quantities produced. Standardisation of machinery can keep costs low and automated machinery can operate without breaks 24/7.
Its major disadvantages are that a large initial capital outlay is required and employees are unskilled and highly de-motivated. Customisation is difficult to meet and would increase costs. Reebok are a famous example for taking standardisation to extremes by setting up factories to make just the left shoe of a trainer, and another factory in another country making the right trainer.
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