Business Studies

Production methods

Entrepreneurs need to decide which production method is best for them. Good customer service is valuable and can lead to increased sales.

Job, batch and flow production

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:

Packaged soft drink

Flow production is used in soft drink production

  • Job production 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.
  • Batch production 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.
  • Flow production 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.

Choosing a production method

The best method of production depends on the type of product being made and the size of the market. Small firms operating in the service sector, such as plumbers, use job production because each customer has individual needs. Niche manufacturers of items such as made-to-measure suits would also use job production because each item they make is different.

Batch production is used to meet group orders. For example, a set of machines could be set up to make 500 size 12 dresses and then adjusted to make 600 size 12 dresses. Two batches have been made.

Expensive jewellery laid out in a jeweller's window

Job production is used to make expensive pieces of designer jewellery

Flow production is used to mass produce everyday standardised (all the same) items such as soap powder and canned drinks. Economies of scale lead to lower unit costs and prices. Not many small manufacturers can afford the investment needed to mass produce goods. They instead opt for either batch or job production.

There is usually a trade off between unit costs and meeting specific customer needs. Flow production offers economies of scale and low costs for a one-size-fits-all product.

Customer service

Customer service is the experience a customer gets when using products made by the business. Satisfied customers make repeat purchases and recommend the product to friends, leading to additional word-of-mouth sales.

Customers want to buy goods and services that meet their needs at a price they can afford. For example a café thrives when friendly staff serve tasty, well made meals, in generous portions, at competitive prices.

How to improve customer service

A still from the 1970s sitcom 'Fawlty Towers'. Hotel owner Basil Fawlty examines trays of food being carried by waiter Manuel.

Good customer service is especially important in businesses dealing directly with the public, such as hotels

Successful businesses define the quality or standard of service needed to meet customer needs. For instance, a café can aim to take no more than 5 minutes to serve any customer once they have ordered their meal.

Ensuring that quality standards are met requires:

  • Training so that staff understand their role and responsibilities. For instance, asking every customer if they are happy with their meal.
  • Innovation or introducing new ideas and methods. For example, altering the menu every three months keeps customers interested and helps a café to stay one step ahead of the competition.
  • Listening to customers helps a business adjust its products to better match consumer needs and respond to any problems.

Price versus customer service

Customers compare price with customer service. Few customers expect high quality service when buying low priced items. For instance, travellers using a budget airline accept that they must pay for extras such as an in-flight meal. First class customers expect luxury seats and free champagne. The challenge facing all businesses is to remain competitive. They must keep prices competitive while offering a better service than rivals.

Back to Revision Bite