PRODUCTION SYSTEM

Meaning
 Production system is the framework within which the production
activities of an enterprise take place.
 An appropriate designing of production system ensures the coordination
of various production operations.
 There is no single pattern of production system which is universally
applicable to all types of production system varies from one enterprise
to another.
 Selection of manufacturing process is also a strategic decision as changes
in the same are costly.
 Therefore the manufacturing process is selected at the stage of
planning a business venture.
 It should meet the two basic objectives i.e. to meet the specification of
the final product and to be cost effective.

Definition
Production system may be defined as “the means by which we transform
resource inputs to create useful goods and services as outputs.

Types of production system

There are two main types of production system:-

1) Flow or continuous system: - it refers to the manufacturing of

large quantities of a single or at most a very few varieties of products
with a standard of processes and sequences. The mass production is
carried continuously for stock in anticipation of demand.

Characteristics:-
 The volume of output is generally large and goods are
produced in anticipation demand.
  The product design and the operations sequence are
standardised.
 Special purpose automatic machines are used to perform
standardized operations.
 Fixed path materials handling equipment is used due to the
predetermined sequence of operations.
 Product layout designed according to a separate line for each
product is considered.

Advantages:-
 Accuracy of the product design. Product quality is superior.
 Direct labour cost is reduced.
 Work-in-progress is at the lowest cost.
 Limited material handling.
 Weakness in materials or methods is quickly highlighted.
 Transformation of investment in materials into income is
relatively rapid.
 Delay in the production process is automatically detected.
 Control over costs, materials and output is simplified.
 Overhead cost per unit is reduced considerably.

Limitations:-
 It is a rigid method of production.
 It is always necessary to avoid inventory of work in progress.

Types of continuous or flow production:-

a) Mass production: -
 Mass production refers to the manufacturing of
standardized parts or components on a large scale.
 Mass production system offers economies of scale as
the volume of output is large.
 Quality of products tends to be uniform and high due to
standardize and mechanization.
  In a properly designed and equipped process, individual
expertise plays less prominent role.
 E.g. automobile assembly, t.v. assembly and so on.

b) Process production: -
 Production is carried on continuously through a uniform
and standardizes sequence of operations.
 Highly sophisticated and automatic machines are used.
 Process production is employed in bulk processing of
certain materials.
 They are not labour intensive and the worker is just an
operator to monitor the system and take corrective
steps if called for.
 E.g. crude petroleum is processed into petroleum,
kerosene, diesel oil and gasoline.

c) Assembly lines: -
 In an assembly line, each machine must directly receive
materials from the previous machine and pass it directly
to the next machine.
 It is convenient when a limited variety of similar
products is to be manufactured on a mass scale or in
large batches on a continuous basis.

2) Intermittent production system: -

 Intermittent situations are those where the facilities must be
flexible enough to handle a variety of products and sizes or
where the basic nature of the activity imposes change of
important characteristics.
 The goods are manufactured specially to fulfill orders made by
customers rather than for stock. Here, the flow of material is
intermittent. Under intermittent production system, the basic
product design changes from time to time.
Characteristics:-
a) The flow of production is intermittent, not continuous.
b) The volume of production is generally small.
c) A wide variety of products are produced.
d) General purpose, machines and equipments are used so as to
adaptable to a wide variety of operations.
e) No single sequence of operations is used and periodical
adjustments are made to suit different jobs or batches.
f) To suit different jobs or batches.

Types of intermittent production:-

a) Job production: -
 It involves the manufacturing of single complete unit
with the use of a group or operator as per the
customer’s this is a “special order” type of production.
 Each job production or product is different from the
other and no repetition is involved.
 The product is usually costly and non-standardized.
 Customers do not make demand for exactly the same
product on a continuous basis and therefore production
become intermittent.
 Each product is a class by itself and constitutes a
separate job for production process.
 E.g. Bridge building, dam construction and ship building
are common examples of job order production
industries.

b) Batch production: -
 It is defined as,” the manufacture of a product in small or
large batches or lots at intervals by a series of
operations, each operation being carried out on the
 whole batch before any subsequent operation is
performed”
 The batch production is mixture of mass production and
job production.
 Under job production machines turn out different
products at intervals, each product being produced for
comparatively short time using mass production system.
 E.g. Manufacturing of switch gears, heavy motor vehicle
and electric motor

Factors affecting the choice of manufacturing/ production system

Following factors need to be considered before making a choice of

manufacturing process is:-

1) Effect of volume/variety: This is one of the major considerations in

selection of manufacturing process. When the volume is low and variety
is high, intermittent process is most suitable and with increase in volume
and reduction in variety continuous process become suitable. The
following figure indicates the choice of process as a function of
repetitiveness. Degree of repetitiveness is determined by dividing
volume of goods by variety.

2) Capacity of the plant: Projected sales volume is the key factor to make
a choice between batch and line process. In case of line process, fixed
costs are substantially higher than variable costs. The reverse is true for
batch process thus at low volume it would be cheaper to install and
maintain a batch process and line process becomes economical at higher
volumes.

3) Lead time: - The continuous process normally yields faster deliveries as

compared to batch process. Therefore lead-time and level of
competition certainly influence the choice of production process.

4) Flexibility and Efficiency: - The manufacturing process needs to be

flexible enough to adapt contemplated changes and volume of
production should be large enough to lower costs.
Continuous v/s intermittent production:-
Continuous production Intermittent production

1 product: same product is The product design

produced continuously. changes as per batch/job.
Same product is not
produced continuously
2 production process: lacks flexibility Production process is
flexible.
3 nature of production: large scale production of Small scale production of
standardized products wide scaled goods
4 capital investment: it is substantial It is limited/low
5 standardization: product and process are Product and process are
standardized not standardized
6 storage requirement: only at limited locations Storage is required at
each operation.
7 use of equipments: regularly Equipments are used for
limited time
8 production cost : : per unit cost is low Per unit production cost is
high