OPERATIONS MANAGEMENT

The Nature of
Operations
Methods of production

AS LEVEL BUSINESS
Lesson
objectives:
understand the different methods of
production
evaluate its advantages and disadvantages
evaluate problems in changing methods of
production
 can you see the
picture and define
each method?
 methods of 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 they 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 which
production?
The type of market it operates in.
Mass market -> aimed at a lot of people -> flow production
Niche market -> smaller market and specialised product ->
batch or job production (for differentiation)
The skill level of employees
(e.g. Handmade products are less automated)
Business resources (finances / machinery / space)
Nature of the product
knowledge
check
KAHOOT
SUMMARY - 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.
SUMMARY - Choosing a production method
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.
Reading time! (Pair work)

Read this interesting article on 4 types of MASS CUSTOMISATION

https://www.investopedia.com/terms/m/masscustomization.asp#:%7E:text=
Mass%20customization%20is%20a%20marketing,or%20built%2Dto%2Dorder

With you pair, after reading the article, IDENTIFY ONE EXAMPLE of a product
that uses each method of mass customisation.

then share to the class your thoughts on it.

 Problems of changing
operations methods
FROM JOB -> BATCH
cost of equipment
additional capital to finance work-in-progress
inventory (These are products that are currently at
some phase of the manufacturing process.)
workers less motivated (unused craft skills)
FROM JOB/BATCH -> FLOW
cost of equipment is too high
employee training to be flexible and multiskilled (if
only one station its repetitive)
need an estimation of future demands to make the
decision
RECAP: Nature of Operations topic
this is a timed exercise! (like an exam simulation) - 45 MINUTES