Production Methods

Production
How goods and services are produced.
 Types of Production
Job Production
Batch Production
Flow Production, Line Production,
or Mass Production
 Job Production

Producing a one-off item specifically

designed for the customer.
– Can be small or large – but usually unique
– Examples: Wedding cakes, draperies, Yangtze
dam in China
Pros: motivating for workers as they
participate in the complete production
process
Cons: high unit costs per item
https://www.youtube.com/watch?v=OiGc2KmLHn0
 Batch Production
Products are made in separate groups with each
group going through the complete process
together
– Examples: a baker making rolls, cheerleading
uniforms
Pros: enables economy of scale if batches are large
enough, batches can be matched to demand, batch design
can be changed
Cons: high level of “work-in-progress” for
each stage of production, the work may be
boring and demotivating for workers, if
batches are small unit costs may be high,
cleaning may need to be completed
between batches
https://www.youtube.com/watch?v=qEopbpzas_o
Flow Production or Line Production
(Mass Production)
Used when individual products move through one stage
of production to next when the product is ready.
– Examples: soda, pencils
Pros: capable of producing large quantities in short time frames,
and standardized items, labor costs are low because automated
equipment is used, inputs can be easily determined because of
constant known output, quality is consistent and easily checked at
multiple stages of production
Cons: high setup costs, boring repetitive tasks, demotivating for
employees

Video: https://www.youtube.com/watch?v=jLud5XYfY_c
 Summary
Job Batch
Main Feature Single one-off items Group of identical products
pass through each stage
together
Essential Highly skilled workforce Labor and machines must
be flexible to switch to
Requirements making batches of other
designs
Main Advantages Able to undertake specialist Some economies of scale
projects or jobs, often with high Faster production with
value added lower unit costs than job
High levels of worker motivation production
Some flexibility in design of
product in each batch
Main High unit production costs High levels of stocks at
Time consuming each production stage
Limitations Unit costs likely to be
Wide range of tools and
equipment needed higher than with flow
production
Flow/Line/Mass
Mass production of standardized
products
Specialized, often expensive, capital
equipment – but can be very efficient
High steady demand for
standardized product
Low unit costs due to constant
working of machines, high labor
productivity and economies of scale
JIT stock management easier to
apply than with other methods
Inflexible – often very difficult and
time consuming to switch from one
type of product to another
Expensive to set up flow-line
machinery and each section needs to
be carefully synchronized
Switching from Job to BATCH
Considerations when changing from job
production methods to batch.
– Finance
Cost of equipment to handle larger volume of the batch
Higher stocking levels require more finance
– Human Resources
Less emphasis in an individual’s craft could demotivate
employees
– Marketing
Product is no longer custom
May have to promote lower prices and consistency in quality
 Switching from Job or Batch to
FLOW
Considerations when changing from job or batch
production methods to flow.
– Finance
Cost of equipment to handle a large volume of production
Production delays during change over could create cash flow
problems
– Human Resources
Low motivation and boredom could occur
– Marketing
Market research becomes important to target larger markets
Accurate sales forecasting to match demand with output
Promotion and pricing will have to change to be geared
toward a mass market approach….this could change the
direction of the business.
Choose a Production Method
Size of Market
– Very small markets are suited for job or batch
production
– Flow production is useful for producing a large
quantity of identical products for very large
markets with consistent demand.
– Batch production is suited for large production
runs at intervals of time….3X per year
Choose a Production Method
Amount of Capital Available
– Large amounts of capital are required for flow
production systems
– Small amounts of capital can be used to set
up job or batch production methods
Choose a Production Method
Available Resources
– Flow production requires large amounts of
unskilled workers
– Flow production requires land for large
factories
– Job and batch production requires a skilled
work force
 More than One Way
Most businesses use more than one way
of producing their products.

Land Rover
– Line production of the standard products
– Batch production of their military version
– Job production for special orders that will be
hand assembled (bullet proof glass, gold
plated trim, Italian leather seats)