5.2 - Production Methods

Job Production

The output of a customized good or service that meets the specific needs of a specific customer. This production method involves the output of unique or one-off orders. It is a flexible production method that allows customers to request and make changes to the product during the production process.

Job production advantages

• Motivation of workers as they are skilled workers who produce work that is original.

• Most flexible production method, allows output to be catered to the specific requirements of the customers

Job production disadvantages

• Long production times– due to varying and specific requirements of customers

• Labour intensive – expensive

Batch Production

A method of production that involves producing a set of identical products known as batch. Work on each batch is fully completed before production switches to another batch

Batch production advantages

• Average costs of production are lower, enables to have economies of scale from machinery producing large quantities.

• More choice for customers:

Batch production disadvantages

• Need for storage

• Storage costs can potentially be high. Companies will need to store different batches of finished

Mass Production

A production method whereby different operations are continuously and progressively carried out in sequence, with a very large output of standardized products.

Flow Production

Focuses on a continuous production process of manufacturing products that are standardized in large quantities.

Mass (flow) advantages

• Capital intensive, output is on a large scale

• Most cost-effective methods of production

• Benefits from economies of scale (lower cost per unit of output), can charge lower prices.

Mass (flow) disadvantages

• Goods sold at relatively low prices, the firm earns lower profit margins.

• Inflexibility- products can’t be adapted to customers individual needs

Mass customization

Occurs for businesses that produce large quantities of goods via batch or mass/flow production, but products can be tailored to a customer’s exact preferences.

Mass advantages

• Greater choice for customers and a higher degree of customer satisfaction

• The flexibility enables more customers to have their individual needs and preferences met

Mass disadvantages

• Mass customization relies on creating more options for customers, this can be more expensive for the business.

• It requires effective stock control which can be both time consuming and costly for the business.