2.4.1 production, productivity & efficiency

production

the total number of units produced in a given period of time

job production

• manufacturing one product at a time, often customised, requiring skilled labour

• adv: highly customised products, high quality, skilled workers

• disadv: skilled labour and craftsmen are expensive, time consuming

batch production

• producing a set quantity of identical products before switching to another type

• adv: efficient use of machines, lower costs than job production, economies of scale achieved

• disadv: idle time between batches needs to be managed as this is wastage

flow production

• continuous production of identical, standardised products on an assembly line

• adv: low unit costs, mass production, consistent quality, fast output

• disadv: very inflexible, hard to change the factory machine to make different products, the production process will be set up to make just one item

cell production

• a group of workers or machines work together on a product at different stages to improve efficiency

• adv: increased teamwork, quality and motivation

• disadv: needs more staff than flow as it goes to different areas to be produced in stages

productivity

• how a business can measure how hard a person or machine is working

• labour productivity = total output/number of employees

efficiency

• involves maximising the output achieved from given inputs including machinery, materials and people

• efficiency = total cost/output

  • total cost = fixed cost + variable cost

capital intensive

• uses a high proportion of capital such as machinery during production

• adv: increased productivity, improved quality &. speed, reduced labour cost, economies of scale

• disadv: high investment outlay, lack of human initiative, greater resistance to change

labour intensive

• uses a high proportion of labour

• adv: cheap, workforce easily adapts to change, government funding available to protect jobs

• disadv: lack of skilled workers, HRM costs can be high