2.4 production, productivity and efficiency

Production

Total amount of output produced in a time period

Productivity

Output per input per hour

Job production

Making one single product at a time

Batch production

Making more than one item at a time in batches

Flow production

Using production lines with continuous movements

Cell production

Dividing production into separate self-contained areas

Quality of inputs

High skilled labor or machinery improving productivity

Motivation

Higher motivation leads to increased productivity

Investment

Technological changes increasing production efficiency

The role of management

Focus on production and efficiency

Boosting productivity when markets are static

Introducing more efficient ways of working

Efficiency

Reducing wasted inputs for better productivity

Lean production

Approach to management reducing unnecessary waste

Management of staff

Organized staff leads to improved coordination

Labour intensive

Needing many employees to produce products

Capital intensive

High costs tied up in machinery

Capacity utilisation

Percentage of total capacity being achieved

Fixed costs

Rent, salaries, utilities, etc.

Stock control

Managing the flow of stock in a business

Quality

How well a product or service performs its intended function

Quality control

Checking and reviewing work for faulty output

Quality assurance

Organizing processes to get the product right the first time

Total Quality Management (TQM)

Systems of quality assurance for each worker

Quality circles

Groups of employees meeting to identify improvements

Continuous improvement (Kaizen)

Introducing small changes to improve quality and efficiency