Production

Operations Management

Operations Management

Goal of most firms involve the production of goods or services.

Need to purchase resources, convert then into outputs and distribute them to end users.

Embraces all activities required to create a deliver a firms good or service

Production

Process by which inputs are transformed into outputs in the form of a useful product or service.

Size and Nature of Firms

Size of business often determines manufacturing

Larger the business, more finance they can invest in capital and mass production

Smaller firms understand individual needs better

Mass Customisation

Makes use of flexible computer aided manufacturing technology

Combines benefit of low cost mass production with customisation of products - competitive advantage

Impact of Labour

Skill set of a firms labour force is a key consideration in methods of production

Highly skilled staff employed for small scale, bespoke items.

Expensive to empty and develop through training.

Job Production

Manufacture or delivery of one off or small number of items

Customers specify exact requirements and it is normally a labour intensive method.

Associated with small scale businesses, uses skilled employees.

Artists, sculptors, tailors

Job Production Evaluation

• Exact requirements of customer

• Flexibility

• High employee motivation

• High Quality and Premium Price

• Time Consuming

• Expensive

• No EOS

• Low production

Batch Production

Small quantities of identical products

Semi skilled staff, reliant upon capital equipment

Clothes, adhesives, bakers

Production is quick as all items in batch are the same, reduces cost of labour and less expensive for customer.

BP Evaluation

• Low labour costs

• Faster production

• Some EOS

• Low motivation

• Increased storage needed

• Expensive to maintain equipment

Flow (Mass Production)

Continuous process where products flow freely from one stage to the next.

Enables large volume of identical products to be manufactured.

Use of tech speeds up process, shorter lead times

Cars, Chocolates, Soft Drinks

FP Evaluation

• Fast

• Large EOS

• Consistent Quality

• Higher volumes of production

• Initial costs

• Job Losses

• Low Motivation