Operations methods

Operations Methods

refers to the ways a business organizes and carries out the manufacturing of goods or the provision of services. There are four main methods of production

Operations Methods (4)

• job production

• batch production

• mass production

• mass customization

Job production (3)

• This production method involves the output of one-off orders that meets the specific needs of customers. It is a flexible production method that allows customers to request and make changes to the product during the production process.

• It’s labor intensive.

ADVs of job production (2)

• It is the most flexible production method, allowing output to be catered to the specific requirements of the customer.

• Due to its uniqueness and exclusivity, a premium price can be charged This means the profit margin will be higher.

DIS of job production

• High labour costs (due to the need to hire highly skilled and experienced employees) and limited opportunities for economies of scale mean that job production can be very expensive.

• Long production times as job production cannot rely on technologies used for mass produced

Batch production (3)

• a method of production that involves producing a set of identical products, with each batch being fully completed before production switches to another batch.

• Batch production is used where the level of demand is frequent and steady.

• It relies on the use of capital intensive output.

ADVs of batch production (3)

• Average costs of production are lower than if job production is used, because batch production enables the organization to have greater economies of scale.

• variety of products are made —> customers have a greater choice.

• It reduces the risks associated with concentrating on the output of a single product.

DIS of batch production (3)

• less flexibility for customers, as they can only select from a range of standardized output.

• greater need for capital expenditure, such as the purchase of machinery.

•  reliance on machinery and automation for batch production means that technical problems or breakdowns would be costly to the organization.

Mass Production

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

• It relies on using an automated production process,

• It is highly capital intensive.

Standardization

products are mass manufactured to an identical standard, with all output being homogeneous.

ADVs of mass production (3)

• As products are mass produced, the business benefits from economies of scale This means it can charge lower prices and/or enjoy higher profit margins. Therefore, customers can benefit from better value for money.

• Automation results in lower labour costs as fewer people need to be hired

• the business benefits from a faster rate of production.

DIS of mass production (3) 

• almost no flexibility with mass production because large quantities of standardized (identical) goods are produced.

• Flow/continuous production requires effective stock management systems. Inventory and storage costs can be very expensive for a business.

• Start-up costs are likely to be high, especially for new businesses because of the amount of capital expenditure needed

Mass customization

• an operations method that combines the benefits of mass production with the personalization of job production or customized production

• Mass customization involves large-scale mass production of goods but with the flexibility to adapt the output to the varying needs of different customers.

ADVs of mass customization

• offers greater choice for customers and a higher degree of customer satisfaction, hence can create competitive advantages/

• It enables the business to enjoy higher profit margins due to the premium prices charged for mass customized products.

• Mass customization involves elements of job rotation, which can be motivational —> non-financial reward

DIS of mass customization

• Mass customization relies on creating more options to entice customers, but such investments can be expensive.

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

• It can be challenging to forecast sales and trends due to the wide range of options made available to customers