operations Flashcards
labour intensive production
labour intensive production is when products are mainly produced by human workers. machines and special tools may be used too, but overall it requires human creativity and effort to produce the product.
labour intensive production
advantages
- customised products are easier to make.
- humans can use their own initiative and problem solve.
- products are unique. made to suit customers’ requirements.
labour intensive production
disadvantages
- quality of products can vary due to expertise of the worker.
- skilled workers take time to train.
- skilled workers will be paid more than unskilled workers.
capital intensive production
capital intensive production is when products are mainly produced by machines and robots. Examples, car factory, potato crisp manufacture.
capital intensive production
advantages
- 24/7 operation possible/no need for breaks.
- products can be mass produced.
- reduces labour costs since fewer workers are required.
- reduced need for supervision by managers.
capital intensive production
disadvantages
- can involve large set-up costs to invest in plant, machinery and equipment.
- breakdowns in production can be catastrophic to cash flow and profits.
- money is required for improving/maintaining technology.
job production
Job production involves producing custom work such as a one-off product for a specific customer. It usually involves a highly skilled individual, a group of workers, working on one task at a time
job production
advantages
- high quality products due to small-scale and focused production
- personalised products can result in more revenues and greater customer satisfaction
- higher job satisfaction due to employees’ strong commitment to the product
job production
disadvantages
- manufacturers usually pay higher wage costs for skilled workers
- job production can take up a lot of time and resources
- specialised machines may be needed for complex items adding to the cost
batch production
batch production is a method of manufacturing where identical or similar items are produced together for different sized production runs.
batch production
advantages
- compared with mass/flow production, goods can be produced in smaller quantities, making the manufacturer’s overall process more agile and efficient.
- varying products means the manufacturer is reducing its risk rather than concentrating on a single item that might go out of demand.
- producing a variety of products gives customers a wider choice and therefore increases the possibility of sales.
batch production
disadvantages
- When there is a ‘pause’ for reset or other adjustments between stages of production, as well as quality control checks and testing, there may be employee downtime.
- batch production can be more expensive because there are usually more stages to the manufacturing process.
- when goods are being produced in a series of steps, production can take longer. production cannot move onto the next stage until every item in the batch is ready so there can be delays and down time in production. This is especially true if alterations to machinery need to be made before production can continue.
flow production
flow production is used for producing a large number of identical products (mass production). flow production is adopted for mass-market products
flow production
advantages
- flow (or mass) production lowers the cost-per-unit as the business can access economies of scale. this results in lower unit costs and higher profit margins.
- as items move along a continuous flow of automated machines the product can be delivered more quickly, which improves customer satisfaction.
flow production
disadvantages
- set-up costs are high since they involve buying and installing specialised machines and creating new production programmes.
- machines in flow production are expensive to buy and set up and they perform only one function.
- if one station breaks down, the whole assembly line will stop as well.
outsourcing
outsourcing involves getting another business or organisation to provide a process or service rather than doing it themselves.
outsourcing
benefits
- fewer employees required so may lead to cost savings.
- outsourcing does not tie up the organisation’s time and resources in activities that could be done externally.
- allows the organisation to focus on core activities - therefore the core service can be improved.
outsourcing
drawbacks
- loss of control over the organisation’s activities may result in quality issues.
loss of control over the organisation’s activities may result in confidentiality issues. - possibly locked into expensive contracts putting pressure on budgets and cash flow.
