Productivity and investment Flashcards
(32 cards)
What does the term production mean
This is the quantity of output, productivity is a measure of efficiency calculated by dividing output by the inputs per time period
for example, labour productivity at Nissan UK; 100 cars per worker per year
what are the three main types of production
Job production
Batch Production
Flow production
what are the other two types of production
cell and lean production
What is job production
This is producing a single one-off product for a customer. for example, a bespoke product- King charles gets his shoes hand-made at John Lobb bootmaker. it often requires higher levels of labour due to attention to detail
What is batch production
This is where a set number of identical items are produced. For example; 500 pairs of size 11 boots. It is a large collection of the same goods. Producers may invest in machinery to speed up production instead of job production where some things may be hand stitched. It usually involves a division of labour to divide the tasks between different employees who can specialise in each area to make this production more effectient allowing for prices to be less than job production.
What is flow production.
This is the continuous production of a single item such as cans of beans. It’s a process of passing partly produced products from one stage to another stage of production with each stage adding value. Usually an automated production line can be set up to produce millions of items at a time with little human labour. This allows these products to be set at a really low price compared to other production methods.
What is cell production
This is a small production line or a group working process so items can be produced flexibly for example; Brompton bikes which has the flexibility to produce every bike to order. Group working allows them to produce a higher productivity and higher output levels. It allows a degree of uniqueness and value for a customer.
What is lean production
This method of production attempts to eliminate waste while mainting quality and removing activities that dont add value to the production process eg stock holdings. it aims to reduce business costs by making it more efficient and responsive usually found in tech manufacturing eg; removing unused raw materials, using all skills of workers and stock holdings
what is time based management
this is an approach that recongises the importance of time and seeks to reduce levels of unproductiveness leading to faster response times, product development and reductions in waste
what is just in time production
JTI tries to ensure that parts and raw materials are received and products are made only when there is a demand for the parts and demand for the product
What are the benefits of job-production
- It can meet customer needs exactly allowing for better reviews
- the quality of work is usually high due to skills and only one item being produced so work is concentrated on one single unit
- its easier to motivate workers involved in the production process as they will see the product from start to finish can relate to niche market
- theres flexibility in production to whatever is required so less boring
- little stock is tied up causing little waste
- its easier to add value due to highly specialist work.
(higher pay according to Taylor is employees highest motivation.)
What are the limitations to job production
- Due to buying smaller quantities causes higher unit casue as they cant benefit from economies of scale
- labour is more liekly to be skilled so its harder to find employees and more expensive to employ and train
- its a slower process
- Its difficult to gauge the cost for the job as its not been done before.
what are the benefits of batch production
- The system is able to produce in larger quantities than job production As greater quantities are produced the unit cost should be lower
- There may be some economies of scale depending on batch size
- Its usually faster than job production due to division of labour and larger number of products
- There is more flexibility than flow production to meet the needs of customers
What are the limitations of batch production
- There may be a time delay between producing batches (downtime)
- When batches are produced by machines if part of a machine is broken it can take hours to fix causing lower output than flow
- More stock has to be held adding to cash outflows
- There is less skill required so employees may not be motivated causing absences and lack of stimulation.
- if one batch is wrong it will all be waster.
What is the benefits of flow production
- The business can benefit from economies of scale reducing unit cost
- The business can benefit from division of labour reducing costs
- the business can produce a product in large numbers and quicker than other methods
- unlike batch the process is continuous with little downtime allowing production levels to be maximised
- it enables a business to remain competitive due to low unit costs and large scale production to enable demand to be med
- more opportunities for division of labour (specialism) enhancing motivation and productivity.
What are the limitations of flow production
- High set up costs due to automated system
- Long time to organise the flor system to ensure all parts are completed in the correct order
- it lacks flexibility to produce a range of products as they would need more machines costing more
- If one line stops the whole production is stopped unlike batch where another stage could begin
- A fall in demand can cost a lot of money due to running the machines eg 2008 recession
- due to repetition motivation could be low
- any change in a product can result in downtime as the machine would need to be changed
What are the benefits of cell production
- There are improved working conditions as the employees operate in teams improving motivation
- As theyre responsible for their own work there will be less waste as they will want to perform well
- It encourages responsibility and pride (Hezbegs theory)
- Opportunity for job rotation (Hezbergs theory)
- Allows employees to set pace of own work allowing efficient work to be completed
What is the division of labour
This is when a task is broken down into separate tasks making it easier to perform therefore, cheaper and quicker.
How does the division of labour impact stakeholders
- Shareholders may benefit from increased efficiency leading to an increase in profit and dividends
- Suppliers may benfit from supplying more components to the business
- employees may be demotivated due to repetitive work
- customers can buy products at a reduced cost due to increased efficiency and productivity
Why may a business change method of production
- Nature of product
- cost of machinery
- financial situation
- specific needs of customers
- Competition
- Business objectives
- availability of technology.
What is investment
The commitment of resources to a project in order to secure a more profitable outcome
what is research and development
Activities in business processes aimed at creating new products for the benefit of the customer
what is innovation
A business process that brings something new that isnt currently available
Why might a business undertake R&D, innovation and investment
- Ensure the use of modern equipment to keep up with competitors and improve efficiency
- Increase capacity and benefit from economies of scale while increasing profitability through reduction of labour costs
- Ensure that the product range is relevant and meets the cost of customers
- Ensure that the product is produced in the most efficient way possible
- Lead to technological innovation
- Secure the future of business through competitive advantage.
