Lecture Notes: Production Methods

Overview

• Aim: Understand different methods of production
• Focus on manufacturing tangible products (goods)
• Four production methods covered: Job Production, Batch Production, Mass/Flow Production, and Mass Customization
• Assessment Objective: Discuss operations or production methods

Key Concepts

• Tangible vs. Intangible Products: Goods vs. Services
• Product Perception Map (PPM): Categorizing products based on quality and price

Production Methods

1. Job Production

• Description: Manufacturing of one-off, unique items (e.g., Batmobile, wedding cakes)
• Characteristics:
  • High quality, high price (premium products)
  • Super flexible and customizable
  • Labor-intensive, relies heavily on skilled employees
  • High markups allowed due to customization and uniqueness
• Pros:
  • Motivating for employees (full process involvement)
  • Customization increases product value
• Cons:
  • High cost and long production time
  • Least efficient due to non-automation
  • High reliance on specialized labor

2. Batch Production

• Description: Manufacturing of groups or batches of identical products
• Examples: Bakery, Pharmaceuticals, Breweries
• Characteristics:
  • More efficient than job production
  • Customizable in batches
  • Uses economies of scale
• Pros:
  • Efficient, cost per unit decreases with output
  • Capital intensive, more machine reliance
• Cons:
  • Higher stock levels required for raw materials
  • Higher maintenance costs

3. Mass/Flow Production

• Description: Large-scale manufacturing of identical products
• Examples: Coca-Cola, mass-market cars, FMCGs
• Characteristics:
  • Mass production emphasizes quantity, flow production emphasizes continuous operation
  • Highly automated, low average costs
• Pros:
  • Most efficient, large economies of scale
  • Low need for skilled labor
• Cons:
  • Least customizable, requires stopping production line for changes
  • High setup cost, requires large scale demand
• Historical Note: Henry Ford’s assembly line revolutionized mass production

4. Mass Customization

• Description: Mass production with the ability to customize products
• Examples: Volkswagen, Mini
• Characteristics:
  • Combines benefits of mass production with customization
  • Flexible production processes
• Pros:
  • Allows for high volume and customization
• Cons:
  • Highly reliant on design and technology
  • Expensive and time-consuming setup

Comparative Analysis

• Labor vs. Capital Intensive:
  • Job Production: Labor Intensive
  • Mass Production: Capital Intensive
  • Batch Production: Intermediate
• Efficiency:
  • Mass Production: Most efficient
• Cost Per Unit and Production Time:
  • Lowest in Mass Production
• Setup Costs:
  • Highest in Mass Production

Conclusion

• Review the full class material on the instructor's online textbook for detailed diagrams and additional insights.