Production Methods Lecture Notes

Class Overview

• Objective: Understand different methods of production.
• Assessment Objective: Discuss operations or production methods.
• Methods Covered: Job Production, Batch Production, Mass/Flow Production, Mass Customization.
• Focus is on manufacturing of tangible goods (not services).

Key Terms

• Tangible Products: Goods that can be produced and manufactured.
• Intangible Products: Services that cannot be produced in a manufacturing setup.

Production Methods

Job Production

• Definition: Manufacturing of unique, one-off items.
• Examples: Batmobile, Wedding Cake, Spaceship.
• Product Perception Map: Likely to be premium products (high quality, high price).
• Pros:
  • Highly customizable.
  • Flexible, allows customization to customer's needs.
  • Higher prices/markups due to special nature.
  • Motivating for employees, as they're involved in the entire process.
• Cons:
  • High cost for customers.
  • Long production times.
  • Least efficient, labor-intensive.
  • High reliance on skilled labor.

Batch Production

• Definition: Manufacturing groups or batches of identical products.
• Examples: Bakery goods, Pharmaceutical products, Brewery products.
• Product Perception Map: Likely economy, bargain, or cowboy products.
• Pros:
  • Customizable for entire batches.
  • More efficient than job production, allows economies of scale.
• Cons:
  • Higher stock levels needed.
  • More capital-intensive than job production.
  • Maintenance costs for machinery.

Mass/Flow Production

• Definition: Large-scale manufacturing of identical products, often non-stop.
• Examples: Coke, Mass Market Cars, FMCGs (toilet paper, toothbrush).
• Product Perception Map: Likely bargain or economy products.
• Pros:
  • Most efficient method.
  • Low average costs, fast production times.
  • Highly automated.
  • Economies of scale.
• Cons:
  • Least customizable.
  • Only viable for high demand, large-scale production.
  • High setup costs, significant investment.
  • Less motivating for employees.

Mass Customization

• Definition: Mass production with flexibility for customization.
• Examples: Volkswagen group car components, Mini brand car customization.
• Pros:
  • Combines mass production efficiency with customization.
  • Highly flexible, meets individual customer preferences.
• Cons:
  • Even more dependent on technology and design.
  • High setup costs, time-consuming.

Comparison of Production Methods

• Labor vs. Capital Intensive:
  • Job Production: Labor intensive.
  • Mass Production: Capital intensive.
  • Batch Production: Intermediate.
• Efficiency, Cost Per Unit, Production Time, Setup Costs:
  • Job Production: Least efficient, higher costs.
  • Mass Production: Most efficient, lower costs.
  • Batch Production: Intermediate.

Additional Notes

• Henry Ford: Developer of the assembly line method, revolutionized mass production.
• Encouragement to review supplementary materials (e.g., product perception maps, economies of scale).

Action Items:

• Review class 4.2 for Product Perception Map (PPM).
• Review class 4.5 for more on markups.
• Review unit 1.5 for economies of scale.
• Consider learning more about Henry Ford's impact on production.