Operation Management: Production Methods
- 1. BUSINES S&MANA GEMENTby: Shadi A. Razak 1 Production Methods
- 2. Objectives • Explain the concept of production in business • Differentiate between the different outputs of the production process • Differentiate between the features and applications of the different production methods • Explain and analyse the nature and value of cost and profit centres in business by: Shadi A. Razak 2
- 3. Structure • Introduction • Production Methods • Job Production • Batch Production • Mass/Flow/Line Production • Cell Production by: Shadi A. Razak 3
- 4. Production by: Shadi A. Razak 4 INTRODUCTION
- 5. Production • is the functional area of the business, responsible for turning inputs into finished outputs through a series of processes. by: Shadi A. Razak 5 INTRODUCTION
- 6. Production • Incorporates many tasks that are interdependent. • They can be classified to: – Production Planning (Methods, Purchase and Store) – Design and Technical Support – Works by: Shadi A. Razak 6 INTRODUCTION
- 7. Product by: Shadi A. Razak 7 INTRODUCTION
- 8. Product • Good by: Shadi A. Razak 8 INTRODUCTION
- 9. Product • Service by: Shadi A. Razak 9 INTRODUCTION
- 10. Product by: Shadi A. Razak 10 INTRODUCTION Physical products MP3 Players. Physical content with some service Cosmetic surgery; gets the new nose/breast/look, but there is extensive treatment before and after. Service content with some physical product Airline travel; customer travels from A to B but they have meals, watch movies and get free drinks. Service product Music Concert; assuming that consumers don’t buy the t-shirt or the CD or even the sponsor soft drink. They only pay for the pleasure of the music.
- 11. Production methods guide • There is always factors that affect the selection of a production method: – Nature of the product – Cost – Scale of production by: Shadi A. Razak 11 INTRODUCTION PRODUCTION METHODS
- 12. Production methods • There is a number of production methods: – Job production – Mass production – Batch production – Cell production by: Shadi A. Razak 12 INTRODUCTION PRODUCTION METHODS
- 13. Job production • The production of a special “one-off” product that is made to a specific order • Associated with the top end of the market • Emphasis on quality • Usually have longer development phase of the product life cycle by: Shadi A. Razak 13 INTRODUCTION PRODUCTION METHODS JOB
- 14. Job production by: Shadi A. Razak 14 INTRODUCTION PRODUCTION METHODS JOB
- 15. Job production • Advantages: – Mark-up is likely to be high – Clients get what they want – Special relationship can be developed with role models and trend setters – Motivate skilled workers by: Shadi A. Razak 15 INTRODUCTION PRODUCTION METHODS JOB
- 16. Job production • Disadvantages: – Time consuming – Production cost is high – Very labour intensive – Require skilled labour – Product fail will impact the business brand and image by: Shadi A. Razak 16 INTRODUCTION PRODUCTION METHODS JOB
- 17. Batch production • Groups of identical products made to order • Emphasises on quality and affordability • Targets the middle of the market • Offer customisation via range of standardised options • Require careful planning by: Shadi A. Razak 17 INTRODUCTION PRODUCTION METHODS JOB BATCH
- 18. Batch production by: Shadi A. Razak 18 INTRODUCTION PRODUCTION METHODS JOB BATCH
- 19. Batch production • Advantages: – Helps achieving Economies of scale – Allows customers more choice – Captures more market share – Useful for trialling products – Can deal with unexpected orders by: Shadi A. Razak 19 INTRODUCTION PRODUCTION METHODS JOB BATCH
- 20. Batch production • Disadvantages: – Down time while machines retooled – Might hold large stocks for JIC scenarios – Batch sizes cannot exceed the machinery maximum capacity by: Shadi A. Razak 20 INTRODUCTION PRODUCTION METHODS JOB BATCH
- 21. Mass/Flow/Line production • process that use assembly lines to produce vast quantities of standardised products • Emphasises on quantity and Standardisation • Targets the low end of the market • Require careful planning and high level of synchronisation • Depends on automated assembly line by: Shadi A. Razak 21 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE
- 22. Mass/Flow/Line production by: Shadi A. Razak 22 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE
- 23. Mass/Flow/Line production • Advantages: – Economies of scale – Low maintenance – Low cost (Labour) – Quick response to demand by: Shadi A. Razak 23 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE
- 24. Mass/Flow/Line production • Disadvantages: – Sunk cost (High setup cost) – High cost down time – Inflexible – Stressful and demotivates labour – Depends on steady demand by: Shadi A. Razak 24 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE
- 25. Cell production • An adaptation of Mass Production in which the flow is broken down into self-contained teams who are responsible for whole work units • Emphasises on quality and affordability • Targets the different ends of the market by: Shadi A. Razak 25 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE CELL
- 26. Cell production • Require careful planning, efficient communication and High level of team work • Depends on skilled labour and computers by: Shadi A. Razak 26 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE CELL
- 27. Cell production • Advantages: – Improve quality – Increase productivity – Reduce coast by: Shadi A. Razak 27 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE CELL
- 28. Cell production • Disadvantages: – Different cells different speed – Sunk Cost – Team work by: Shadi A. Razak 28 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE CELL
- 29. Changing production • Changes in production methods will impact on the different business functions: – Finance – Human resources – Marketing by: Shadi A. Razak 29 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE CELL
- 30. Summary • Explained the concept of production in business • Discussed advantages and disadvantages of the different production methods • Explained the importance and value of cost and profit centres in business • Discussed the impacts of changing production on other business functions by: Shadi A. Razak 30 INTRODUCTION PRODUCTION METHODS JOB BATCH MASS / FLOW / LINE CELL