Production Processes
Business Management: IB Diploma, topic 5.2.2
Business Operations - Job Production
In job production, items are made individually. The second item is not started until the first item is finished.
Needs highly skilled labour
- Job production needs plenty of highly skilled workers (labour).
- This means that it is often an expensive method of production because highly skilled workers tend to be paid more.
High quality or customised items
- Job production is most appropriate for businesses that create high quality items and businesses that make customised products that meet a customer’s exact specification (design).
Niches
- Job production is also good for smaller markets or niches (small sections of a market).
- This is because job production is very individual and isn’t meant to cater to a huge amount of customers.
- Designer dresses, wedding cakes and handmade furniture are all examples of products built using job production.
Flow Production
In flow production, an assembly line is used to build identical and standardised products.
Assembly line
- An assembly line is a series of workers and/or machines that each work on a specific part of the product.
- Most tinned or packaged foods are manufactured using an assembly line.
- Lots of the cars made by General Motors are also produced using this technique; so one after another, cars will get the chassis made and then the wheels added and then the steering wheel put in until the car is finished.
Capital intensive
- Flow production is usually more capital-intensive, meaning that there is more machinery and less labour used in production.
Mass market and low production cost
- Flow production is best used in an industry that needs a low cost of production and provides for a large customer base.
- If a company used job production for cars, then they would be less able to compete on the basis of price because they would have higher average costs.
- Most mass market products like shampoo, cereal and coffee will be produced using flow production because it can cater for a higher volume of customers.
Batch Production
Batch production is similar to job production, but instead of making singular items, groups of items are made together. A baker making batches of loaves of bread is an example of batch production.
Lower average costs than job production
- Batch production usually has lower average costs than job production because small quantities are made together.
- This means that overheads like electricity for a baking oven can be shared across more than one unit of output.
Costs of switching production
- When changing production, machines have to be washed down and this can be costly and time consuming.
- For example, when Cadbury makes moulded chocolate bars that contain nuts (e.g. Fruit and Nut), the same machinery has to be washed and prepared to avoid cross-contamination. Otherwise, consumers that have nut allergies may become ill or die.
Test yourself on Production Processes
Why is job production an expensive method of production?
Which of the following items is least likely to be made using job production?
What are the benefits of flow production?
Flow production is "capital intensive", what does this mean?
Shampoo is produced using an assembly line so that a large customer base can be catered for. What type of production is being used to produce shampoo?