10. Methods of Production

8/19/2019 10. Methods of Production

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Production

What are we going to discuss

• Types of production methods

• Production techniques

• Control

• Stock

• Quality

Production Department

• Effective and efficient creation of goods and

services

• Maintaining Quality

Things to consider when producing goods

• The cost of production

• The quality required

•

The quantity needed

• What customers want



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Methods of production

• Job production

• Batch production

• Flow production

• Lean production

• Cell production

What is job production?

• It is also called one-off production , jobbing ,custom made and ,made to measure.

• Involves producing a one-off product for aspecific customer. Job production is mostoften associated with small firms (makingrailings for a specific house, building/repairinga computer for a specific customer, makingflower arrangements for a specific weddingetc.)

• Each item might have particular specification

• Normally concerned with making a high priced

product to an order which not likely to be

repeated

• Highly skilled workers are required for the job

• More of a labor intensive than capital

intensive

• Lack of economies scale• E.g. wedding dresses, hair dressers, painting

and decorating, plumbing jobs etc…



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Advantages

• Product is according to customers

specifications

• There is no finished goods stock.

• Workers are motivated as they carry out the

variety of tasks.

• Firms could charge high prices

• Quality is usually higher.

Disadvantages

• High unit cost of production

• The requirement of skilled labors would

increase the cost of production.

• slow compared to other methods

BATCH PRODUCTION

“The production process where

products/components are

produced in batches and

where each separate batch

consists of a number of thesame products/components.”



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What is Batch production

• Producing large number of identical items (a

batch)

• For example, furniture manufacturers such as

Ikea often make their furniture in batches. A

particular design may be manufactured two

hundred times and then the style will change

and the production line will be switched to

manufacture this new design

• No need for very skilled labors

• Cost of production could be spread over many

units

• E.g. furniture, stationeries, chocolates,

cosmetics

Advantages

• Suitable for a wide range of nearly similar goodswhich can use the same machinery on differentsettings.

• More variety for workers resulting in more jobsatisfaction.

• Batch Production is flexible and can be used to produce batches of similar products with only asmall change to the tooling. Batches can berepeated as many times as needed with products being cheaper due to lower production costs. Italso enables a variety of styles to be made.

• It can reduce initial capital outlay because a single production line can be used to produce several products. Batch production can be useful forsmall businesses who cannot afford to runcontinuous production lines. If a retailer buys a batch of a product that does not sell, then the producer can cease production without having tosustain huge losses. Batch production is also

useful for a factory that makes seasonal items, products for which it is difficult to forecastdemand, a trial run for production, or productsthat have a high profit margin.



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Disadvantages

• Relatively short production runs result inhigher unit costs.

• Changeover between batches results inresources being ideal at times.

• Versatile machinery and multi-skilled labor isstill needed which might cost more.

• Warehouse space is needed for raw materialand finished goods.

What is flow production

• Continuous output of uniform, standardizedproducts for a mass market

• Such products have regular demand

• More of capital intensive with large number ofsemi-skilled and unskilled workers

• Use of its machine and workers in a productionline

• A.K.A Mass production, repetitive flowproduction, series production, or serialproduction

• In mass production different workers in the

production line are responsible for a certain

part of the product. (division of labor)

• E.g. Fish canning, TVs, Washing Machine, Cars

for mass markets, glass, soft drinks etc



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Advantages

• Increased profit

• Economies of scale

• Lower labor cost

• Increased productivity

• Standardized products

• More assured quality

• Automation

• Unskilled and semi-skilledworkers

Disadvantages

• High initial outlay

• Demand should be constant

• Higher dependence on the production line (what if amachine break down)

• Repetitive and boring tasks

• Working in unsociable hours

• Large inventories of raw material to prevent stockout.

Lean production

• Series of management techniques intended to

make more efficient use of limited resources.

• Main aim is to reduce the waste

• Waste associated transport, inventory,

motion, waiting, over production, and defects.

• E.g. Kaizen, JIT, TQM, Bench Marking etc

• Requires skilled and committed workforce

• Derived from Toyota production system

• Minimizing the resources used in other words

producing the most output with less

resources.

• The philosophy is to produce for order rather

than stock.

• Very popular among Japanese businesses



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The 10 rules of lean production

1. Eliminate waste

2. Minimize inventory

3. Maximize flow

4. Pull production from customer demand

5. Meet customer requirements

6. Do it right the first time

7. Empower workers

8. Design for rapid changeover

9. Partner with suppliers

10.Create a culture of continuous improvement

Just-In-Time (JIT)

• Just-in-time (JIT) is a production strategy thatstrives to improve a business' return oninvestment by reducing in-process inventoryand associated carrying costs.

• Also known as Toyota Production System

• production system in which raw materials,working- progress and finished products aredelivered at the precise time they are needed.

• Producing for sale rather than stock

Advantages of JIT

• Reduced inventory

• Less finance tied up in stock – improve cash flow

• Less risk of waste

• Less space required

• “produce to order” there reduce the risk of unsolditems

• Less need for stock controller and stock personnel• increased scope for use of computerized

information system to improve integration ofdepartments and the smooth operation of theproduction system.

Disadvantages of JIT

• The need for reliable and flexible suppliers

• Increased ordering and administrative costs

• The process is more at risk of supply

breakdown

• Economies of scale such as bulk buying might

be lost

• Requires highly skilled planning and control



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• Kaizen (

): Japanese term meaning‘continuous improvement’. It is a means of

improving performance by involving allemployees in the suggestion andimplementation of small changes. Thecumulative effect of these changes, often theidea of shop floor workers, is a steady rise inproductivity, a fall in the reject rate and theraising of quality. Products will be made ‘right

first time’ and to the correct specification thus

assuring the customer of the quality of theproduct.

5 main elements of Kaizen

• Teamwork

• Personal discipline

• Improved morale

• Quality circles

• Suggestions for improvement

• Benchmarking: Benchmarking is the practicewhereby a firm studies the ‘best’ production

and marketing process used by immediatecompetitors and firms from similar industries.Benchmarking involves identifying processesthat need improvement; studying how otherfirms perform these processes particularlywell; adapting and implementing thoseprocesses and monitoring the impact of thechange. This ensures that a firm constantlyand consistently ‘drives’ up quality in line with

the best in the industry.

Total Quality Management (TQM)

• System which places the responsibility for quality

in the hands of all employees.

• Developing a culture which cares about quality

through out organization in every activity

• Prevention is better than cure

• Raw material inputs are of the correct standard,that the manufacturing process is fault free and

the after sales service is accurate and helpful.



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Steps to TQM Cell Production

• Production system is divided into independentteams which is called “cells”

• Each of which is responsible for a group ofgoods or major part of the manufacturingprocess.

• Each cell will produce the significant part ofthe finished product.

• Each cell passes on their “product” to next cell

thus creating an internal chain of customers

• Teams are given developed responsibilities

and control over their area.

• This helps to improve motivation, productivity

and also improve the quality of the products.

• Cell production can lead to efficiency

improvements due to increased motivation

(team spirit and added responsibility given tocells) and workers sharing their skills and

expertise

Techniques of production

• Automation: Automation is the use of controlsystems and information technologies toreduce the need for human work in theproduction of goods and services

• Cybernetics: The basis of automation in that itis concerned with the ways in whichcomputers can replace the functions of thehuman brain. Mechanization plus cyberneticsequals automation, which has advanced torobotics.



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Advantages

• Production run can be run continuously

• Less need for inspection

• Reduction in manpower hence resulting inincreased productivity

• Increased quality

• Production efficiency and speed

• Higher security

• Ease of use

• Faster decision making

• Increased safety

• Improved design through CAD/CAM

Disadvantages

• Heavy Capital Investment

• Additional cost in training the workers

• Workers with multi skill will be de-motivated

as their skills will be made redundant due to

the introduction of machines

• Dehumanization

Technology & manufacturing

• Mechanisation is when machines are used,

but people are still needed to operate them –

e.g. farm equipment.

• Automation is when machines are

programmed to carry out tasks – e.g. Coca

Cola



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Types of technology

• CAD – Computer Aided Design is when computersare used to design products.

• CAM – Computer Aided Manufacture is whenproduction machinery is controlled by computers.

• CIM – Computer Integrated Manufacture is where awhole factory is controlled by a computer.

The advantages of technology inproduction

• Large amounts can be made.

• The productivity of workers improves.

• The quality of production can be improved.

• Production can be flexible.

• Repetitive or dangerous jobs can be done bymachines.

• Assisting effective control

• Clients and major suppliers are linked withcompatible systems

• Up-to-date information on supplies, stores,

design, progress and changes.

The problems of technology

• People are often made redundant which leads to:

– High costs

– Problems with trade unions

– Industrial action.

• Specialist employees are needed = higher wages.

• Cost of re-training employees.

• Initial expense of buying and installing themachinery.

• Machine break downs, software malfunction,hacking

Innovation

• Gathering new ideas and concepts of design,technology, or production practices

• Applying new ideas to create new products

• Applying new ideas to improve existingproducts

• Initiating quality improvements to products• The improvement and development of

existing technology and process of production

• The introduction of new technology andproduction process

10. Methods of Production

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