What are Operations Methods?
Operations methods are the specific methods by which production takes place.
Job Production
Job production is a production method that involves creating highly customized products tailored to individual customer needs.
These products are often unique and one-of-a-kind, such as bespoke clothing, custom-built homes, or personalized artwork.
Job production typically involves skilled labor and can be time-consuming and expensive.
Advantages and Disadvantages of Job Production
Advantages
High-quality products: Job production often results in high-quality products due to the attention to detail and craftsmanship involved.
Motivated workers: Workers involved in job production may be highly motivated due to the satisfaction of creating unique products.
Flexibility: Job production allows for flexibility in design and specifications, making it easier to accommodate customer preferences.
Uniqueness: Customized products can create a unique selling point for a business, allowing them to charge premium prices.
Variety: Job production offers customers a wide variety of choices that may not be available with other production methods.
Disadvantages
Time-consuming: Job production can be time-consuming, as each product is customized to meet specific customer requirements.
Expensive: Job production can be expensive due to the labor-intensive nature of the process and the need for skilled workers.
Delayed payments: There can be a significant time lag between receiving an order and receiving payment, as products are often custom-made.
Limited economies of scale: Job production may limit economies of scale due to the production of individual items.
Unpredictable orders: The irregularity of orders can lead to cash flow problems for businesses.
Batch Production
Batch production is a production method where identical products are produced in batches.
This method is suitable for businesses that offer a variety of products, as it allows for flexibility in production levels based on demand.
While batch production offers economies of scale and specialization, it also requires careful inventory management and can lead to repetitive tasks for workers.
Advantages
Economies of scale: Batch production can lead to economies of scale by producing larger quantities.
Specialization: Workers can specialize in specific tasks, leading to increased productivity and quality.
Variety: Batch production allows for the production of a variety of products, offering customers more choices.
Reduced risk: Producing a variety of products can reduce the risk of relying solely on a single product with limited sales potential.
Disadvantage
Inventory costs: Batch production can result in high inventory costs due to the need for storage and insurance.
Repetitive tasks:
The repetitive nature of tasks can lead to boredom and reduced motivation among workers.
Inflexibility: Once a batch is started, it can be difficult to switch to another, leading to potential delays.
High production costs: Batch production can be costly due to the reliance on specialized machinery and equipment.
Mass/Flow Production
Mass production is a manufacturing method that involves producing large quantities of standardized products. It often uses automated systems and specialized equipment to achieve economies of scale and reduce production costs. Examples of mass-produced goods include cars, electronics, and consumer goods.
Flow production is a type of mass production where products are produced in a continuous, sequential process. It relies heavily on automation and is often used for high-volume production of everyday goods.
Advantages
Economies of scale: Mass production can lead to significant cost reductions due to the production of large quantities.
Standardization: Mass production ensures consistency in product quality.
Efficiency: Automated systems in flow production can increase efficiency and reduce waste.
Lower costs: The standardization and efficiency of mass production can lead to lower average costs.
Increased productivity: Specialized equipment and skilled labor can lead to higher productivity levels.
Disadvantages
High capital investment: Mass production requires a high initial investment in machinery and equipment.
Lack of flexibility: It can be difficult to change production to accommodate different product variations.
Repetitive tasks: Workers in mass production may face repetitive and monotonous tasks.
High volume requirements: Mass production is most effective when producing large quantities of a product.
Dependence on machinery: A breakdown in machinery can disrupt the entire production process.
Mass Customization
Businesses often combine different production methods to meet their specific needs. For example, while Burger King primarily uses batch production, they also offer mass customization by allowing customers to customize their burgers. Mass customization involves using flexible manufacturing systems to produce products that meet individual customer preferences.
Mass customization offers the benefits of both mass production and job production: low unit costs and flexibility. Businesses often offer a basic product with additional customizable features, such as personalized packaging or different product specifications. This approach has become more popular as consumers seek unique products.
Examples of mass customization include:
- Burger King: Allowing customers to customize their burgers
- Cadburys and Coca-Cola: Printing names on packaging
- Apple: Offering various MacBook specifications
- Mass customization can provide customers with personalized products while maintaining the benefits of mass production, such as lower costs.
Which Method to Use?
The choice of operations method depends on various factors, including market size, the relative cost of labor and capital, and the business’s aims and objectives.
Market size: Larger markets often favour capital-intensive methods like mass and flow production, while smaller firms may use batch or job production.
Labor and capital costs: If labor costs are high, businesses may choose capital-intensive methods to reduce reliance on labor.
Business goals: Profit-oriented businesses may prefer mass markets and capital-intensive methods to minimize costs, while risk-averse businesses may choose smaller-scale operations for better control.
Ethical considerations also play a role in supplier and outsourcing choices. Businesses may face pressure to address ethical issues in their supply chains, even if it means higher costs or potential disruptions.
