Production Methods For Growing Businesses
Specification:
5.1 Production Methods for Growing Businesses • use of flow production • efficient production methods • lean production techniques |
Candidates should be familiar with flow production and the how this can create efficient use of resources.
Candidates should understand how specialisation and division of labour can impact on efficiency. Candidates should consider how production might be made more efficient by the use of lean production techniques, eg Just In Time and the impact these might have on employees (such as training and motivation). |
Flow Production, Specialisation and Efficiency
flow_production.docx | |
File Size: | 24 kb |
File Type: | docx |
Learning Objectives:
- To understand how flow production works (D-E)
- To analyse the advantages and disadvantages of flow production (B-C)
- To evaluate whether flow production is the best method for a given business (A*-A)
- To understand how flow production works (D-E)
- To analyse the advantages and disadvantages of flow production (B-C)
- To evaluate whether flow production is the best method for a given business (A*-A)
Starter Activity:
Flow Production:
This occurs when an item moves continuously from one stage of the production process to another.
This occurs when an item moves continuously from one stage of the production process to another.
Advantages:
- Allows huge volumes of output and enables businesses to sell in large numbers (dependant on demand)
- Allows for specialisation (when individuals focus on a limited number of tasks. This is also called division of labour). This allows employees to become more efficient and quick at their part of the production process
- It lowers production costs per unit as you are mass producing
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Disadvantages:
- Initial costs are high (machinery and training)
- It is risky. Lots of money invested and demand may fall
- It lacks flexibility
- Specialisation and division of labour can lead to boredom and dissatisfaction (falling motivation and higher staff turnover)
The efficiency of a business refers to how well it is using its resources to produce.
High levels of input = low efficiency
Low levels of input = high efficiency
Lower unit costs mean higher efficiency.
The efficiency of a business depends upon:
High levels of input = low efficiency
Low levels of input = high efficiency
Lower unit costs mean higher efficiency.
The efficiency of a business depends upon:
- How well employees are managed
- How good suppliers are
- Investment in machinery and technology
- How goods are produced (production method and waste)
Lean Production
lean_production.docx | |
File Size: | 15 kb |
File Type: | docx |
Learning Objectives:
- To understand what lean production is (D-E)
- To analyse the impact lean production has on a business (B-C)
- To evaluate whether a business to switch to lean production (A*-A)
- To understand what lean production is (D-E)
- To analyse the impact lean production has on a business (B-C)
- To evaluate whether a business to switch to lean production (A*-A)
Starter Activity: Sum up lean production.
Lean production techniques aim to reduce the amount of waste in a business. Waste is inefficient; reducing waste reduces costs. There are many forms of waste:
- If production exceeds demand, items may be thrown away
- Wasted time is inefficient (workers having to wait to start in flow production)
- Faulty products have to be remade, costing money
- Holding stock can cost money and also risks damage or theft
Just-in-time Production
Just-in-time production means producing to order - the business only makes an item when there is a customer for it. This reduces waste caused by throwing unwanted items away.
When a customer places an order, the business orders from suppliers and starts producing. For this to work, suppliers must be able to respond quickly to orders and make deliveries.
Advantages
Disadvantages
Just-in-time production means producing to order - the business only makes an item when there is a customer for it. This reduces waste caused by throwing unwanted items away.
When a customer places an order, the business orders from suppliers and starts producing. For this to work, suppliers must be able to respond quickly to orders and make deliveries.
Advantages
- Lower stock holding means a reduction in storage space
- Less working capital is tied up in stock
- Less likelihood of stock perishing
- Avoids the build-up of unsold finished product
- Less time is spent on checking quality
Disadvantages
- Little room for mistakes as minimal stock is kept
- Production is very reliant on suppliers
- There is no spare finished product available to meet unexpected orders
Kaizen
Kaizen (Continuous Improvement) is a policy of constantly introducing small incremental changes in a business in order to improve quality and/or efficiency.
Employees look for ways to improve the production process. A firm that uses this approach therefore has to have a culture that encourages and rewards employees for their contribution to the process.
Kaizen (Continuous Improvement) is a policy of constantly introducing small incremental changes in a business in order to improve quality and/or efficiency.
Employees look for ways to improve the production process. A firm that uses this approach therefore has to have a culture that encourages and rewards employees for their contribution to the process.
Lean Production and Employees
- No stock means disruption from staff (striking) can be very damaging
- This can motivate staff as they are being asked to improve the business
- Staff will need to be trained how to check quality