Have you ever wondered how your favourite snack, your comfy shoes, or even the building you’re in was made? It all comes down to something called the production process types. Think of it like a recipe: you start with a bunch of ingredients (inputs), follow a series of steps (the process), and ultimately end up with a delicious meal (the output) that people want to eat it!
In business, the production process types are about transforming different “ingredients” into finished products or services that customers want to buy. It’s the journey a product takes from an idea to something ready for the market.
To make this happen, businesses use two main types of “ingredients” or resources:
Resources for Transformation
- Transforming Resources: Imagine these as the “chefs” and “kitchen” in our recipe analogy. These are the things that do the transforming. This includes:
- Buildings: The factories, offices, or shops where the work happens.
- Machinery: All the equipment and tools, from simple hand tools to complex robots.
- Computers: The technology that helps design, manage, and control the process.
- People: The skilled workers, engineers, designers, and managers who make everything happen. They are often the most crucial part!
- Transformed Resources: These are the “food” ingredients themselves – the things that get transformed. These are typically:
- Raw Materials: Basic materials like wood, metal, plastic, or cotton.
- Components: Parts that have already been made and are put together to create a larger product, like an engine in a car or a zipper on a jacket.
The Production Chain: Adding Value Every Step of the Way
Every production process is like a chain, with different “links” or stages. At each stage, something very important happens: value is added.
What exactly does “adding value” mean? It means making a product or service more desirable to a customer, so they are willing to pay more for it. Think about it:
- Raw wood isn’t worth much on its own.
- However, when a skilled carpenter transforms that wood into a beautiful wooden table, they’ve added value. People will definitely pay more for the table than for the raw wood.
Adding value isn’t just about physically making something. It also includes all the things that make a product more appealing and available to customers. This includes:
- Marketing: How a business tells people about its product.
- Advertising: Catchy commercials or online ads that make you want to buy.
- Promotion: Special offers or discounts that encourage sales.
- Distribution: Making sure the product gets from the factory to the shops or directly to your door.
It’s super important for businesses to understand where and how they add value. By focusing on and improving these value-adding steps, they can make their products even better and their business more successful!
Now, let’s explore the three main ways businesses organise their production:
Production Methods: How Businesses Make Things
Businesses choose different ways to organise their production based on what they’re making and how many they need. Think of these as different cooking styles for our recipe analogy!
1. Job Production: Unique Creations, Made Just for You
Imagine you want a custom-made birthday cake – something truly unique. That’s a perfect example of job production.
What is it?
Job production is all about creating single, unique items one at a time. Often, one skilled person or a small team handles the work. Each project is a standalone task that requires complete focus until it’s finished.
Consider these examples:
- Building a bridge: A massive, one-of-a-kind structure.
- Designing a custom dress: Tailored exactly to one person’s measurements and style.
- Hand-knitting a sweater: Each stitch is carefully placed for that specific item.
- Writing a book: A creative process resulting in a single, distinct work.
- Rewiring a house: A specific project for a specific home.
- Cutting hair at a salon: Each haircut is unique to the customer.
- Creating a modular office building: A company like Portakabin designs and assembles a specific building for a client.
Sometimes, a business might make several similar unique items at the same time, like building several identical ships for a navy. Even though they are similar, they still treat each one as a major, individual project.
Benefits of Job Production
Why is it great?
- Tailored to You: The biggest advantage is that the product exactly matches the customer’s requirements, often right from the design stage. It’s built specifically for their order, not just produced hoping someone will buy it later. For example, a custom motorcycle painter will work closely with a customer to create a unique design that truly reflects their vision.
- Easy Quality Control: Since only one item is being made at a time, it’s easier to keep a close eye on the quality. Supervision and checking the work are relatively simple.
- Flexible Changes: If the customer changes their mind or wants something tweaked during the process, it’s usually quite easy to adjust the plans. For instance, if a printing company like Polestar is making a catalogue for a grocery chain, they can relatively simply change the prices of some of the goods listed in the catalogue.
- Happy Workers: Working on a single, complete project, handling various tasks, and being part of a small team can be very satisfying for employees. Think of an airline crew: they treat each flight as a specific job, giving individual attention to passengers’ specific needs, for example, vegetarian dishes or wheelchair access to the flight. This often leads to a greater sense of achievement.
2. Batch Production: Making Groups of Similar Things
Imagine a bakery that makes hundreds of cookies in different flavours – chocolate chip, oatmeal, and peanut butter. They don’t just make one of each; they make a whole “batch” of chocolate chip cookies, then a whole “batch” of oatmeal cookies, and so on. This is batch production.
What is it?
Batch production involves making a specific group or “batch” of identical items together. Once one batch finishes, the next batch, often of a different product, starts.
Consider these examples:
- A machine making different engine parts: On Monday, it produces a type 1 engine part; on Tuesday, it produces a type 2 engine part; on Wednesday, a type 3, and so on. All engine parts will then move forward to the final assembly of different categories of engine parts.
- Baking bread in a bakery: They bake a batch of loaves, then a batch of rolls, then a batch of croissants.
- Printing different magazines: A printing press will print a large quantity of one magazine, then change its settings to print a large quantity of another.
- Producing different colours of paint: A factory will make a batch of blue paint, then clean the equipment and make a batch of red paint.
This method is sometimes called “intermittent” production because there are breaks or “rests” between different batches as the machinery is set up for the next product. You’ll often find partly finished products waiting between stages – this is called “work-in-progress.”
Benefits of Batch Production
Why is it great?
- Versatility for Similar Goods: It’s particularly suitable for making a wide range of products that are similar but not identical. The same machinery can be used, just with different settings for each batch. For instance, batches of letters can be sent out to customers of an insurance company.
- Efficient Machinery and Workforce: This method economises on the range of machinery needed and reduces the need for a highly flexible workforce.
- Quick Response to Orders: Businesses can often respond quickly to customer orders by moving buffer stocks of work-in-progress or partly completed products through the final production stages.
- Cost Savings (Economies of Scale): Because you’re making things in groups, you can often buy raw materials in larger quantities, which can lead to discounts. This is known as bulk purchasing. It also allows for more efficient production techniques, saving money across various areas of the organisation.
- Easier Costing and Management Information: Since you’re making defined batches, it’s easier to track the costs associated with each type of product. This provides better information for managers to make decisions.
3. Flow Production: Continuous and Consistent
Imagine a huge factory that produces thousands of identical soft drinks every hour, 24 hours a day. Bottles move along a conveyor belt, getting filled, capped, and labelled without stopping. This is flow production.
What is it?
If batch production has “rests” between batches, then flow production is like removing those rests completely. It’s a continuous process where parts and sub-assemblies constantly pass from one stage to another until completion.
Units are worked upon in each operation and then passed straight on to the next work stage without waiting for the batch to be completed. To make sure the production line can work smoothly, each operation must be of standard lengths, and there should be no movements or “leakages” from the line (i.e., hold-ups to work-in-progress).
For flow production to succeed, businesses need a continuity of demand. If demand varied, this could lead to a constant overstocking of finished goods. Although modern robotics allows for variations in products produced through continuous flow techniques, typically, such products are relatively standardised.
Achieving a smooth flow of production requires considerable pre-production planning. This ensures raw materials are purchased and delivered just in time, sufficient labour is employed, and there’s continuous attention to quality throughout the entire production process.
Benefits of Flow Production
Why is it great?
- Reduced Waste and Costs (Just-in-Time): Businesses can easily use just-in-time techniques to eliminate waste and minimise costs.
- Lower Labour and Production Costs: Detailed planning and the use of robotics and automation reduce labour and other production costs significantly.
- Quick Quality Checks: Businesses can quickly spot deviations in the line through ongoing quality control techniques.
- Minimal Work-in-Progress: Since there’s no rest between operations, work-in-progress levels remain low.
- Minimal Storage Space: The need for storage space is minimal.
- Minimal Physical Handling: The physical handling of items is minimal.
- Fast Conversion of Investment to Sales: Investment in raw materials and parts quickly converts into sales.
- Easy Control: The production process is easy to control once set up.