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Creating a product from start to finish that is tailor made to meet customer requirements – usually one-off or unique items (e.g. violin, painting)
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Only one person or group’s job to complete entire product
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Small firms are likely to use job production
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Advantages
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High quality and uniqueness
High motivation of workers More flexibility |
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Disadvantages
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Labor intensive and expensive
Time consuming due to customer requirements Long working-capital cycle (due to slow production) Minimal economies of scale |
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Producing limited number of identical products (batch) at a time (e.g. chocolates, CPUs, breeding)
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Usually used when level of demand is not clear and the business produces a range of products
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Advantages
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Technical and purchasing economies of scale
Specialisation – better quality and productivity Variety – reduce risks of producing single product |
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Disadvantages
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Inflexibility – can’t stop once started
Storage costs Boredom – reduced motivation |
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Continuous production process of standardized products
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Flow/mass are usually interchangeable
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Generally capital intensive
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Flow production: sequence of steps to create product (e.g. newspapers/magazine)
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Mass production: manufacturing large amounts of standardised products (e.g. Chips)
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Advantages
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High production scale at low cost due to economies of scale
Initial high costs is spread over high volume of units Standardized quality (assuming low defect rate) Low cost for workers |
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Disadvantages
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Low motivation
Breakdowns cause major delays Inflexible – no reworking or customization High initial set-up, running, and replacement costs Requires effective storage |
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Modern adaptation of assembly line
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Parts of production are delegated to teams or cells for completion
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Any member of team can contribute to the task
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Cells work independently but rely on each other to achieve targets
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Advantages
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Certain degree of autonomy in decision making
Improved standards of quality ↳ Greater sense of responsibility and accountability in team Higher levels of motivation (team working, empowerment, etc.) Specialization |
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Disadvantages
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Output may be lower
Higher chances for intra- and intergroup tension and conflict Capital intensive to initiate and sustain |
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Labour intensive
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Greater proportion of labour cost than capital cost
Job production and service sector is often labour intensive Offers personalised service but may have more HR issues |
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Capital intensive
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High proportion of capital costs compared to labor cost
Leads to increased levels of output and productivity Needs sufficient demand to justify capital investment Homogenous products; may have no USP Standardisation means low profit margins and high fixed costs |
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