Unit 5: Operations Management — 5.2 Operations Methods
Introduction to Production Methods
Organizations produce goods and services using different methods to balance cost, quality, flexibility, and customer needs. The main methods are Job Production, Batch Production, Mass/Flow Production, and Mass Customization.
Comparison Table of Operations Methods
| Method | Description | Advantages | Limitations | Example |
|---|---|---|---|---|
| Job Production | Single, unique product made to specification | High quality, custom-made, flexible | Expensive, time-consuming, low output | Bespoke furniture, wedding cakes |
| Batch Production | Groups of identical products produced together | Economies of scale, variety, moderate costs | Changeover delays, storage costs | Bread, clothing, printed materials |
| Mass/Flow Production | Large quantities of standardized products made continuously | Low unit cost, high efficiency | Low flexibility, repetitive, initial high investment | Cars, canned foods, electronics |
| Mass Customization | Large-scale production with individual customization | Meets specific customer needs, good efficiency | Complex systems, higher costs than mass, requires advanced tech | Custom sneakers, tailored computers |
Job Production
Job Production involves making a one-off product for a particular customer or order. Workers or teams follow the full process, allowing for creativity and customer input.
Example Formula for Cost of Job Production:
Cost_{Job} = Labour\ Cost + Material\ Cost + Overheads
Cost_{Job} = Labour\ Cost + Material\ Cost + Overheads
Batch Production
Batch Production groups products into batches that move together through the production process. It strikes a balance between flexibility and economies of scale.
Batch Output Formula:
Batch\ Output = Batch\ Size \times Number\ of\ Batches
Batch\ Output = Batch\ Size \times Number\ of\ Batches
Mass/Flow Production
Mass/Flow Production is the continuous manufacture of standardized products, often on an assembly line. It delivers high volumes at low cost but limits variety.
Unit Cost Formula:
Unit\ Cost = \frac{Total\ Production\ Cost}{Number\ Produced}
Unit\ Cost = \frac{Total\ Production\ Cost}{Number\ Produced}
Mass Customization
Mass Customization combines the benefits of mass production with flexibility so customers can personalize certain features. It uses tech for efficient customization.
Value Creation Formula:
Value\ Created = Standard\ Value + Custom\ Value
Value\ Created = Standard\ Value + Custom\ Value
Choosing the Right Method
- Type of product and its complexity
- Customer requirements and order volume
- Cost of setup and available technology
- Speed and flexibility needed
- Market trends and competition
Conclusion
Understanding operations methods helps organizations choose efficient, quality-driven production suited to their goals and customer needs.