Operations management is concerned with producing goods and services efficiently while ensuring quality and meeting customer needs. Choosing the right production method and managing resources effectively are central to a firm’s success.
Methods of production
- Job production – custom work where a single product is made to specific requirements (e.g. bespoke furniture). It provides high quality and flexibility but is labour‑intensive and costly.
- Batch production – a limited number of identical products are made in a series of stages (e.g. bakery goods). Machinery and workers can switch to different batches but downtime may occur.
- Flow (mass) production – continuous production of large quantities of a standardised product (e.g. cars). It achieves economies of scale and low unit costs but requires high capital investment and is inflexible.
The choice of method depends on the nature of the product, demand level, cost considerations and the need for flexibility.
| Method | Main features | Advantages | Disadvantages |
|---|---|---|---|
| Job production | Unique, custom‑made products produced one at a time. | High quality and customisation; customer satisfaction; skilled workforce. | High unit costs; labour intensive; slow production. |
| Batch production | Groups of identical products made together. | Flexibility to switch products; economies of scale in batches. | Time lost when switching between batches; inventory build‑up. |
| Flow (mass) production | Continuous production on an assembly line. | Very low unit costs; consistent quality; high output. | High capital investment; inflexible to product changes; boredom for workers. |
Explaining the trade‑offs: Job production offers personalised products and high quality but suffers from high costs and slow output. Batch production strikes a balance by enabling small economies of scale and product variety, though time is lost when switching batches and unsold inventory can build up. Flow production achieves the lowest unit costs and consistent quality through continuous processes, but requires large capital investment and is inflexible – any change to the product can halt the entire line. Businesses choose the method that best fits demand patterns, product complexity and resource constraints.
Productivity and efficiency
Productivity measures how much output is produced from a given amount of inputs. It can be improved by:
- Investing in modern machinery and technology.
- Training employees to improve skills and work practices.
- Motivating staff through incentives and good working conditions.
- Organising production to reduce waste and downtime.
Lean production aims to minimise waste while maintaining quality. Techniques include just‑in‑time (JIT) inventory management, which reduces stock levels by ordering supplies only when needed; Kaizen (continuous improvement), which involves all employees suggesting ways to improve efficiency; and cell production, where teams work on part of the process.
Advantages of lean production
- Less storage of raw materials or finished goods reduces costs and frees up space.
- Quicker production with fewer defects means better use of equipment and lower rework costs.
- Lower inventories mean less money tied up in stock, improving cash flow.
- Improved health and safety and cleaner work areas lead to fewer accidents and absenteeism.
- Lower overall costs allow firms to offer more competitive prices and potentially earn higher profits.
Disadvantages of lean production
- Relies heavily on very reliable suppliers – if deliveries are delayed, production can halt.
- Vulnerable to external disruptions (e.g. transport problems or strikes) because there are no large inventories to fall back on.
- Requires significant training and culture change; some employees may resist new methods.
- Initial redesign and reorganisation of processes can be time‑consuming and expensive.
Labour‑intensive and capital‑intensive production
Production can rely mainly on labour or capital. Labour‑intensive methods use more workers relative to machinery and are common in service industries and where labour is cheap. Capital‑intensive methods use more machinery and automation, achieving higher productivity but requiring significant investment.
Examples and applications
Job production is used by wedding cake designers who create unique cakes tailored to each couple’s tastes. Each cake is different, requires skilled craftsmanship and commands a high price. Batch production is typical in bakeries that produce dozens of the same loaf or cookie before switching to another product; this allows some economies of scale while retaining flexibility to offer different flavours. Car assembly lines illustrate flow production: thousands of identical cars roll off conveyor belts each day, with workers or robots performing specialised tasks at high speed. This method achieves low unit costs but is expensive to set up and inflexible when designs change.
Labour‑intensive production is common in hairdressing or teaching, where the service depends primarily on the skills and time of people. Capital‑intensive methods are found in semiconductor manufacturing, where precision robots work in clean rooms. Lean production techniques, such as just‑in‑time, help manufacturers like Toyota minimise inventories and reduce waste, while continuous improvement schemes encourage employees to suggest small, everyday changes that collectively boost productivity.
