PRODUCTION SYSTEMS
- 1. PRODUCTION SYSTEMS By Naeem Akram Noor College of Business & Sciences
- 2. What is production? Production can be explained as an act of either manufacturing or mining or growing of goods (commodities) generally in bulk for trade. Production is a method employed for making or providing essential goods and services for consumers.
- 3. What is production? It is a process that puts intangible inputs like ideas, creativity, research, knowledge, wisdom, etc. in use or action. It is a way that transforms (convert) tangible inputs like raw- materials, semi-finished goods and unassembled goods into finished goods or commodities.
- 4. What is production system? Production system may be defined as, "The methods, procedure or arrangement which includes all functions required to accumulate (gather) the inputs, process or reprocess the inputs, and deliver the marketable output (goods)."
- 5. Meaning of production system Production system consists of three main components viz., Inputs Conversion Process and Output.
- 6. Meaning of production system Inputs include raw-materials, machines, man-hours, components or parts, drawing, instructions and other paper works. Conversion process includes operations (actual production process). Operations may be either manual or mechanical or chemical. Operations convert inputs into output. Conversion process also includes supporting activities, which help the process of conversion. The supporting activities include; production planning and control, purchase of raw-materials, receipt, storage and issue of materials, inspection of parts and work-in- progress, testing of products, quality control, warehousing of finished products, etc.
- 7. Meaning of production system Output includes finished products, finished goods (parts), and services. The three components of a production system are depicted in this diagram.
- 8. Examples The examples of a production system are as follows: Tangible goods : Consider an example of a manufacturing industry like a Sugar Industry. Here, sugarcane is first used as an input, then the juice of sugarcane is processed through a conversion process, finally to get an output known as a refined sugar (used for mass consumption).
- 9. Examples Intangible goods : Consider an example from a service industry that of a software- development firm or company. Here, initially, written program codes are used as an inputs. These codes are then integrated in some database and are provided with a user-friendly interface through a conversion process. Finally, an output is made available in form of an executable application program.
- 10. Types of Production System The normal way of classifying production systems is under four broad headings as follows. 1) Job production 2) Batch production 3) Mass production 4) Process production
- 11. Job production This type of production system is concerned with making a (usually) high-priced product to an order which is not likely to be repeated –i.e. a one-off job. This calls for skilled workers, who can be flexible in adapting their skills to producing just what the customer requires. A crucial consideration in job production is the fact that nearly all the production costs fall to the one job. Since they cannot be spread over a long run of production, the fixing of a correct selling price is very important.
- 12. Example of Job production Designing and implementing an advertising campaign Auditing the accounts of a large public limited company Building a new factory Installing machinery in a factory
- 13. Advantages of Job production The main advantages of using job production include: Advantages Product usually high quality Producer meets individual customer needs Greater job satisfaction – involved in all stages of production
- 14. Disadvantages of Job production The main disadvantages of using job production include: Disadvantages Cost of producing one unit or job is higher Labour –intensive Requires investment in skills and training
- 15. Batch production This is the production of a given quantity of goods –i.e. a number of units of a similar specification. There may be repeat orders for these goods, but there is no continuous flow of production. Batch production resembles job production in that these are specialist goods made to fit customers' requirements, but differs in that the costs of production can be spread over a number of units, so allowing firms more scope to invest in new machinery.
- 16. Example of Batch production An example of batch production might be aircraft engines for a given type of aeroplane.
- 17. Advantages of Batch production The benefits of batch production include: Making in batches reduces unit costs Can still address specific customer needs (e.g. size, weight, style) Use of specialist machinery & skills can increase output and productivity
- 18. Disadvantages of Batch production The drawbacks of batch production include: Time lost switching between batches – machinery may need to be reset Need to keep stocks of raw materials. Cash also investment in work-in-progress Potentially de-motivating for staff
- 19. Mass production This is the continuous output of uniform, standardised products for a mass market which offers a regular, continuous demand. The goods are relatively low priced and are produced by the use of machines and semi- skilled and unskilled labour. A sub-type of mass production is flow production.
- 20. Mass production This makes use of machines and labour in a sequence called a production line. Cars for the mass market are produced by materials and parts moving along an assembly line until eventually a finished car rolls off at the end. Flow production can take many of the features of mass production and apply them to the manufacture of relatively high-cost goods like cars, washing machines and TV sets.
- 21. Examples of Mass production Examples include: Cars Chocolate bars and Electronic goods.
- 22. Advantages of Mass production The benefits of mass production include: Labour costs are usually lower. Materials can be purchased in large quantities, so they are often cheaper. Large number of goods are produced.
- 23. Disadvantages of Mass production The main disadvantages of using mass production include: Machinery is very expensive to buy, so production lines are very expensive to set up. Workers are not very motivated, since their work is very repetitive. Not very flexible, as a production line is difficult to adapt. If one part of the line breaks, the whole production process will have to stop until it is repaired.
- 24. Process production This refers to the process used to extract products such as oil and gas. It makes possible a continuous flow of production, using expensive machinery, highly automated methods and a mass marketing technique. In mass production, flow production and process production, a small range of products is produced in very large quantities.
- 25. Process production Large capital investment is involved and a mass market is needed to absorb the goods produced. The type of production system will have implications for the way in which a production department is structured, and certain theorists see the type of production system as an important influence on the way in which the whole organisation is structured.
- 26. Examples of process production Examples include: Oil refining Cement
- 27. The advantages of process production The advantages of using process production include: Processes can normally be automated which reduces unit costs Large quantities can be produced Ideal for products which have to be of a consistent quality
- 28. The disadvantages of process production The disadvantages of using process production include: Heavy investment required in process design and production equipment / facilities Difficult and disruptive if the production process has to be stopped Little opportunity to make different versions of the product