5.2: Operations Management

What are operations methods

Job production is a production method that involves creating highly customized products tailored to individual customer needs.
These products are often unique and one-of-a-kind, such as bespoke clothing, custom-built homes, or personalized artwork.
Job production typically involves skilled labor and can be time-consuming and expensive.

Batch production is a production method where identical products are produced in batches.
This method is suitable for businesses that offer a variety of products, as it allows for flexibility in production levels based on demand.
While batch production offers economies of scale and specialization, it also requires careful inventory management and can lead to repetitive tasks for workers.

Mass production is a manufacturing method that involves producing large quantities of standardized products. It often uses automated systems and specialized equipment to achieve economies of scale and reduce production costs. Examples of mass-produced goods include cars, electronics, and consumer goods.
Flow production is a type of mass production where products are produced in a continuous, sequential process. It relies heavily on automation and is often used for high-volume production of everyday goods.

Businesses often combine different production methods to meet their specific needs. For example, while Burger King primarily uses batch production, they also offer mass customization by allowing customers to customize their burgers. Mass customization involves using flexible manufacturing systems to produce products that meet individual customer preferences.
Mass customization offers the benefits of both mass production and job production: low unit costs and flexibility. Businesses often offer a basic product with additional customizable features, such as personalized packaging or different product specifications. This approach has become more popular as consumers seek unique products.
Examples of mass customization include:
Burger King: Allowing customers to customize their burgers
Cadbury's and Coca-Cola: Printing names on packaging
Apple: Offering various MacBook specifications
Mass customization can provide customers with personalized products while maintaining the benefits of mass production, such as lower costs.

The choice of operations method depends on various factors, including market size, the relative cost of labor and capital, and the business's aims and objectives.
Market size: Larger markets often favor capital-intensive methods like mass and flow production, while smaller firms may use batch or job production.
Labor and capital costs: If labor costs are high, businesses may choose capital-intensive methods to reduce reliance on labor.
Business goals: Profit-oriented businesses may prefer mass markets and capital-intensive methods to minimize costs, while risk-averse businesses may choose smaller-scale operations for better control.
Ethical considerations also play a role in supplier and outsourcing choices. Businesses may face pressure to address ethical issues in their supply chains, even if it means higher costs or potential disruptions.