Skip to main content

PRODUCTION METHODS

FLOW PRODUCTION

As a business grows the scale of its operations, it often needs to change its method of production to allow greater production capacity.

A small business might use job or batch production to provide a personalised or distinctive product. However, if the product is intended for much larger, mass markets, then alternative methods of production may be required in order for the product to be produced efficiently. A key production method in these circumstances is flow production.

Flow production involves a continuous movement of items through the production process. This means that when one task is finished the next task must start immediately. Therefore, the time taken on each task must be the same.

Flow production (often known as mass production) involves the use of production lines such as in a car manufacturer where doors, engines, bonnets and wheels are added to a chassis as it moves along the assembly line. It is appropriate when firms are looking to produce a high volume of similar items. Some of the big brand names that have consistently high demand are most suitable for this type of production.

Advantages of flow production

Flow production is capital intensive. This means it uses a high proportion of machinery in relation to workers, as is the case on an assembly line. The advantage of this is that a high number of products can roll off assembly lines at very low cost. This is because production can continue at night and over weekends and also firms can benefit from economies of scale, which should lower the cost per unit of production.

Disadvantages of flow production

The main disadvantage is that with so much machinery it is very difficult to alter the production process.

This makes production inflexible and means that all products have to be very similar or standardised and cannot be tailored to individual tastes.

Another disadvantage of using flow production is that the work can be pretty boring for employees involved. Keeping staff motivated is therefore an important issue for management.

Comments

Popular posts from this blog

EXTERNAL COSTS AND EXTERNAL BENEFITS

External costs An external cost occurs when producing or consuming a good or service imposes a cost (negative effect) upon a third party. If there are external costs in consuming a good (negative externalities), the  social costs  will be greater than the private cost. The existence of external costs can lead to market failure. This is because the free market generally ignores the existence of external costs. External marginal cost (XMC)  the cost to a third party from the consumption/production of one extra unit. Example of External Cost Driving a car imposes a private cost on the driver (cost of petrol, tax and buying car). However, driving a car creates costs to other people in society. These can include: Greater congestion and slower journey times for other drivers. Cause of death for pedestrians, cyclists and other road users. Pollution, health-related problems. Noise pollution. Example of Production External Cost Producing electricity from burning coal leads to air ...

What are business activities?

What Are Business Activities? Business  activities include any activity a business engages in for the primary purpose of making a profit. This is a general term that encompasses all the economic activities carried out by a company during the course of business. Business activities, including operating, investing and financing activities, are ongoing and focused on creating value for  shareholders . KEY TAKEAWAYS Business activities are any events that are undertaken by a corporation for the purpose of earning a profit. Operating activities relate directly to the business providing its goods to the market, including manufacturing, distributing, marketing, and selling; they provide most of the company's cash flow and hugely influence its profitability. Investing activities relate to the  long-term use of cash , such as buying or selling a property or piece of equipment, or gains and losses from investments in financial markets and operating subsidiaries. Financing activitie...

Aims of a business

o    To Survive Many a times you find yourself fighting to survive. Sometimes your life is threatened by a certain sickness and you must do everything in your power to fight the disease and survive. It is the same thing with a business, it must survive. A business finds itself faced with tough competition and other things that threaten its survival. To survive means that the business is able to fight competition, gain new customers find reliable suppliers and grow. It is able to be successful and not fail. o    To make a Profit If you were to start a business today, what would be your main objective? Most people start businesses to make a profit. This means that the business is able to sell its goods and services at a price above the buying price . The difference between the selling price and buying price is the profit. For example, if you bought a product at E20 and sold it at E50, the E30 is your profit. o    To Grow or Expand Imagine a situatio...