GROUP WORK

BUS 1010D: INTRODUCTION TO BUSINESS ORGANISATION

CONTINUATION OF GROUP 5

Determine the production and operation process.

PRODUCTION PROCESS

Production is the transforming a set range of inputs, demanding on the product into those outputs
that are required by the market (demand). In this process a business or firm must purchase all the
necessary raw materials (inputs) for production. The production process then transforms them
into finished product(output) that it wishes to sell.

This involves two sets of resources-the resource to be transformed and the resources that do the
transforming.

Resources to be transformed are the raw materials and components that are transformed to end
products while resources that do the transforming include the buildings, the machinery,
computers, staff, and even the electricity that are needed to carry out the transforming processes.

Production process is also a set of series of links which form a production line or chain. At each
stage the chain value is added to the final product in the course of production. Adding value is
not just about manufacturing but includes the marketing processes including advertising,
promotion and distribution that make the final product more desirable. This is important for
businesses to identify the processes that add value so that they can enhance these processes to the
ongoing benefit of the business.

Economic well being is created in a production process, meaning all economic activities that aim
directly or indirectly to satisfy human wants and needs. The degree to which the needs are
satisfied is often accepted as a measure of economic well-being. They are improving quality-
price ratio of goods and services and increasing incomes from growing and more efficient market
production.

INPUTS: OUTPUTS:

PRODUCTION PROCESS
Saleable goods and
Property
services
Machinery TRANSFORMATION
Labor
Valuable information
Raw Materials KNOWLEDGE
GATHERING &
Consumables
PRESENTATION
There are three main types of production process in use:

 Job production
 Batch production
 Flow production

Job Production Process:

This is the creation of single items (quite often large but not always) by either single
person/operative, or a team of people/operatives. Example, building a car or creating a program
system (like Windows). Each individual product has to be completed before the next product is
started; at any one time, there is only one product being made.

New, small firms often use labor-intensive job production, before they get the chance to expand
and purchase advanced equipment. Job production enables specialized products to be produced
and tends to be motivating for workers because they produce the whole product and take pride in
it.

This production method tends to result in high unit costs, often takes long time to complete, and
is usually labor intensive. The labor force needs to be highly skilled and this is not always easy
to achieve.

Some of the benefits of job production are:

 The job is a unique product, which exactly matches the requirement of the customer,
often from as early as the design stage. Therefore it tends to be specific to a customer’s
order and not in anticipation of a sale.
 As the work is specified to the production unit itself, supervision and inspection of the
work at various stages of completion is relatively simple and straightforward.
 Some of the specifications or details involved in the job can change during the time taken
by the manufacturing process dependent upon the customer’s inspection to meet his or
her changing needs.
 Working on a single unit job, coping with a variety of tasks and being part of a small
team working towards the same aim would provide employees with a greater level of
satisfaction.
The Batch Production Process:

This refers to producing a specific group of components, which then go through a production
process together. As one batch is finished, they then start the next stage of production.

Batches are continually processed through each machine step before moving on to the next
operation. This method is sometimes referred to as intermittent or staged production as different
job types are held as work-in-progress between the various stages of production.

It allows firms to use division of labor in the production process and it enables economies of
scale if the batch is large enough. It is usually employed by industries where demand is for
batches of identical products.

The benefits of batch production are:

 It is particularly suitable for a wide range of almost similar goods , which can use the
same machinery on different settings. Example, batches of letters can be sent out to
customers of an insurance company.
 It economizes upon the range of machinery needed and reduces the need for a flexible
workforce.
 Units can respond quickly to customer orders by moving buffers stocks of work-in-
progress or partly completed products through the final production stages.
 It makes possible economies of scale in techniques of production, bulk purchasing and
areas of organization.
 It makes costing easy and provides a better service for management information systems.

The drawbacks are that batch production tends to have high levels of work-in-progress stocks at
each stage at the production process. The work may be boring and demotivating for the workers.

There is an often need to clean and adjust machinery after each batch has passed through.
The Flow Production Process

This process is described as intermittent production and is characterized by irregularity. If the

rest period in batch production disappeared it would then become flow production.

It is therefore a continuous process of parts and sub-assemblies passing on from one stage to
another until completion. Units are worked upon I each operation and then passed straight on to
the next work stage without waiting for the batch to be completed. This is to make sure the
production line can work smoothly each operation must be of standard lengths and there should
be no movements or leakages from the line.

Flow production is capable of producing large quantities of output in a relatively short time and
so it suites industries where demand for a product is high and consistent. It suites the production
of large numbers of a standardized item that only requires minimal alterations.

Flow production can be successful only when there is continuity of demand.

Some of the benefits of flow production are:

 Ease of using just-in-time techniques to eliminate waste and minimize costs.

 Labor and other production costs will be reduced through detailed planning and the use of
robotics and automation
 Deviations in the line can quickly be spotted through ongoing quality control techniques.
 As there is o rest between operations, work-in-progress levels can be kept low.
 The need for storage space is minimal.
 The physical handling of items is minimal.
 Investment in raw materials and parts are quickly converted into sales.
 Control is easy.

The main disadvantage is the high initial-set up cost. Capital intensive, high technology
production lines are going to cost a great deal of money.

In addition, work involved tends to be boring ,demovating and repetitive.

 OPERATION PROCESS

Operation processes transform inputs to outputs. Inputs are things like raw materials, labor,
equipment, information and money. Outputs are products or services, as well as the level of
customer satisfaction people have after they’ve purchased from you.

Expansion-opening of other Location-easily available to

branches selling similar attain and process the raw
products that are easily materials and also
available to the market distributing to the market

Efficiency-the Planning-processing,
OPERATIONS marketing and
products are produced
distributive strategies
in time and of high
quality.

Customers-buy what they

Innovation-Introducing
need, affordable prices and
new ideas and methods.
the products should be easily
available.
Operations are also ongoing activities that a business is involved in. it is important that these
operations are controlled effectively to make sure that managers achieve desired objectives.

Components of operation processes are:

 Purchasing all the required raw materials and the equipments required.
 The managing of the materials and equipment, ensuring that they are in good conditions
and ensuring that they arrive on time.
 Ensuring that the work force is skilled in handling and controlling the machinery and the
production of the products.
 Ensuring that the products being processed are of high quality .
 Ensure customer satisfaction.