HL OPERATIONS MANAGEMENT PRODUCTION METHODS

1. HL OPERATIONS MANAGEMENTPRODUCTION METHODS IB BUSINESS & MANAGEMENT – A COURSE COMPANION: P228-231

2. CELLULAR PRODUCTON • This is a modern attempt to improve mass production techniques by allowing teams of workers to operate as self-contained units as part of the production run. • The ideas have parallels with the move away from tall/flat hierarchical organizational structures by creating a matrix or project-based organizations. • A visit to many modern car assembly plants will show the difference between this approach and more traditional assembly line method inspired by Ford in the 1920s

3. CELLULAR PRODUCTON • Many of the newer industries using modern technologies such as computing, mobile phone, technology or genetic engineering have started off with this type of production. • When cellular production has been combined with other elements of leach production (first developed by Toyota in the 1950s) this has led to greater competitive advantage for many manufacturers. This advantage has been based on the aim of achieving three main aims of: • improving quality • increasing productivity • reducing costs of production

4. Features of Lean Production • Other features of lean production are just in time (JIT) stock control, kan ban supplies of stock and kaizen (continual improvements) of quality management. • Quality improvements will come from the cooperative nature of the team being directly responsible for their own quality checking • This should lead to less wastage and lower rejection rates.

5. ADVANTAGES OF CELLULAR PRODUCTION • It is easy to halt production in a cell compared with an assembly line. • So if there is a quality problem it can be deatl with quickly and without affecting other parts of the production process. • As the team is working together with all the materials close at hand, there is less distance for the work in progress to travel. • By working as part of a close-knit team each worker is given greater responsibility compared with the robotic and repetitive job working on an assembly line.

6. ADVANTAGES OF CELLULAR PRODUCTION • As Herzberg noted (1957) responsibility can be a motivating factor so it can lead to improvements in quantity as well as quality. • “Walking the job” is a technique where workers follow the route a product takes as it passes through the various stages of production. In some case this be quite extensive, but with cellular production and having everything close at hand this represents a major saving for the business in time, energy and money.

7. CHANGING PRODUCTION • Once a business has designed an appropriate production process it can be difficult and costly to change. • At the very least this may involve retooling machines, redeploying human resources and refinancing the new system.

8. CHANGING PRODUCTION Reengineering a Business • This is where a company completely reworks itself by not only changing the production process, but also the organization of the business. • A fashionable management tool of the 1990s business reengineering feel out of favor as the sheer difficulty of the task became apparent.

9. CHANGING PRODUCTION Changing Production may have implications for the business in a variety of areas. Marketing • Production runs can reflect the orientation of a business and so the choice of a product available to the consumer • Distribution will be affected. This may lead to different response times. • Changes in the cost of production can be passed on the consumer by changes in price

10. CHANGING PRODUCTION HRM • HR will need to be carefully managed as workers may have to be redeployed, retrained or every let go. • The role and responsibilities of workers and middle managers requires careful planning.

11. CHANGING PRODUCTION Finance • Changing production will have an impact on stock control, which itself will affect costs. • Changes may take time and could interrupt current production. • Any change will need financing whether it is short term or for significant developments that may require major long term funding.

12. Which method of production is best? There is no one method that is best for business; it will depend on a number of different factors as to which system an organization may prefer. The factor includes: • The Target Market: eg: is the business producing high-volume durable consumer goods? • The State of Existing Technology: which can limit how flexible production can be • The availability of Resources: fixed capital, working capital, and human capital. • Government Regulationseg: waste emissions, working conditions or quality standards.

13. BUSINESSES THAT USE MORE THAN ONE METHOD • Because of the opportunity costs of setting up production processes and the difficulties of changing them, it may not be too much of a surprise that once a business has planned its production, there is a reluctance to change and in many cases, especially with larger businesses, there are many advantages from combining different methods.

14. BUSINESSES THAT USE MORE THAN ONE METHOD • Businesses that combine methods hope to reap the advantages of each different model and make the business more productively efficient. • Eg: A Thai Restaurant might have a continuous supply of a staple food such as green curry, but would produce batches of a less popular dishes and would even be able to make a special order on demand. • Or Apple might produce the popular iPod classic Video and batches of “Nanos” and also special orders of luxury gold plated $23,000 models.

15. How can business control costs when using more than one method? • Businesses can achieve economies of scale from the mass-produced product while satisfying the need for changes in demand for seasonal products. • Similarly, flow production can be automated while the use of cellular production can help motivate workers. • Project teams can make sure that the business keeps ahead of the product innovations.