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Production Process

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Business Studies

We eat biscuits, bread, cake, chocolate, etc all the time in our day-to-day life. Have you ever thought about how such large quantities are supplied in the market where demands are in the tonnes? What is the production process that goes behind producing every single unit of these items? How are the materials procured, planned, and finally produced? Are the quantities produced useful or not? Read on for answers to these questions.

Production process definition

The production process is defined as the process in which the factors of production, i.e. inputs of resources, are turned into beneficial outputs.

Factors of production means capital, labour, technology, land, and other resources that are used to create output, or goods and services.

The factors of production are explained in detail below:

Capital

Capital includes the amount invested in the process of production. Investment can be in terms of monetary investments or assets like machines, vehicles, etc.

Labour

Labour refers to the people involved and the time and efforts that were put into the process.

Technology

The technology that is used, whether the kind of machinery, the programming of machinery, the capacity of machinery, etc.

Land

Natural resources such as land, energy, etc. that are used in the process of production are counted under the category ‘land’.

Examples of the production process

Let's explore the production process with the example of biscuit production. To set up this production process, the company requires a place or land to set up the whole production unit.

Secondly, in the production of biscuits, the organization will need the machines to mix all the necessary ingredients. It will also need an oven to bake the biscuits. In addition, it will need machinery for making the biscuits' packaging and labelling, which will all become capital investment for the company.

The company will also need labour to mix all the ingredients together, separate them into batches of production and different flavours, set the output levels of the machines and temperature of the ovens, decide on the labeling function, and oversee the overall production system.

Another important function and need of the production process is technology to ensure the labels are correct, the names of the product are rightly mentioned, the temperature is set correctly, and all other necessary technical aspects that do not require human intervention.

If all of the above factors of production are in place, the production process of biscuits runs smoothly and can match the requirement of the business and customers.

Production process flow chart

The production process goes through various stages, which can be understood with the help of the flow chart. There are multiple ways to create a production process flow chart, depending on the organization’s need and their production line. The following are generally the basic stages that are involved in most of the production processes. However, these may vary from industry to industry.

  1. Planning: usually the basic requirement of all production processes. This stage helps to define the purpose and how the goals of production can be achieved properly.

  2. Routing: This is the next stage in the production process where the raw materials may be procured, processed, finished, quality checked, and distributed. Decisions are made regarding the quantity and quality of goods and services as well as on the place of production. This is a crucial stage in the production process.

  3. Scheduling: Scheduling means deciding the timings of the production process. For example, how much time should each stage of production involve? How long should each person work on a particular workflow?

  4. Dispatching: This stage is the actual start of the production. It may involve the provision of necessary items, the maintenance of records, the monitoring of workflows as planned, the recording of the number of times a machine works, machine idling time, etc.

  5. Follow-up: Follow-up is the last stage of the production process. Follow-up measures the actual versus the expected productions. Follow-up helps to detect the problems and remove them to help with the smooth functioning of the process.

    Production Processes, Stages of the production process, StudySmarterFigure 1. Stages of the Production Process, StudySmarter

Types of Production Process

The production process can be classified as per the following types depending on the company’s product and the organization’s needs.

Production Process: Mass Production

Mass production means there is continuous production and all employees work continuously to produce the same items at the same time. In this kind of production, the forms and size of the products remain the same and every employee focuses on the same product. All resources are utilized to produce the same range. To make production more efficient and effective, multiple tasks may be carried out at once to get quick results.

If one company is producing only white bread on a huge level, all employees will focus on the white bread packets only. In this process, most employees will be working towards white bread making: preparing the dough, baking, etc. Others will be working on packing the produced loaves of white bread at the same time, to generate the loaves of white bread quickly and efficiently at once.

Production Process: Batch Production

Batch production is similar to mass production. However, the products may be produced in batches. This means that the production may be divided based on product size, colour, form, etc.

We can understand this with the example of T-shirt production. The T-shirt manufacturing company may opt for batch manufacturing, as they would want to manufacture in different sizes from small, medium and large, and also in different colours, say red, blue, green, and yellow. Hence, the team may be divided for every batch on the basis of production of the respective size and colour.

Production Process: Job Production

Job production means the products are produced in a limited quantity and may be specific to customer preferences. Job production is small-scale, and the task of producing an item or product is completed before taking up other jobs.

Production Process: Service Production

This method of production involves rendering services via an automated process, such as technical support for customers.

One example in current business in terms of service production is delivery services. Consumers now have the benefit of ordering goods and services from the comfort of their own homes and receiving them directly at their doorstep due to the sheer amount and scope of delivery services available.

Production Process: Customized Production

Customized production is a process in which goods and services are produced on the basis of the customer's needs. This can be divided into 2 categories:

Craft Production

This category of customised production involves a personal touch based on the specific customer's demand. One of the classic examples of this is designer clothes. Say one dress is specifically designed for a celebrity for a particular award show, on-demand, with a choice of colour and pattern, and customised to the event's theme.

Mass-customised Production

Mass-customised production is similar to craft production. However, the customised selection is produced in mass quantity. The customisation may be on the basis of shape, colour, pattern, product material, etc.

For example, Coca-Cola may have custom 500ml bottles in glass produced in larger quantities according to need. Generally, production processes may share similar factors of production with land, labor, capital, and technology. The process may change relative to demand. The stages of production remain more or less the same from planning to routing, scheduling to dispatching, and finally, follow-up. The types of production, however, may change as per demand for the product and/or the requirements of the organization, in terms of sizes, colour, customisation, etc.

Production Process - Key takeaways

  • The production process is defined as the process in which the ‘factors of production’, i.e. input of resources, are turned into beneficial output.
  • Mass production is when there is continuous production and all employees work to produce the same items at the same time.

  • Batch production is similar to mass production. However, the products may be produced in batches. Therefore the production may be divided by size, color, form, etc.
  • Job production means the products are produced in a limited quantity and may be specific to customers' preferences.

  • The method of service production involves rendering services via an automated process such as technical support given to the customers.
  • Customised production is the process in which goods and services are produced on the basis of the customers' needs.
  • The production process involves the following stages :1. Planning2. Routing3. Scheduling4. Dispatching5. Follow-up

Production Process

The production process is defined as the process in which the ‘Factors of productions’ i.e. inputs of resources are turned into beneficial outputs.

The production process can be classified as per the following types depending on the company’s product and their organization’s need: mass production, batch production, job production, service production and customised production.

An example would be StudySmarter's explanation production.


The explanation that a student is reading goes through many processes before they see the actual output. 


The first and foremost stage is the segregation of subjects and the levels for which the explanation is written. Once the segregation is done, it goes through the approvals. If it is approved, the research is done on the topics to be written. Once the research is complete, labour i.e content creators, reviewers, editors are involved. 


Once this stage is complete, the next step is technology. The explanation is then published on the StudySmarter platform after the corrections are made and if everything is approved and goes as required, the final product (explanation) is out for students to read. 

The production process involves the following stages : 


  1. Planning

  2. Routing

  3. Scheduling 

  4. Dispatching 

  5. Follow up. 

The production process of a company is often outlined in the company's business plan. A business plan comprises all essential aspects of a business and how it functions, including its operations, and therefore the production process.

Final Production Process Quiz

Question

What is flow production?

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Answer

Flow production is a method for producing a large number of identical products.

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Question

What is not a characteristic of flow production?

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Answer

Used for mass production

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Question

What is an assembly line?

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Answer

a series of workers or machines to produce a succession of similar goods.

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Question

What is not an advantage of flow production?

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Answer

Short lead time and low level of inventory

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Question

Why does flow production help achieve economies of flow? 

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Answer

With flow production, a large number of goods can be produced at the same time, which reduces the unit cost. 

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Question

What does a short lead time mean? 

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Answer

A short lead-time means that the product can be delivered more quickly, which improves customer satisfaction.  

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What is the lead time?

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Answer

The time between the initiation and completion of a goods 

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Question

What is the danger of stoppage in flow production?

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Answer

If one stage of work breaks down, the others will stop as well. 

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Question

What type of machines are used for flow production?

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Answer

Specialised machines which perform only one function at each stage. 

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Question

What are the disadvantages of flow production?

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Answer

High set up costs

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Question

Why does flow production require low inventory? 

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Answer

In flow production, the products can be produced quickly. Thus, there's no need to hold a lot of stock. 

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Question

Flow production requires ...

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Answer

Low-skilled labour

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Why do workers in flow production factories tend to feel demotivated? 

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Answer

Because the work is repetitive

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Question

Name 5 products made with flow production 

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Answer

cars, doughnuts, chocolate bars, soft drink bottles, electronic goods

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Question

What is another name for flow production?

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Answer

Mass production

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Question

What is Just-in-time production?

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Answer

Just-in-time (JIT) is a production method where a business only produces what is required to keep the stock level at a minimum. 

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What is the main benefit of Just-in-time production?

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Answer

Reduce inventory costs and waste

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What are the requirements for the JIT system?

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Answer

A highly efficient ordering system. 

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What is the ordering system used in Just-in-time production?

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Answer

Kanban

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What is not an advantage of Just-in-time production?

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Answer

No buffer stock

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Question

With a Just-in-time system, orders are placed in small quantities but more frequently.

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Answer

True

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Question

What does Just-in-time production help to prevent?

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Answer

Customer's cancellation of orders

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Question

What is the company pioneering the technique of Just-in-time production?

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Answer

Toyota

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Question

What is job production?

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Answer

Job production is a production method where only one order is completed at a time. Each order is unique and meets the specific requirements of the customer. 

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Question

What are the characteristics of products made with job production?

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Answer

Unique

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Question

Give some examples of job production

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Answer

An artist drawing portraits of different people. 

An architect creating home plans for different families. 

An aerospace manufacturer making advanced rockets and spacecraft.   

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Question

What is not a feature of job production?

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Answer

Production of one-off, personalised products

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Question

Why does job production bring in more profit for the manufacturer?

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Answer

Because customers are willing to pay more for high-quality and personalised products or services 

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Question

Some job production services require advanced technology while others involve little use of technology or equipment.

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Answer

True

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Question

Give 3 examples of high-tech job production?

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Answer

  • Film production 
  • Spaceship building
  • Military equipment

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Question

Give 3 examples of low-tech job production

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Answer

  • Hairdressers 

  • Dressmaking

  • Painting

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Question

What are the advantages of job production?

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Answer

High-quality products 

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Question

What are the disadvantages of job production to manufacturers? 

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Answer

  • high wages paid to highly skilled workers
  • high investment in time and resources
  • use of specialised machines
  • a lot of calculations before production 

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Question

What are the disadvantages of job production to consumers? 

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Answer

  • Higher fees for personalised items
  • Difficulty to find replacement
  • Longer waiting time

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Question

What kind of firms can undertake a job product project?

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Answer

Usually small firms or a single professional, but some larger companies can undertake job production services as well. 

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Question

What is the opposite to job production?

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Answer

Mass production

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Question

Define labour-intensive activities.

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Answer

Activities that require a high amount of labour for their completion are called labour-intensive activities

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If the cost of labour is higher than other expenses incurred by the business, it is considered a _____________.  

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Answer

labour-intensive activity

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Labour-intensive processes have a _____ fixed cost, and _____ variable cost. 


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Answer

low, high

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Question

State a few examples of labour-intensive activities.

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Answer

Activities in construction, health care, and agriculture sectors are a few examples of labour-intensive activities. 

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Question

What is capital?

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Answer

Capital is the wealth a person or an organisation owns in the form of cash or other assets.

Capital in business can include machinery, buildings, patents, copyrights, stocks, bonds, cash etc owned by a person or the organisation.

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Question

Define capital-intensive activities.

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Answer

Activities that require larger amounts of capital investments in comparison to other activities are called capital-intensive activities

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Question

 Increasing output volumes in capital-intensive activities are costlier due to the cost of machinery and resources needed.  True or False?


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Answer

True

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Question

Industries that operate in a capital-intensive sector need to produce products in large quantities to gain an adequate return on investment. 

True or False?


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Answer

True

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Question

Fixed costs are _____, and variable costs are_____ for capital-intensive activities.

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Answer

high, low

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Question

Name a few examples of capital-intensive activities.

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Answer

Car manufacturing, oil extraction, and steel production are some examples of capital-intensive activities.

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Question

What are a few examples of capital in a business?

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Answer

 Machinery, buildings, patents, copyrights, stocks, bonds, cash etc owned by a person or the organisation are examples of capital in a business.

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Question

________ intensive activities have high entry barriers.

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Answer

Capital

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Question

State the reason causing high entry barriers in capital-intensive businesses.

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Answer

The high entry barriers are caused due to the high amounts of financial resources or the capital required to start such businesses.

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Question

Capital intensive activities can produce a larger number of products as most of the tasks are automated. True or False?

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Answer

True.

Show question

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