Business Operations (Edexcel GCSE Business)

Revision Note

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Written by: Lisa Eades

Reviewed by: Steve Vorster

Different Types of Production Processes

Production is the transformation of resources (e.g. raw materials components and processes) into finished goods or services
- Goods are physical products, such as bicycles and T-shirts
- Services are non-physical items such as hairdressing, tourism and manicures
Businesses can organise their production processes in a variety of ways

The main methods of production

The method of production used by a business will depend upon a number of factors
- The level of output required to be produced
- The nature of the product
- Whether the product is standardised or customised
- The level of automation used in production

Assessing Methods of Production

Method	Explanation	Advantages	Disadvantages
Job Production	Manufacturers produce one product at a time as ordered by the customer	High quality product Motivated and highly skilled workers Customised products can be produced	Production is slow Labour costs are high
Flow Production	Continuous manufacturing of standardised products, usually on a production line	Low unit costs due to economies of scale Rapid production Usually highly automated (capital intensive)	Customisation is difficult Capital equipment can be expensive to purchase
Batch Production	Groups of the same product are produced as a batch e.g. 1000 Blueberry muffins	Workers can specialise Production can take place as the previous 'batch' starts running out	Requires careful coordination to avoid shortages Money is tied up in stock Completed products need to be stored

Worked Example

Blush Cosmetics uses batch production to make its range of soaps and bath bombs, with a variety of unique ingredients and scents. The business sells its products in its own high street store and online and has recently started supplying its products in small quantities to a chain of exclusive hotels.

Explain one likely reason why Blush Cosmetics chooses to use batch production.

(4 marks)

Step 1: Identify a reason for the business to use batch production

One reason for Blush Cosmetics to use batch production is that it allows groups of products with varied ingredients to be manufactured. (1 mark)

Step 2: Include a reference to the business scenario

Blush cosmetics sells a range of bath bombs and soaps which have different fragrances, colours and ingredients. (1 mark)

Step 3: Develop the reason using a connective

Blush Cosmetics needs to produce significant quantities of output to meet increasing demand and batch production, as well as providing the opportunity to change ingredients between batches (1 mark), can allow quite large quantities to be produced for their high street and online stores (1 mark).

Using batch production can allow Blush Cosmetics to produce smaller quantities of unique products for the exclusive hotel customer (1 mark), meeting their specific needs (1 mark).

Examiner Tips and Tricks

Carefully consider the needs of the customers to which a business sells when recommending a suitable method of production. Where the selling price is a key driver of consumer demand, flow production (where unit costs are minimised) is likely to be very suitable. Where demand is driven by quality or where customisation is required, job or batch production are likely to be better choices.

The Impact of Technology on Production

During production, businesses are always attempting to balance the cost with
- Improvements to productivity
- Improvements in quality
- The ability to gain more flexibility in production
Flexibility in production refers to how easy it is to install machinery and switch to different machinery which is required to manufacture different products (known as retooling)
New technology is revolutionising flexibility in production and one example of this is the increased use of 3D printers
- The digital design is uploaded and the printer produces the product with minimal labour costs
- Digital printers have been used to print car engines, houses, food and more!

The Impact of New Technology on Production

Impact	Explanation
Cost	Traditional manufacturing processes require expensive tooling and machinery, which can be a significant upfront cost for small businesses With 3D printing, the cost of manufacturing is reduced as there is no need for expensive tooling
Productivity	With traditional manufacturing, there are often long lead times for tooling and set-up, which can delay the production process With 3D printing, products can be produced quickly and easily, with minimal lead times This allows businesses to bring new products to market faster and respond more quickly to changing customer preferences
Quality	Traditional manufacturing may find it difficult to produce complex or intricate designs resulting in variable quality 3D printing allows for precise and accurate production of complex shapes and designs, resulting in higher quality products
Flexibility	With 3D printing products can easily be customised to meet the specific needs of customers 3D printing allows for small production runs which reduces the costs of a specific job production

Last updated: 21 October 2024

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