Final Production / 4.3 /
Scales of Production
Final Production / 4.3 /
Scales of Production
The scale of production depends on the number of products required. Decisions on the production scale are influenced by the volume or quantities required, the types of materials used to make the products and the type of product being manufactured. There are also considerations of staffing, resources and finance.
Economies of scale are cost advantages that arise from increasing production volume. The more units a manufacturer produces, the cheaper it becomes to produce each unit. Economies of scale work by:
Spreading Fixed Costs: Certain costs remain constant regardless of production volume, like rent, salaries for administration, or equipment depreciation. By producing more units, these fixed costs are spread out over a larger number of items, reducing the cost per unit.
Bulk Discounts: Suppliers often offer lower prices per unit when buying in bulk. A company producing a large volume can leverage this to reduce material costs.
Specialization and Efficiency: Larger production allows for the specialization of labour and processes. Workers become more efficient at specific tasks, and dedicated production lines can streamline operations.
Research and Development: Large companies can invest more in R&D to improve efficiency, develop new technologies, or create innovative products, ultimately lowering production costs.
Diseconomy of Scale can occur when a manufacturer for instance runs into stricter government regulation due to its size of operation. Also raw materials can become more expensive if demand outgrows local supply. Finally, in large, impersonal organizations, workers may feel disconnected and unmotivated. This can lead to decreased productivity and increased absenteeism.
One-off production refers to creating a single, unique or specialist item. In one-off production, a single product is usually designed to a client’s specifications. The product is custom-made or bespoke. An example could be a tailor designing and sewing a one-of-a-kind suit. When one-off products for local communities are created using local materials and traditional crafts this is known as vernacular design.
Batch production involves producing a set quantity of identical items at a time. Another term for this is lot production. In batch production materials are carefully selected for their cost and manufacturing costs are lower than one-off production. An example of this would be garment manufacturing. The quantity can range from a set of 4 cushions made for a specific design to 20,000 jumpers made for a department store. The size of a batch is determined by expected sales and by what a producer is prepared to lose in case a batch needs to be recalled. Food with specific sell-by dates is batch-produced, like cakes or bread.
Small-scale production (one-off or small batch) using manual skills is known as craft production. Often only rudimentary or basic tools, machinery and equipment are used. Products such as wedding dresses, jewellery, ceramics and physical models for industrial design use this scale of production.
Continuous Flow Production or Continuous-flow Manufacturing (CFM) is the uninterrupted production of a high volume of identical units. In CFM a production line is kept running 24 hours a day, seven days a week to maximise production and eliminate the extra costs of starting and stopping the production process. The process is highly automated and few operators are required. An example of CFM could be a bottling plant continuously filling and capping beverage bottles on a conveyor belt.
The terms mass production and continuous flow production are often used interchangeably. Mass production is a specific type of continuous flow production. Mass production also focuses on high-volume, standardized goods, but typically involves:
Assembly lines with specialized tasks for specific trained operators.
Producing large quantities of identical units before potentially switching to a different product.
Producers and manufacturers need to carefully select the most appropriate scale of production based on the following product, cost and market factors:
Product:
Demand: High or consistent demand often favours continuous flow/mass production, while low or unpredictable demand might be better suited for batch or even one-off production.
Complexity: Simple products with few components are ideal for mass production, while intricate products might require more flexibility of batch or one-off production.
Customization: Highly customizable products are often made through one-off or batch production, while standardized products are better suited for mass production.
Production Costs:
Setup Costs: High setup costs for machinery or tooling might favour larger batch sizes or continuous flow to spread the cost over more units.
Inventory Costs: Holding large inventories can be expensive, so batch production helps manage inventory levels for products with fluctuating demand.
Technology Costs: Advanced automation might favor continuous flow/mass production, while less complex products might be produced effectively with simpler tools in batch or one-off settings.
Labour Costs: Specialized skills for operating complex machinery might be needed for mass production, while batch or one-off production might utilize more general crafting skills.
Environmental Impact: Continuous flow can be energy-intensive, while batch or one-off production might offer more flexibility for using sustainable materials or processes.
Market Factors:
Lead Time: Fast turnaround times for products might favour batch or one-off production, while continuous flow can be efficient for readily available products.
Competition: High competition in a saturated market might favour low-cost mass production for standardized goods, while differentiation through customization could suggest batch or one-off production in a niche market.
Depending on the specific context in which a manufacturer operates, these factors will have a different value in the trade-off between different scales of production. There are also emotional factors: A small family business might not want to scale up as it would no longer be a family business ...
Advantages
High Customization
High Quality
Flexibility
Disadvantages
High Cost per Unit
Long Lead Time
Limited Output
Advantages
Moderate Customization
Lower Costs than One-Off
Can Adapt to Demand Fluctuations
Disadvantages
Less Efficient than Continuous Flow
Requires Setup Time Between Batches
Potential for Inventory Issues
Advantages
Lowest Cost per Unit
High Volume Production
Fast Lead Times
Disadvantages
High Initial Investment
Limited Customization Opportunities
Less Flexible for Product Changes
What two scales of production could used to create the products below?
Mass customization is a manufacturing strategy that combines the low unit costs of mass production with the ability to personalize products to a certain degree to meet individual customer needs. It allows companies to offer a wider variety of options without sacrificing efficiency. Mass customisation aims to deliver products that best meet the customers' needs with near-mass production efficiency.
Benefits of mass customization could be:
Increased Customer Satisfaction: Customers get a product closer to their preferences.
Reduced Inventory Costs: Companies don't need to hold a vast stock of pre-made variations.
Differentiation in Competitive Market: Stands out from competitors offering generic products.