Saturday, 7 November 2015

Production Process and different types of production process

We have learnt that Production is one major economic activity employing land, labour, capital and entrepreneurship as its factors for achieving the production targets.

Now, what is production process? Let us understand how production takes place and what are the processes involved in production activity.

What is Production Process?
Production process can be defined as any kind of activity involved in the transforming of the inputs into outputs. It is the act of manufacturing or producing some output of economical value to meet the demands and needs of customers and consumers employing the various processes or techniques available.

  • Production process involves employing different kinds of tools that are known as transforming resources for achieving the production. Land, building, labour or manpower, machinery and managerial skills- all these are examples of transforming resources. They transform the inputs into end products.
  • Similarly, production process involves employing another kind of resource known as ingredients or inputs for achieving the production. These ingredients are known as transformed resources. For example, if it is a cement production process, the ingredients used are limestone, gypsum and ash which get transformed into cement.

Now, coming to different types or kinds of production processes, each process can be identified and classified based on many different sets of features.

A. Classification of production process based on the volume of production | type of market
This classification identifies the following types of production processes that can be chosen by you according to your feasibility to target specific customers and volume.

  1. Mass production process: In this process, the production is done in large scales employing extensive machinery and automated processes and it is not limited to any particular demands or orders placed by customers. You are able to produce different varieties and qualities of output on large scales, as most of the work is automated and there is continuous supply of inputs to achieve the output with the help of supervisors and technical teams streamlining all activities of production. This is also known as Flow Production Process. There will be different sections or departments of production staff overlooking and streamlining the activities from one stage of production to another stage of production, till the output is complete in all respects and put into the market for sale.
  2. Job production process: Job production involves taking orders from customers and producing the goods according to those job orders. It may include taking orders from different customers for different items or taking orders for a specific item of production. But, you will be producing only so much quantity as is ordered by the buyer or customer. For example, one hundred cupcakes for a wedding ceremony or four kinds of sweet dishes, 50 pieces each, for a birthday party.
  3. Batch production process: In this process of production, goods are produced in batches in a sequence according to your own set goals. If your target is to produce 4 kinds of items, each numbering 100 units, then, you will produce them one by one. First you will produce 100 units of item no.1, then 100 units of item no.2 and so on. Your attention will be concentrated on each item till it is produced completely. So, your machines and workforce are fully employed on each item of good till it is completed.
  4. Just-in-time production process: Just-in-time process involves producing goods or services as and when they are actually required. It may be similar to job production process. But, not exactly same. Job production is directly linked with your customers, whereas, just-in-time is related with demands or orders placed by your agents and retailers.

B. Another classification of Production processes based on the nature of functions performed
Production process can be classified according to the nature of function or activity involved in it. So this classification identifies production process either as manufacturing process, or administrative process, or selling and distribution process or as marketing process.

Manufacturing process
All activities directly related with the production of output are identified into manufacturing process.
For example, if you are producing bread, the activities of making sponge with wheat flour, then fermenting it and mixing the flour to make dough and baking the bread in oven to make the final product- all these functions are known as the manufacturing process of the bread.

Administrative process
Administrative process includes the procurement of raw materials and tools for preparing the bread, the planning of resources including finances for running the business and management functions, etc.

Selling and Distribution process
The actual selling functions including storage in godowns or selling outlets involving distribution of the finished products to the selling points and other related selling functions are all to be cited as features of selling process.

Marketing process
Marketing process involves locating the market for goods by identifying more profitable markets through surveys and analysis reports; promoting sales through advertisement and publicity; promoting the brand image of the product and the company and promoting the shares of the company, etc.

No comments:

Post a Comment