HL OPERATIONS MANAGEMENT
IB BUSINESS & MANAGEMENT
COURSE COMPANION: P228
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
structures by creating a
matrix or project
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
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
reducing costs of production
Features of Lean Production
Other features of lean production are
(continual improvements) of
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
It is easy to halt production in a cell compared with an
So if there is a quality problem it can be
quickly and without affecting other parts of the
As the team is working together with all the materials
close at hand, there is less distance for the
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.
As Herzberg noted (1957) responsibility can be a
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.
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.
Reengineering a Business
This is where a company completely reworks
itself by not only changing the production
process, but also the organization of the
A fashionable management tool of the 1990s
business reengineering feel out of favor as the
sheer difficulty of the task became apparent.
Changing Production may have implications for
the business in a variety of areas.
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
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.
Changing production will have an impact on
stock control, which itself will affect costs.
Changes may take time and could interrupt
Any change will need financing whether it is
short term or for significant developments
that may require major long term funding.
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
The Target Market
: is the business producing
volume durable consumer goods?
The State of Existing Technology:
which can limit
how flexible production can be
The availability of Resources:
working capital, and human capital.
: waste emissions,
working conditions or quality standards.
BUSINESSES THAT USE MORE THAN
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.
BUSINESSES THAT USE MORE THAN
Businesses that combine methods hope to reap
the advantages of each different model and make
the business more productively efficient.
: 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
Or Apple might produce the popular iPod classic
Video and batches of “Nanos” and also special
orders of luxury gold plated $23,000 models.
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
Similarly, flow production can be automated
while the use of cellular production can help
Project teams can make sure that the business
keeps ahead of the