This article is about job production. There are several different ways in which goods and services can be produced. The typical production methods in the modern business include:
- Job production.
- Batch production.
- Mass production (flow production).
- Mass customization.
- Cell production.
What is job production?
Job production means producing individual one-off items one at a time especially designed for the customer. Each individual item should be completed before the next product is started. Thus, at any one time, there is only one product being made. The business will create a customized tailor-made product that meets the specific requirements of the customer from start to finish.
Main product features: Production of a special personalized product made to a specific order. Single one-off unique item either small or large or small number of goods built to specific order requirements. Personalized service to individual taste with high prices and personal promotion strategies.
Suitability: New and smaller businesses that sell highly specialized customizable products often use job production before expanding into more capital-intensive firms. It is also suitable for small-scale businesses involving little or no technology,
Examples of products: Container ship, designer dress, wedding ring, made-to-measure suits, the Yangtze dam in China, designer bridal outfit, designer kitchen, bridge, office building, old master oil painting, hair dressers, plumbing services, architectural projects, wedding dress, Hollywood movie, music composition, private dance lesson, haircut, custom-made cars with individualized accessories, personalized wedding cake.
Level of demand: It may be a one-time job to produce a single item to suit customer’s particular requirements. The irregularity of orders means that demand is unpredictable.
Essential requirements: Involves having highly skilled workforce producing one-off items to customers’ specifications.
Set-up time: There is a long set-up time as there is a new set-up for every new job. The job takes a long time to complete.
Cost per unit: Very high unit cost due to expensive production process with few economies of scale.
Capital (machinery): This can be flexible depending on specific use. Job production covers a whole range of tasks from small jobs involving little or no technology (e.g. private tutor or hairdresser) to complex jobs involving high technology (e.g. construction of a hotel, theme park or bridge). Therefore, it may need specialized equipment and highly skilled workers.
Labor (workers): Job production is very labor intensive and highly skilled craft workers are needed to complete the order. Labor costs in skills and time tend to be high, training costs are high and there are smaller numbers of applicants to choose from when recruiting. But, it can be highly motivating for workers as they feel personally involved in the final product. The job can be done either by one person or by a group of workers.
Production time: Production takes a long time and is time consuming because each order is customized according to customer’s specific requirements. It requires clear objectives and planning as well as consultation before, during and after production. Production management more complicated because there is no ‘blueprint’ hence route is based on each product specification.
Stock: Low quantities of raw materials need to be stocked. There will be high amount of work in progress and low amount of finished goods. Not much storage required.
Quantity produced: A unique individual product designed to individual taste.
Quality: Associated with the highest end of the market with emphasis on high quality and originality from start to finish. Premium prices are charged for it.
Advantages of job production:
- High-quality products. Job production allows for a high degree of control over the production process, which can lead to unique high-quality products. This is because each product is made individually and can be inspected for defects before it is shipped. Uniqueness of the product not only helps to maintain staff motivation, but adds value to the production process. The exclusivity can also act as a Unique Selling Point (USP) for the business and helps to secure a premium price for the finished product.
- Can be used to produce custom-made products. Job production is well-suited for producing custom-made products, as it allows for a high degree of flexibility in the production process. This means that products can be made to the exact specifications of the customer. Clients get exactly what they want, hence the firm can charge a higher price due to the uniqueness of the product earning higher mark-up.
- More flexible than any other production method. Flexibility during the planning stages is possible as each product’s design and specifications can be altered (even when the work has already begun) according to the customer’s requests. The customization of job production creates a variety of choice for the customer that cannot be met by other methods of production providing major marketing benefits for a business.
- Less susceptible to obsolescence. Job production is less susceptible to obsolescence than other production methods, as it does not require the same level of standardization. This means that products can be produced for a longer period of time without the need to invest in new machinery and equipment.
- Can be used to produce products in small quantities. Job production can be used to produce products in small quantities, as it does not require the same level of economies of scale as other production methods. This makes it a good option for companies that produce a wide variety of products or that have a limited customer base. These businesses will be able to undertake specialist projects or jobs, often with high value added.
- High levels of worker motivation. Job production ends to be motivating for workers, because they produce the whole product through from start to finish, and can take pride in their work. Workers can feel proud of the finished project as highly skilled labor is used. Varied work for the workers avoids employees’ boredom and hence increased job satisfaction. Team spirit can also be a motivating factor.
Disadvantages of job production:
- High cost per unit. Job production typically has a high production cost per unit, as it requires a high level of skilled labor and specialized equipment. This is because each product is very time consuming – made individually due to the varying requirements of customers and requires a significant amount of attention.
- No benefit of economies of scale. This is due to low volume. Few economies of scale can be enjoyed as each good or service is likely to be very unique. Economies of scale are not possible, often resulting in a more expensive product. Additionally, job production uses skilled labor rather than machinery, so selling prices are usually higher.
- Longer lead times. Job production typically has longer lead times than other production methods, as it requires a significant amount of time to plan and execute each production order. A wide range of tools and equipment is needed, especially if special materials or tools are required to fulfill the order. This can be a disadvantage for companies that need to produce products quickly or that have a high demand for their products. It is usually difficult and impractical to speed up production as quality standards may fall.
- Limited flexibility in production scheduling. Job production has limited flexibility in production scheduling, as it is difficult to change the production schedule once a production order has been started. This can be a disadvantage for companies that need to be able to respond quickly to changes in demand or product design. There is likely to be a relatively long working capital cycle as the production time from start to selling is usually long.
- Requires a high level of skilled labor. Job production tends to be labor-intensive and is therefore a relatively expensive production method. It requires a high level of skilled labor, as each product is made individually and requires a significant amount of expertise. As labor accounts for the largest share of costs in most firms, the final price charged reflects the high costs of production. This can be a challenge for companies that are located in areas with a limited pool of skilled labor.
Case Study 1: Aston Martin cars individually produced for the needs of each customer, therefore very expensive. Job production is slow but, rewarding for the workers involved. Each engine is handmade and has the engineer’s name on it.
Case Study 2: The construction of the Millau viaduct in the southeast of France, the highest bridge in the world, cost almost US$550,000,000 and required more than 350,000 tons of concrete and 40,000 tons of steel. It was assembled with the precision of a Swiss watch with the design of which was the work of the prestigious British architect.
TIP: As job production is usually labor intensive, most finances are spent on wages and other financial benefits for workers.
