This article is about batch 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 batch production?
Batch production means producing a limited number of identical products in batches. Products in separate groups go through the whole production process together which involves a number of distinct stages. Each batch should be completed before the next batch is started, or each batch passes through one stage of the production process before the batch as the whole moves onto the next stage up to completion. The business will produce a group of identical, or very similar products within in each batch, but products will vary from batch to batch.
Main product features: A limited number of similar products, or a set of identical products. The products in a batch are similar or the same, but different raw materials may be used for different products, hence products may vary from batch to batch. Work can be divided into different operations where each stage is fully completed – pass through each stage together – before moving on to another batch.
Suitability: Small and medium size businesses that make a range of products. Unlike with job production, there is larger demand for batches of identical products.
Examples of products: Metal bashers might make 100,000 of ¾ inch screws then change to 1¼ for the next batch. Tins soup of different flavors such as tomato, chicken or scotch broth, cars with differing colors for each model, series of cookies in different flavors such as chocolate, walnut or butter, cooking meals in batches in hotels that offer buffet dinners, different colors of the same kind of paint.
Level of demand: When the level of demand is frequent and steady, but not exactly known. Estimates of sales volumes will be made and carefully monitored with output adjusted accordingly.
Essential requirements: Involves having flexible labor and machines to switch between making batches of various requirements.
Set-up time: Set-up time can be reasonably fast because a new batch is a modification of an existing process.
Cost per unit: Medium unit cost. Cost per unit is likely to be much lower than with job production, but much higher than with flow production. If batches are small, then unit cost will be high as production has to halted and changed frequently.
Capital (machinery): Batch production typically uses the mixture of general-purpose machines and workers to produce goods to the same specification and no variety in each batch. Work on each batch is fully completed before production switches to another batch using the same staff and machinery. Once a batch has been produced, machinery can be cleaned and adjusted to produce a different batch.
Labor (workers): Batch production requires lots of flexibility, therefore workers must be skilled and flexible. They may need to stop the production of one product, if necessary, and start to work on another more urgent batch.
Production time: Once production is set up, it will be swift, but not continuous. However, switching production takes time while machines are reset.
Stock: Higher stock levels of raw materials than in job production. There will be medium amounts of work in progress and finished goods waiting to be transferred to another stage of production. Batch production requires careful planning to organize scheduling of inputs and channeling of the products.
Quantity produced: A range of goods is produced in batches comprised of small quantities or large quantities of the same product. Market research what to product can replace consultation – products are customized, but using a range of standardized options
Quality: Associated with middle of the market with emphasis on quality, availability and affordability.
Advantages of batch production:
- Lower upfront investment than mass production. Batch production requires a lower upfront investment than mass production, as it does not require the same level of specialized machinery and equipment. A range of products can be made with a single machine reducing investment. This makes it a more viable option for small businesses. However, it does allow for specialization and use of machinery.
- More flexible than mass production. Batch production is more flexible than mass production, as it can be used to produce a wider variety of products. A variety of products can be made in different quantities providing more choices for customers. More choice captures more market share. As a variety of products can be made, customers have more options because batches of products can still be tailored to the needs of individual customers at a relatively low cost. Variety can reduce risks of producing just a single product with limited sales potential. Additionally, the design and composition of batches can be easily altered. This is because batch production does not require the same level of standardization as mass production
- Allows for better quality control. Batch production allows for better quality control, as each batch of products can be tested before it is released. This can help to reduce the number of defects and improve the overall quality of the product. Specialization in the various production processes is likely to lead to increased productivity (output per worker) and better-quality products. It concentrates on skills and it is possible to benefit from specialization of labor.
- Can be used to produce products with a shorter lead time. Batch production can be used to produce products with a shorter lead time than mass production. This is because batch production does not require the same level of setup and changeover time. Also, batch production is faster production with lower unit costs than job production.
- Some economies of scale. Benefits of economies of scale as raw materials and components are bought in larger bulk (purchasing economies) can reduce the unit cost of production by producing larger quantities. Job production allows firms to use division of labor in their production process and it enables some gain from economies of scale if the batch is large enough as machinery can be used to produce larger quantities (technical economies).
Disadvantages of batch production:
- Higher cost per unit than mass production. Batch production typically has a higher cost per unit than mass production. This is because the Fixed Costs (FC) of production, such as the cost of machinery and equipment, are spread over a smaller number of units. If batches are small, then unit costs will remain relatively high.
- Requires more inventory space than mass production. Batch production requires more inventory space than mass production, as it is necessary to store raw materials, work-in-progress, and finished goods. Businesses need to hold large amounts of stock in case of unexpected orders. Large stock levels mean higher storage costs and related costs such as insurance against damage or loss of stock which can increase the costs of production. High levels of stocks at each production stage can be a major challenge for small businesses. Inventory management is important as batch production can result in a high amount of stock.
- Can be more vulnerable to production bottlenecks. Batch production can be more vulnerable to production bottlenecks than mass production. This is because if one machine in a batch production line breaks down, the entire line can be shut down. Additionally, there might be delays due to cleaning and adjusting machinery before the next batch is processed. And simply there is down time when different products are made.
- Can be less efficient than mass production. Batch production can be less efficient than mass production, as it can lead to more downtime and waste. This is because batch production requires more setup and changeover time, and it can be more difficult to automate. A degree of inflexibility exists in batch production because once the production run for a batch has started, it is difficult to switch to or work on another batch. This can therefore cause delays to the overall production process.
- Poorly motivated workforce. Batch production will have lower job satisfaction than job production. As with all systems of division of labor, jobs get repetitive and this can lead to boredom. This might, therefore, reduce motivation and productive efficiency.
Case Study 1: Thai restaurants have a continuous supply of popular staple food such as green curry and Tom Yam soup which is produced in batches.
Case Study 2: The making of pastries and bread in a small bakery is done in batches Bakery makes a batch of bread, then a batch of muffins, then a batch of doughnuts, etc. A small bakery might produce 12 loaves of bread before changing production systems to bake 24 blueberry muffins.
Case Study 3: Ben & Jerry’s ice-creams are produced in batches of different flavors.
Case Study 4: Clothing outlets such as H&M and Gap have their clothes produced in batches of different sizes and colors.
TIP: Some firms produce batches of products using a flow production system before resetting the line and producing a batch of another drink. It is considered to be mass production (flow production) as the individual items move freely through the process without having to wait for others.
