Apply 3 Stages of Production concept to either a company or

Apply 3 Stages of Production concept to either a company, or a major industry. Describe, qualitatively), how these concepts would come into play in making production volume, hiring, and any other key business decisions in this organization: no real data needed

Solution

Production process
The production process is concerned with transforming a range of inputs into those outputs that are required by the market.
This involves two main sets of resources - the transforming resources, and the transformed resources.
The transforming resources include the buildings, machinery, computers, and people that carry out the transforming processes. The transformed resources are the raw materials and components that are transformed into end products.
Any production process involves a series of links in a production chain. At each stage value is added in the course of production. Adding value involves making a product more desirable to a consumer so that they will pay more for it. Adding value therefore is not just about manufacturing, but includes the marketing process including advertising, promotion and distribution that make the final product more desirable.
It is very important for businesses to identify the processes that add value, so that they can enhance these processes to the ongoing benefit of the business.
Production is a process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output). It is the act of creating output, a good or service which has value and contributes to the utility of individuals. In order to understand the origin of the economic well-being we must understand these three production processes. All of them produce commodities which have value and contribute to well-being of individuals.

The satisfaction of needs originates from the use of the goods and services which are produced. The need satisfaction increases when the quality-price-ratio of the goods and services improves and more satisfaction is achieved at less cost. Improving the quality-price-ratio of goods and services is to a producer an essential way to enhance the production performance but this kind of gains distributed to customers cannot be measured with production data.

Economic well-being also increases due to the growth of incomes that are gained from the growing and more efficient market production. Market production is the only production form which creates and distributes incomes to stakeholders. Public production and household production are financed by the incomes generated in market production. Thus market production has a double role in creating well-being.
Basically a production chain is the steps that need to be taken in order to transform raw materials into goods which can then be used by consumers such as you and me. For instance, a primary product might be an apple and some wheat, and the chain of production will turn this into an apple pie for you to enjoy.

At each step in the production chain, value is added to the product so it can be sold for a greater amount when it becomes the final product. This value is added through the addition of labour, buildings, raw materials and/or manufacturing and processing.

A typical production chain would look something like this:

Primary producers are always the first stage in any chain, and the part they play is to produce the raw materials from which the final product will then be created.
The secondary stage of production is when the product itself takes shape in the hands of manufacturing companies. These companies bring together products and other raw materials to create the final product.
The last and final stage in each production chain is the actual selling of the product to the consumer. A retailer such as a supermarket will buy a large amount of the final product from the supplier, to then sell on to you, the consumer.
For an example of a production chain in action all we need to do is look at the production of bread:

On wheat farms all around Australia, wheat is grown then harvested by primary producers.
The wheat is then sent to the mill where it is turned into flour, which in turn is either sold locally or overseas.
This flour is then sent to bakeries, which turn the raw product into dough by adding various ingredients such as yeast, salt and grains.
The dough itself is then baked into bread, which can then be sold in either bakeries or supermarkets.

In this way, value is added to the raw product at each step along the way until the final destination is reached, when the consumer is provided with the end product.

Another great example of a production chain is that of furniture production. The steps involved in this chain of production are:

Trees are grown and then harvested.
The logs are taken to a sawmill and cut into serviceable pieces of timber.
These pieces are then seasoned to make them useable in the furniture industry.
The seasoned wood is then used by furniture makers in the construction of pieces of furniture, such as tables and chairs.
This furniture is then sold on to you the consumer.

In both these examples we see that a raw product harvested by primary industry is then taken through various steps of value adding to make the end product for the consumer. The raw product itself has only a limited value to the consumer. Imagine if you went to the furniture store and all they had to sell were logs, and the tools to make furniture. This is why most raw materials have little value to the consumer until they have been through the production chain.

After all these production chain steps, the product then enters the distribution chain. This involves adding value to the products by transporting them to wherever the consumer requires them to be. For instance, even after the wood has been turned into a piece of furniture, it is still of little use to your family until it has been brought close enough to your home for you to see it and purchase it. So one of the last stages in the distribution chain is actually getting the furniture to a store near the end consumer.

There are three main types of process:job, batch and flow production.
Job production
Job or \'make complete\' production is the creation of single items by either one operative or a team of operative\'s e.g. the Humber Bridge or a frigate for the navy.
It is possible for a number of identical units to be produced in parallel under job production, e.g. several frigates of a similar type. Smaller projects can also be seen as a form of job production, e.g. hand knitting a sweater, writing a book, rewiring a house, etc.
Job production is unique in the fact that the project is considered to be a single operation, which requires the complete attention of the operative before he or she passes on to the next job. A good example of job production is the work carried out by Portakabin in creating modular buildings such as offices, which it designs, assembles and maintains for clients. Examples from the service industries include cutting hair, and processing a customers\' order in a store like Argos.
The benefits of job production are:
1. The job is a unique product, which exactly matches the requirements of the customer, often from as early as the design stage. It will therefore tend to be specific to a customer\'s order and not in anticipation of a sale. For example, someone doing a customised spray paint job on a motorcycle will first discuss with a customer the sort of design he would like. A detailed sketch would then be produced on a piece of paper. Once the sketch has been approved the back of the sketch will be chalked over and traced on to the relevant piece of the motorbike. The background work is then sprayed on with an airbrush before the fine detail is painted on. The finished work is then inspected by the customer who will pay for a unique product.
2. As the work is concentrated on a specific unit, supervision and inspection of work are relatively simple.
3. Specifications for the job can change during the course of production depending upon the customer\'s inspection to meet his or her changing needs. For example, when a printing firm like Polestar is asked to produce a catalogue for a grocery chain it is relatively simple to change the prices of some of the goods listed in the catalogue.
4. Working on a single unit job, coping with a variety of tasks and being part of a small team working towards the same aim would provide employees with a greater level of satisfaction. For example, aircrews working for United Airways would treat each flight as a specific job, with passengers requiring individual attention to their specific needs - e.g. for vegetarian dishes, wheelchair access to the flight, etc.
Batch production
The term batch refers to a specific group of components, which go through a production process together. As one batch finishes, the next one starts.
For example on Monday, Machine A produces a type 1 engine part, on Tuesday it produces a type 2 engine part, on Wednesday a type 3 and so on. All engine parts will then go forward to the final assembly of different categories of engine parts.
Batches are continually processed through each machine before moving on to the next operation. This method is sometimes referred to as \'intermittent\' production as different job types are held as work-in-progress between the various stages of production.
The benefits of batch production are:
It is particularly suitable for a wide range of almost similar goods, which can use the same machinery on different settings. For example batches of letters can be sent out to customers of an insurance company.
It economises upon the range of machinery needed and reduces the need for a flexible workforce.
Units can respond quickly to customer orders by moving buffer stocks of work-in-progress or partly completed products through the final production stages.
It makes possible economies of scale in techniques of production, bulk purchasing and areas of organisation.
It makes costing easy and provides a better information service for management.
Flow production
Batch production is described as \'intermittent\' production and is characterised by irregularity. If the rest period in batch production disappeared it would then become flow production. Flow production is therefore a continuous process of parts and sub-assemblies passing on from one stage to another until completion.
Units are worked upon in each operation and then passed straight on to the next work stage without waiting for the batch to be completed. To make sure that the production line can work smoothly each operation must be of standard lengths and there should be no movements or leakages from the line, i.e. hold-ups to work-in-progress.
For flow production to be successful there needs to be a continuity of demand. If demand varied, this could lead to a constant overstocking of finished goods.
Although with modern robotics it is possible to create variations in products being produced through continuous flow techniques, typically such products will be relatively standardised.
Achieving a smooth flow of production requires considerable pre-production planning to make sure that raw materials are purchased and delivered just-in-time, that sufficient labour is employed and that there is continuous attention to quality throughout the production process.
The benefits of flow production are:
-ease of using just-in-time techniques to eliminate waste and minimise costs
-labour and other production costs will be reduced through detailed planning and the use of robotics and automation
-deviations in the line can be quickly spotted through ongoing quality control techniques
as there is no rest between operations, work-in-progress levels can be kept low
-the need for storage space is minimal
-the physical handling of items is minimal
-investment in raw materials and parts are quickly converted into sales
control is easy.