For example, a hospital converts the knowledge and skills of its medical personnel, along with equipment and supplies from a variety of sources, into health care services for patients. But the production process in a service company involves a less obvious conversion. Harley-Davidson, for instance, converts steel, rubber, paint, and other inputs into motorcycles. In a manufacturing company, the inputs, the production process, and the final outputs are usually obvious. Converting Inputs to OutputsĪs previously stated, production involves converting inputs (natural resources, raw materials, human resources, capital) into outputs (products or services). The differences between mass production, mass customization, and customization are summarized in Exhibit 10.5. Real estate agents may develop a customized service plan for each customer based on the type of house the person is selling or wants to buy. Doctors, for instance, must consider the illnesses and circumstances of each individual patient before developing a customized treatment plan. Some types of service businesses also deliver customized services. Uniform standardized production to a point, then unique features added to each productĮach product or service produced according to individual customer requirementsĮxamples: Breakfast cereals, soft drinks, and computer keyboardsĮxamples: Dell Computers, tract homes, and Taylor Made golf clubsĮxamples: Custom homes, legal services, and haircuts ![]() A manufacturing firm that produces goods in response to customer orders is called a job shop. Each print job varies in quantity, type of printing process, binding, color of ink, and type of paper. For example, a print shop may handle a variety of projects, including newsletters, brochures, stationery, and reports. Unlike mass customization, each product or service produced is unique. In customization, the firm produces goods or services one at a time according to the specific needs or wants of individual customers. Using mass-production techniques, they are then added to each frame.Ĭustomization is the opposite of mass production. The basic frames in the furniture are the same, but automated cutting machinery precuts the color and type of leather ordered by each customer. For example, American Leather, a Dallas-based furniture manufacturer, uses mass customization to produce couches and chairs to customer specifications within 30 days. At that point, the product or service is custom-tailored to the needs or desires of individual customers. In mass customization, goods are produced using mass-production techniques, but only up to a point. As a result, the number of assembly stations in most automobile manufacturing plants has increased. Automobile manufacturers, for example, must now incorporate more sophisticated electronics into their car designs. As products became more complicated to produce, mass production also became more complex. The emphasis in mass production is on keeping manufacturing costs low by producing uniform products using repetitive and standardized processes. ![]() Canned goods, over-the-counter drugs, and household appliances are other examples of goods that are mass-produced. If you wanted a car in any color except black, you were out of luck. Each car turned out by Ford’s factory was identical, right down to its color. Henry Ford’s Model-T automobile is a good example of early mass production. Mass production, manufacturing many identical goods at once, was a product of the Industrial Revolution. In addition to production type, operations managers also classify production processes in two ways: (1) how inputs are converted into outputs and (2) the timing of the process. ![]() In general, there are three types of production: mass production, mass customization, and customization. An important consideration is the type of good or service being produced, because different goods may require different production processes. In production planning, the first decision involves which type of production process-the way a good or service is created-best fits with company goals and customer demand.
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