Summary GCSE (9-1) AQA Business Studies- SECTION 3 BUSINESS OPERATIONS

Section 3-Business operations
Production Processes
An important area of a business is operations. This functional area is in charge of taking inputs
and turning them into outputs. This is known as the production process.

Methods of production
Job production

Job production occurs when a business produces products that meet the specific
requirements of the customer. Each time a new product is made, changes may need to be
made to the production process. Some examples of job production may include made-to-
measure clothes, handmade crafts and bridges.

Some advantages of job production:

 the business may be able to charge a higher price for the product
 products are likely to be high quality
 the variety of work may mean employees are less likely to become bored and
demotivated at work
Some disadvantages of job production:

 expensive to produce as each product is different
 employees need to be skilled and may require training
Flow production

Flow production occurs when a business makes large numbers of identical products on a
continuous production line. Some of examples of flow production include chocolate bars,
televisions and bottled drinks.

Advantages of flow production:

 the business is able to produce large volumes of products
 employees can specialise in a small number of tasks. This is also known as division of
labour
 producing in large quantities reduces the cost per unit
Disadvantages of flow production:

 High initial costs of machinery to set up the business
 A lack of flexibility, as all products need to be identical or fairly similar
 Employees may become bored or demotivated due to their limited range of tasks
 Large investment into things like expensive machinery leads to increased risks

, Efficiency in production
Efficiency measures how well a business uses its resources to make its products or provide its
service. The lower the amount of inputs needed, the more efficient the business is. Efficiency
can be measured using cost per unit.

The efficiency of a business will depend on:

 employee motivation
 the skills of the managers
 the quality of the suppliers
 investment in technology
 how the products are made

Lean Production
One way a business can become more efficient is through lean production. This aims to reduce
waste during the production process. This waste includes:

 throwing away products that haven’t been sold
 time employees waste not working due to delays in production
 faulty products that have to be re-made
 stock that is damaged or stolen
 holding too much stock that costs money to be stored
Two key lean production techniques are kaizen and just-in-time production.

Kaizen means ‘continuous improvement’ and makes all employees responsible for suggesting
ways that the business can improve the production process.

This is usually done every day, in teams and employees are encouraged to think about the day
before and how things could have been done better.


Lean production and employees
For lean production to be successful, the employees of the business are very important.

 Any industrial action such as strikes could be very damaging if a business is using just-
in-time production as there will be no spare stock.
 For kaizen to work, employees need to be motivated and committed to improving the
business.
 To avoid waste, employees need to be trained to check quality at every stage of the
process and to send work back if it is faulty.
 Managers and employees need to work together to ensure lean production methods
are carried out correctly.