Modern Production Processes

The intended result of all production management activities is a high

level of productivity. P roductivity means that the outputs (goods and ser-

vices) are more valuable than the total of inputs consumed in producing

them. Productivity is increased by producing more goods and services

while using the same number of or fewer inputs. Increases in productiv-

ity typically depend on three factors: standardization of parts and pro-

cesses, specialization of labor, and mechanization of work.

Standardization involves adopting uniform, consistent parts and pro-

cesses in producing a good or service. If an employee always uses the

same type of screw or rivet, time will be saved and skills increased. If,

however, the employee uses a different type of screw or rivet for each

separate operation, time will be wasted looking for the right tools and

parts. Thus, standardization saves both time and costs in the manufac-

ture of many goods today.

The advantages of standardization are highlighted by problems faced

by Electrolux, a Swedish appliance maker. Although there are 325 mil-

lion European consumers, local and regional customs prevent standard-

ization. Northern Europeans want large refrigerators because they shop

once a week. But southern Europeans want small ones because they

shop for fresh produce each day. Northerners want freezers on the bot-

tom, southerners on the top. Britons insist 60 percent of the refrigerator

be devoted to freezer space. In Europe Electrolux is only one of over 100

appliance makers, yet it must produce over 120 basic refrigerator designs

with 1,500 variants. Manufacturing expenses necessitated by the great

variety of designs have depressed Electrolux’s profits for years.

Specialization is an element of job design. It can enhance productiv-

ity. As employees become increasingly skilled at the limited variety of

activities they perform, they can reach high levels of productivity. In ad-

dition to having employees simply repeat a few rather than many activi-

ties, managers of production processes can take other steps. For exam-

ple, they can conduct time-and-motion studies, in which they carefully

observe workers on the job to see exactly what movements they use while

performing a task, such as bending over or “grasping” a tool. By do-

ing this, they discover any repetitive movements or unnecessary “small”

movements. Then they can work to minimize these movements and thus

help employees speed up the performance of their tasks. Another form

of specialization is collaboration with another organization to perform

the work.

All processes may be continuous or intermittent. Continuous pro-

cesses run for long periods of time with few pauses or changes. Chemical

plant, steel mills usually operate around the clock for months with no

essential changes in their production activities. Intermittent processes

operate for shorter period, in batches and are easier to change.

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