4.1.4 Production Methods
The Strategic Choice: Job, Batch, Flow, or Mass Customisation?
The Boardroom Brief
You are the Operations Director. Every production method has trade-offs between Volume, Flexibility, Cost, and Quality.
Your decisions will determine profitability, customer satisfaction, and competitive position.
Theory DeckThe Four Production Methods
1. Job Production
One-off, unique items made to customer specification.
Examples: Wedding dress, bridge, custom software
Pros: High quality, meets exact needs, premium price
Cons: Slow, expensive, skilled labour needed
2. Batch Production
Groups of identical items produced together.
Examples: Bakery loaves, clothing sizes, pharmaceuticals
Pros: Flexible, economies of scale within batch
Cons: Downtime between batches, inventory costs
3. Flow Production
Continuous stream of identical products, 24/7.
Examples: Cars, cola bottling, oil refining
Pros: Massive volume, lowest unit cost, consistent quality
Cons: Inflexible, boring work, high setup cost
4. Mass Customisation
Flow efficiency + Job personalisation.
Examples: Dell computers, Nike By You, Spotify playlists
Pros: Customer choice at scale, premium price
Cons: Complex IT systems, higher costs than pure flow
The Strategic Rule:
Match the method to Product Type (Unique vs Standardised) and Order Volume (One-off vs Mass Market).
War RoomSimulation 1: The Production Line Game
You receive TWO different orders. Choose the production method wisely.
War RoomSimulation 2: The Switching Costs Dilemma
Current Situation: Artisan Bakery
You run a batch production bakery. Every morning: 100 white loaves, then clean ovens, then 100 brown loaves, then 50 custom cakes.
Revenue: $15,000/week
Profit Margin: 25%
Downtime: 2 hours/day (cleaning between batches)
The Opportunity
A supplier offers a Conveyor Belt Oven System (Flow Production). Output increases 300%, unit costs drop 40%.
Investment: $1,000,000
Payback Period: 3 years
Trade-off: Can only make ONE product type (white bread). Cannot switch to brown bread or custom cakes.
What is your decision?
War RoomSimulation 3: Mass Customisation Builder
The Innovation: Nike By You
Base sneaker = Flow Production (1,000 units/day, $30 cost). Customer adds custom options = Job Production personalisation. Final price: $120 (vs $80 standard).
Build Your Custom Sneaker
Your Custom Sneaker:
Base Color:
white
Lace Color:
white
Sole Type:
Standard
Custom Text:
None
vs $80 for standard flow-only model
The Mass Customisation Model:
Flow Foundation: Base sneaker produced at scale (low cost)
Job Personalisation: Customer selects options (premium price)
Technology: IT system links customer choice → production line
Result: Efficiency of Flow + Differentiation of Job = Competitive Advantage
Strategic Summary: Choosing Production Method
The Examiner Expects:
Context Matters: A luxury hotel uses job (bespoke service). A budget airline uses flow (standardised routes). Neither is "wrong" - they match their market positioning.
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