IGCSE Business Studies

4.1.1 The Meaning of Production

Learning Outcomes

• Managing resources effectively to produce goods and services

• The difference between production and productivity

• Benefits of increasing efficiency and how to increase it.

• Why businesses hold inventories (stocks)• The concept of lean production;

– how to achieve it– just-in-time inventory control – Kaizen

What Does a Business Do?

The Business

INPUTS OUTPUTS

The overall aim of most businesses is to spend less on their inputs than they earn from their outputs and make a PROFIT

Processes

Starter Challenge – 5 minutesLook at the 2 pictures below and consider the following questions:1.What is the customer buying?2.What was needed to go in to produce that (inputs)?3.What process was required to combine the inputs (transformation)?4.What is the output (end result)?5.What factors does a business need to consider when planning a production process?

PICTURE 1 PICTURE 2

Do you remember the Factors of Production??

Task - Video

• Watch the video ‘Inside a factory’

• What are the factors of production for Cadbury?

• How and why has production changed over time?

Task - Video

• Watch the video ‘An Exclusive look inside Foxconn’s factory’

• What are the key differences between production at Cadbury and Foxconn?

PRODUCTION VS PRODUCTIVITY

Consider this scenario.

FACTORY A -

Employees: 10

Output: 1500

Duration: 1 working week – 5 days

FACTORY B

Employees: 5

Output: 1000

Duration: 1 working week – 5 days

WHICH FACTORY IS MORE PRODUCTIVE?

Productivity Vs Production

Production- The total amount of goods/services produced by a business over a period of time

Productivity – The amount of goods/services produced per unit of input over a period of time

What could ‘unit of input’ mean?

Task – Exam Question

• Work in pairs to perform some calculations on the data. See how many different calculations you could do.

• Individually write an answer for the 12 mark question.

Group Task – Making paper planes

The Rules:- You will have 2 minutes to make as many paper planes as you can-Each plane must be made out of an A5 sheet of paper-No materials can be prepared before the production time starts-Only planes that fly for 3 metres will pass the quality inspection

Reflection – 5 mins thinking time

• How did your group organise your production?• What happened to your productivity, average costs

and profits over the 3 periods of production?• If your results improved over the 3 periods of

production, what do you think caused this?• What problems did your group encounter• In a real life production situation, what can be done

to improve productivity?• Why is increasing efficiency and productivity so

important for businesses?

A house point each for the team with the best answers

Methods of increasing productivity

• Training• Target setting• Better equipment• Automation and technology• Improving production process or methods• Motivation • Performance based pay• Recruitment & selection

Quiz time!

Quiz link

The link has been emailed to you.

A house point for the first person to show me a 10/10 score

LET’S REFLECT….and check our understanding so far.

In pairs and using only one sentence summarise what you have learned about production so far. Enter your answers into SocrativeHouse point for the best answer

Key Terms – do you know their meaning?

• RESOURCES• GOODS• SERVICES• PRODUCTION• PRODUCTIVITY• EFFICIENCY• AUTOMATION• CAPITAL INTENSIVE• LABOUR INTENSIVE• INPUTS• OUTPUTS

So…can you apply what you know to your life!

• For example what resources are needed to get you awake, up out of bed and into school each day?

• Are you making effective use of your resources?• Are you always at your most productive?• Could you be more efficient?

Inventories (stock)

• Watch the video “Stock control and Lean production” and consider the following questions:

1. What are the 3 different types of inventories?2. Why is managing stock important for a business?3. What is ‘Lean Production’?4. What is ‘JIT’?5. What are the Advantages & Disadvantages of JIT?

Case Study

• Toyota & Honda face a problem due to JIT stock control.

• DO YOU THINK JIT PROBLEMS LIKE THIS CAN BE AVOIDED?

• WHAT CONTINGENCY PLANS COULD BUSINESSES HAVE?

Quiz time!

Boards at the ready

Quiz link

Lean Production

• Watch the following videos “four principles of lean management” and “Toyota production system in the news”.

• Consider these questions:1. What is “Lean production”?2. What does the term ‘pull’ mean in the context of

lean?3. What is Kaizen?4. What are some features or methods of lean

production?5. What are the benefits of implementing lean

production?

Quiz time!

Boards at the ready

Quiz link

Homework

• Read Boeing case study and be ready to have class discussion on what Boeing have done to go ‘Lean’ and the benefits these changes have produced.