For instance, a restaurant preparing gourmet meals, a physician performing surgical procedures, and an advertising agency developing ad campaigns for business clients all customize their services to suit each customer. Job shops are examples of firms using an intermittent process.Īlthough some service companies use continuous processes, most service firms rely on intermittent processes.
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This process is best for low-volume, high-variety products such as those produced by mass customization or customization. Machines are shut down to change them to make different products at different times. In an intermittent process, short production runs are used to make batches of different products. Machinery, raw materials, plant, workers, managersįinished products for consumers and other firmsįood, cooking equipment, servers, chefs, dishwashers, host, patrons, furniture, fixtures Merchandise, building, clerks, supervisors, store fixtures, shopping carts, customersįaculty, curriculum, buildings, classrooms, library, auditorium, gymnasium, students, staff, supplies Pilots, flight attendants, reservations system, ticketing agents, customers, airplanes, maintenance crews, ground facilities Per-unit costs are low, and production is easy to schedule. Your local electric company is an example. Some services also use a continuous process. This is best for high-volume, low-variety products with standardized parts, such as nails, glass, and paper. A continuous process uses long production runs that may last days, weeks, or months without equipment shutdowns. For example, a tax preparation service combines the knowledge of the tax preparer with the client’s information about personal finances in order to complete the tax return.Ī second consideration in choosing a production process is timing. In services, customers may play a role in the transformation process. Steel manufacturers use heat to transform iron and other materials into steel. An airplane, for example, is created by assembling thousands of parts, which are its raw material inputs. The basic inputs, like natural resources, raw materials, or human resources, are either combined to create the output or transformed into the output. The assembly process is just the opposite. For instance, bauxite (the input) is processed to extract aluminum (the output). In process manufacturing, the basic inputs (natural resources, raw materials) are broken down into one or more outputs (products). There are two basic processes for converting inputs into outputs. (Figure) provides examples of the inputs and outputs used by various other businesses. 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. A manufacturing firm that produces goods in response to customer orders is called a job shop.Īs previously stated, production involves converting inputs (natural resources, raw materials, human resources, capital) into outputs (products or services). 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.
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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.