Marketing - The production method used will have a direct impact on the quality and individuality of the product, implicating the marketing mix according to the product’s position on the customer perception map.

‍HR Management - A change in production methods in response to an increase or decrease in production scale will have a proportional impact on the size and quality of the workforce available.

‍Finance - The purchase of fixed assets required for desired production methods and scale will be scrutinised with investment appraisal techniques to assess whether it is a worthwhile investment for the business.

Ecological Sustainability - Capacity of the natural environment to meet the needs of the current generation without jeopardising the ability of future generations to meet their needs. Being ecologically sustainable will mean adopting a scale and rate of production that will not potentially exhaust, deplete or pollute the earth’s natural resources before future generations.

Social Sustainability - The ability of society to develop in such a way that it meets the social well-being needs of the current and future generations. Social sustainability enables society to optimise the quality of life for people and their descendants.

Economic Sustainability - Practices that support long-term economic growth without negatively impacting social, environmental and cultural aspects of the community. An ideal and sustainable economy is one that provides for the greatest amount of general well-being, with the least amount of resources used and environmental harm.

Brand Image - Businesses will have a competitive advantage with an improved brand image and reputation. Consumers are beginning to support and favour companies that actively support their communities as environmental and social awareness has begun to trend.

‍Reduced Costs - Development of sustainable business practices lends itself to efficiency maximisation and waste reduction that streamlines effort and conserves resources. Efforts like waste management, water reduction and energy conservation will have tangible costs benefits for the business. In addition, the increased efficiency will increase productivity, which leads to higher level and quality of output, thereby lowering the average costs of production.

‍Attract Employees - The rise of environmental and social awareness will attract potential employees and talents to businesses that focus on sustainable practices. The morale of current employees will also benefit, increasing employee retention.

Job Production - Customising an individual product from start to finish, tailor made to meet the specific requirements of the client. Every job is specialised and different from others, with each job having its own operations, being worked on separately from others.

Advantages
‍Quality - Highly skilled and specialised labour is employed for job production services.

‍Flexibility - Each product’s design and specifications can be altered according to the customer’s requests.
‍Uniqueness - Business will be able to charge a premium for customised products.

Disadvantages
‍Long working capital cycle - The production process is generally time consuming due to the varying and specific requirements of customers, as well as the high quality standards to be upheld. Depending on the terms of payment agreed, such as whether payment will be made before or after production is completed, the business may be vulnerable to rising costs of production without sufficient cash inflow.

‍Few economies of scale - A specialised business working on custom orders may face random variations in demand and sales; the irregularity of orders and inability to scale operations will disallow the business from potential economies of scale, such as purchasing economies of scale.

Batch Production - The simultaneous production of a limited number of identical products. Work on each batch is fully completed before production continues to another batch using the same resources and equipment.
‍
Advantages
‍Economies of Scale - Technical economies of scale are enjoyed as there is a high capacity utilisation of machinery to produce large quantities in each batch. Raw materials can also be purchased in bulk to support the large scale of operations, allowing the firm to enjoy purchasing economies of scale.

Reduced Risk - If a flaw is found in the output of a batch, only the items in the batch will be compromised, and the problem can be identified and fixed before further production.

Disadvantages
‍Storage - Batch production will result in large numbers of stock, leading to greater storage costs.

Repetition - A monotonous workflow of a repeated set of instructions for every batch will cause repetitive work that does not motivate workers, increasing the likelihood of slack and level of turnover.

Mass Production - Manufacturing of large quantities of standardised products, often using automation technology. The emphasis in mass production is on keeping manufacturing costs low by producing uniform products using repetitive and standardised processes.

Flow Production - Continuous production process of manufacturing identical and standardised products on an assembly line. Large quantities of the product are constantly produced to maximise the capacity utilisation of equipment.

Advantages
‍Economies of Scale - High capacity utilisation of machinery to support the large scale production will spread fixed production costs over a larger output, lowering the unit production costs. Raw materials can also be purchased in bulk to support the large scale of operations, allowing the firm to enjoy purchasing economies of scale.

Capital Intensive - Flow production uses a high proportion of machinery in relation to workers. The heavy reliance on machinery and automation will reduce the need for unskilled workers and thereby reduce labour costs.

Disadvantages
‍Inflexibility - If a product is found to be below quality standards, the business will have to scrap a large amount of output and halt production until the problem is identified and fixed.

‍Repetition - A monotonous workflow of a repeated set of instructions will cause repetitive work that does not motivate workers, increasing the likelihood of slack and level of turnover.

Cellular Manufacturing - Production process is split into a number of self-contained units, which are completed by teams of employees that are responsible for completing that part of the production process. Once a team, or cell, completes their unit of work, it is then passed on to the next cell in the production process.
‍
Advantages
‍High Quality - Empowerment of every cell will hold employees accountable for the completion of their unit of the production process. This responsibility motivates the cell to take ownership over their work and produce higher quality output.

‍Flexibility - Employees in cellular manufacturing tend to be multi-skilled as a result of job rotation with the different responsibilities held by their cells on every product. This flexibility allows the business to adapt quicker to changes in the business environment.

Disadvantage
‍Conflicting Needs - Cells may require the same machinery and equipment as other cells. At the same time, other equipment may not be used at all depending on the progress of each cell, lowering the capacity utilisation and hence efficiency of the organisation.

Lean Production - Process of streamlining operations and processes to reduce all forms of waste and to achieve greater efficiency. Waste is defined as any activity that does not add value from the customer’s perspective, the removal of which will allow the business to maximise efficiency while cutting the costs of production.

Kaizen focuses on perfecting processes through continuous incremental improvement by eliminating waste. A business adopting the principle of kaizen is expected to encourage workers and managers to constantly find and suggest small and continuous ways to improve work processes and efficiency.
‍
Usually small groups of employees are gathered to identify potential changes to improve the organisation’s products, processes and procedures. The aim is to establish a steady flow of small improvements rather than one-off and/or radical changes.
‍
A key philosophy of kaizen is that everyone in the organisation is integral to quality management, and that anyone, regardless of their rank or position, can make a contribution to improve the operations of the organisation.

Just-in-Time inventory management is designed to improve efficiency and reduce waste in the production process by receiving production inputs only as and when they are required in the production process. Ideally, a just-in-time system would eliminate the need for a stock control system as buffer stocks are not required, thereby cutting out the cost of storage to hold inventory.
‍
JIT manufacturing puts the business in a vulnerable position to potential disruptions in the supply chain. For JIT manufacturing to succeed, the business must have reliable suppliers that deliver production input on time and up to the business’ quality standard. If a supplier cannot deliver the goods on time, there could be a stall in the entire production process for the business.

Kanban is a visual tool used to monitor and mage workflow by attaching a card to each unit of production that indicates its status in the production process. A Kanban board displays which tasks have been completed, which tasks are works in progress, and which tasks have yet to be sorted.
‍
A kanban board ensures production flows at a steady pace by identifying the priority tasks to accomplish before more workload is taken on. Limiting works-in-progress will reduce multitasking and distractions, keeping employees focused on one thing at a time to improve their productivity and efficiency at the task.

Andon is a visual control system used to indicate the status of an aspect of the production process. An audible sound system is used in coordination to create a visual-audio notification system in order to alert workers to manufacturing processes that require attention. Andon invites all employees to take action when issues and problems arise in the production process, and empowers them to stop the entire production to address the problem immediately.
‍
Andons are typically colour-coded as below:
Green - normal operations in progress
Yellow - attention will be needed soon
Red - immediate action required

Cradle to Cradle (C2C) - A sustainable model of product design and manufacturing intended to follow a closed loop system in which all output travels through a continuous cycle of use and reuse. C2C aims to eliminate all waste and ensure the business is sustainable.

Quantity, quality and cost of land - The total cost of the land is compared with its earning potential for the business; the cheapest location may not be ideal if it is in an unsuitable location that will cause more implications than benefits.
‍
Availability and quality of labour - The workforce of an area must be suited to the workforce required by the business. Factors such as the reputation of local education, socioeconomic demographics, regional unemployment rates and protective legislation for workers will be taken into consideration.

Proximity to market - Bulk-increasing businesses, where the final product costs more to transport than its components, will prefer to locate nearer to their target market in order to reduce transport costs.

Access to raw materials - Bulk-reducing businesses, where the costs of transporting components is greater than the final product, will prefer to locate nearer to the source of the components.

Government incentives and limitations - Financial incentives, such as grants, subsidies or tax benefits, are often offered by governments to attract businesses to locate in a certain area. On the other hand, cost-inducing legislation or trade protectionist measures, may deter businesses from a certain region.

‍Feasibility of e-commerce - Businesses who can utilise e-commerce to access its target market can locate in cheaper locations.

Infrastructure available - The transportation, communication and support networks required for efficient operations, such as the availability of public transport for employees, access to roads, rail, sea and air transportation methods, and availability of basic utilities such as clean running water.
‍
Political stability - A stable political climate will ease tension in uncertainties over the introduction of legislation in the future that will implicate the business and its operations.
‍
Clustering - Firms may prefer to locate near other businesses who operate in similar or complementary markets, to gain accessibility to its target market.

Offshoring - Involves relocating business activities and operations abroad, either through relocating offices or outsourcing to external organisations. Offshoring allows businesses to maneuver protectionist measures of certain governments, such as environmental and labour protection laws, or higher taxes and trade restrictions of a certain country.

Insourcing - The use of an organisation’s own people and resources to accomplish a certain function or task which would otherwise have been outsourced. Insourcing tends to be adopted for core business operations and functions, whose quality needs to be carefully observed, or outsourced activities that no longer have any cost-saving benefits.

Outsourcing - The practice of transferring internal business activities to an external firm as a method of reducing costs. Globalisation has intensified competition in many industries. To compete internationally, firms need to gain advantages by reducing costs. A strategic way businesses can gain a cost advantage is by outsourcing non-essential operations.

Advantages
‍High Quality - Outsourced organisations hire specialists to complete tasks with a high quality standard. Businesses are also able to choose from a variety of subcontractors, this competition will drive outsourced subcontractors to offer competitive rates and higher quality service.

‍Labour Costs - Reduces labour costs as outsourced workers are not employed by the organisation. This means the business does not have to cover insurance, sick leave, pension, or bonuses for surpassing expectations.

‍Efficiency - Businesses typically outsource non-essential operations, allowing businesses to focus resources on core activities.

Disadvantages
‍Quality Management - Businesses do not oversee operations of subcontractors. If the subcontractors are revealed to have conducted unethical practices, that would implicate the businesses involved. The quality of the work produced by the subcontractors is ultimately unknown until the business receives the finished product from them. If the subcontractor fails to meet quality standards set by the business, or fails to meet the deadline, an organisation’s entire operations could be delayed.

‍Redundancies - Outsourcing will initially cause redundancies in the organisation. The reduction in job security will negatively impact staff morale and hence productive efficiency.

Supply Chain - The network between a company and its suppliers to produce and distribute a good or service to the end customer. Supply chain management is crucial to optimize the production and distribution of a product, in order to have a faster, more reliable and more efficient production cycle.

Stock Control - Managers must plan, implement and monitor the movement and storage of all stocks.

‍Quality Control - All stages in the supply chain must add value to the final product.

‍Supplier Networks - Managing the quality of relationships with suppliers and intermediaries, and ensuring they are up to the same high standards of the business itself.

‍Transportation - Utilising the most cost-effective methods of distributing products to customers.

Just-in-Time (JIT) - Stock control system based on stocks being delivered as and when they are needed in the production process.
‍
Just-in-Case (JIC) - Traditional stock control system that maintains large amounts of stock in case there are supply or demand fluctuations.
‍
Differences
‍Flexibility - JIC allows a business to meet a sudden increase in demand as there is a buffer stock to rely on, but will suffer when there is a decrease in demand as there will be a lot of stagnating buffer stock. JIT will benefit the business in times of a sudden drop in demand as capital would not be wasted on stock that will not be sold, but the business may not be able to supply and capitalise on a sudden increase in demand.

‍Vulnerability - JIC businesses are vulnerable to a sudden drop in demand that will not be able to cover its high fixed costs in storage and maintenance of its inventory management. Whereas JIT is vulnerable to the reliability of its suppliers, who could cause major disruptions in its supply chain if the supplier is unable to deliver raw materials on time.

‍Saving Capital - JIC allows businesses to benefit from purchasing economies of scale as they tend to make bulk purchases of stock, whereas JIT allows businesses to free up capital that would have been used for storage space and inventory management. The additional capital from both systems can be reinvested into other business practices and core operations.

Storage costs - Storage is inevitably required to house the excess stock.

‍Inflexibility - businesses cannot adapt as quickly to changing trends as they will have to offload their current stock before changes can be made.

Reputation - Businesses may pick up a reputation for not being able to supply market demand, damaging the goodwill held by the business.

‍Lost of sales - Customers may opt for competitors who were able to adapt and meet changing demands.

Capacity Utilisation - A measure of a firm’s existing level of output as a proportion of its potential output. It is often used as a measure of a firm’s efficiency, as it reveals the extent of under-utilised resources a business has.
Capacity Utilisation = (actual output / productive capacity) x 100

Servicing - Constant output will leave little to no time for routine servicing or maintenance of equipment and machinery. This leaves the business vulnerable to long-term breakdowns that could have been prevented with earlier servicing.

‍Stress - Overworking employees will raise the level of stress and lower job satisfaction, which may lead to a lower quality of output, lower productivity, and possibly higher staff turnover.

Labour Productivity - A measure of the efficiency of workers by calculating the output per worker.
Labour Productivity = ( total output / number of workers ) x 100

Increased Profitability - Higher productivity will lead to higher levels of output, which will spread fixed and indirect costs, such as salaries and wages, and reduce the average costs of production.

‍Labour Costs - As productivity increases, the business will require less labour to produce the same level of output. Businesses can lower costs without compromising the scale of output, by hiring fewer employees, or introducing more flexible work schedules with fewer hours in order to reduce salaries of employees.

‍Increased Morale - A motivated employee will create a positive work environment that will spread its influence to others.

Quality - Consider whether the business has the experience or understanding required to complete the task to a high standard of quality, and whether the specialisation of an external supplier would produce higher quality in a shorter time frame.

Reliability - Using a supplier leaves the business vulnerable to the reliability of the supplier, who will cause a disruption in the entire production operation if they do not meet the requirements of the business.

Research and development - The process by which a business works to obtain new knowledge and understandings that it might use to create new technologies, products, services, or systems that it will either use or sell. The primary purpose of R&D is to innovate or improve current operations in order to enhance performance and efficiency to gain a competitive advantage.

First-Mover Advantage - Especially in sunrise industries where competition is intense, gaining a first-mover advantage by innovating a successful new product or process will grant the business greater market participation to attract new customers, and the potential to gain market leadership and power.

‍Efficiency - R&D not only aims to innovate new products, but improve the systems and processes of the business. Gaining greater efficiency in operations will allow businesses to cut costs while maintaining the same level of output and performance, thereby increasing the profitability of the business.

Costs - R&D is a cost center for the business, meaning it does not contribute directly to revenue or cash inflow; the business must invest its profits from profit centers into R&D to cover its costs, leaving the business with less capital to invest in other operations.

‍Risk - As with any product-oriented process, the market reaction to the output from R&D may not be successful. Furthermore, if other businesses invest more into R&D and develop patented technology that interferes with the R&D efforts of others, the costs of their R&D may never be recouped.

Incremental Innovation - Continuous minor improvements made to existing products and processes to add more value to the business. It focuses on improving efficiency, performance, and quality with features such as product life extensions and cost reductions, while not disrupting business operations.

Radical Innovation - Major and disruptive innovations that aim to transform an industry with the introduction of a new concept for a product or process. Radical innovation tends to identify and satisfy an unmet need of the market, and gives businesses a first-mover advantage.

Product Innovation - Developing new, redesigned, or substantially improved products that meet the same needs of customers in a different way.
‍
Process Innovation - Implementation of a new or significantly improved method of production or delivery.
‍
Positioning Innovation - Changing the market’s perception of an established product.

‍Paradigm Innovation - A radical change that affects an entire industry.

Adaptive Creativity - Category of incremental innovation that adjusts or develops something that already exists. Generally, adaptive ideas build on the continuity of practices and organisational norms to make them more efficient and productive.

Innovative Creativity - Radical form of creativity that involves creating something entirely new by redefining problems and cultural norms.

Crisis Management - The reactive response of an organisation to a crisis situation. Crisis management aims to minimise the negative impact of unpredictable situations, such as a fire or a hostile takeover from a competitor, in order to guarantee the survival of the business. An autocratic style of leadership and centralised decision-making will find the most success in crisis management.

Contingency Planning - A proactive plan that identifies all probable threats and prepares a plan of how to deal with such threats. Contingency plans are integral to a business’ continuity strategy as it helps to ensure that the organisation is ready for unpredictable events.

Proactive vs Reactive - Contingency planning is proactive, preparing for events before they ever occur to ensure that the business is prepared for what may come. Whereas crisis management is reactive, only taking effect once the business has entered a crisis situation, to empower the business to manage its response and ensure its survival.

Transparency - Hiding the extent of a crisis from all internal and external stakeholders of the business may lead to speculation, negative media coverage, and a damage of goodwill. Being honest and open about a crisis will help defuse negative speculation about the business.
‍
Communication - Effective communication with all key stakeholders is critical to prevent negative media coverage and maintain a positive reputation. Ensuring that the business has a clear and consistent message to ease doubts and mitigate pressure on the business will benefit its recovery after the crisis.
‍
Speed - The speed of the response is critical to mitigating the growth of a crisis and reducing the damage caused. The longer the business takes to respond to a crisis, the greater the impact of the crisis, which increases the costs to repair the damages.
‍
Control - Competent leadership, and the ability to make quick and effective decisions, is necessary to lead the business through the crisis with minimal damage. A crisis is ruled by unfamiliarity and uncertainty; leaders must be able to adapt plans and maintain composure in order to promote rapid problem solving and execution under high-stress conditions.