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Growing a business

4 production process methods manufacturers need to know

In the intricate world of manufacturing, the choice of a production process is a strategic decision that can significantly impact your business's success.

A well-suited production method not only meets customer demand, but also minimizes waste and maximizes profits. As a manufacturing business owner, delving into the nuances of various production processes is essential to align with your unique needs.

What are four key production processes?

At a quick glance, there are four production processes: batch, continuous, flow, and custom.

  1. Batch production: Ideal for flexibility and small runs, this process is illustrated by Canadian Linen’s uniforms, linens, and other textile products.
  2. Continuous production: Derived from flow production, this method ensures uninterrupted processes, crucial for industries like water treatment plants.
  3. Flow production: Also known as mass production, this process focuses on producing a large number of products rapidly on a large scale, exemplified by George Weston Limited, a Toronto company specializing in food processing and distribution.
  4. Custom production (job shop): Suited for project-dependent processes, this method allows for high flexibility and customization, as seen in custom furniture manufacturing.

These production processes are further classified as continuous or intermittent:

  • Continuous production processes: Encompassing flow and continuous production, designed for large-volume processes producing consistent inventory
  • Intermittent production processes: Covering batch and custom production, tailored for small to medium-sized production runs

Understanding the impact

The production process you choose plays a pivotal role in the success of your business. It involves evaluating crucial factors of production:

  • Land: All natural resources available for supply, both renewable and non-renewable, such as timber
  • Labor: The contribution of employees to the production process
  • Capital: Resources like factories and machines used in the production of goods
  • Entrepreneurship: The individual or group taking on economic risk to bring the factors of production together

Aligning your production process with your product type, consumer demand, competitive landscape, and budget is essential for efficiency and increased profits.

Why your production process matters

Choosing the right production process can be a make-or-break decision. It directly influences the efficiency of your business and, consequently, its profitability.

What is batch production?

Batch production, also known as process manufacturing, involves processing large quantities of raw materials in batches through the production process. Each subsequent stage or batch must wait until the current batch is complete, making it the default production process for many manufacturers.

Example of batch production

Canadian Linen is a uniform and linen service company that provides batch production services for uniforms, linens, and other textile products to multiple industries. Production includes food processing uniforms; flame-resistant uniforms for industrial and automotive fields; and cleaning linens, gloves, and similar personal protection equipment for facility management purposes.

Features of batch production

  • Cost-effective compared to other processing methods
  • Inherently flexible, allowing quick production of different batches of new products
  • Ideal for small production runs and seasonal items
  • Reduces inventory
  • Pausing between batches may result in downtime

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What is flow production?

Also known as mass production, flow production focuses on rapidly producing a large number of products on a large scale using production line techniques. Workers concentrate on specific steps in the production process, ensuring continuous production in anticipation of future demand.

Example of flow production

Bimbo Canada is a Canadian bakery that has been operating for more than 100 years. It is the largest and oldest bakery in Canada, producing more than 1,000 products across 18 brands, including Dempster's, Stonemill, Villaggio, Vachon, and Takis.

Features of flow production

  • Consistent process regardless of the manufactured products
  • Enables large volumes of production with lower cycle times
  • Increases levels of capacity utilization through continuous production
  • Requires a substantial upfront investment in production facilities

Flow production is ideal for businesses that need large volumes produced quickly.

What is continuous production?

Continuous production, often termed process production, is a direct descendant of flow production. In simple terms, this method is employed to process materials without interruptions, ensuring products flow continuously through a linear process autonomously.

Example of continuous production

This approach is prevalent in industries where quality and performance rely on uninterrupted processes, as seen in fossil fuel extraction or water treatment plants. In a continuous water treatment system, wastewater is continually added, while treated water is consistently discharged — maintaining a clean water supply.

Features of continuous production

  • Highest level of capacity utilization
  • Low unit costs due to high production volume
  • Utilized in dedicated plants (such as steel, iron, or chemical) with limited flexibility
  • Component materials undergo extensive processing, making the finished product unidentifiable with the source material
  • Requires a significant initial investment, leading to limited competition

The production methods covered so far are tailored for large volumes and continuous production. However, if your need is project-dependent, let's delve into custom production.

What is custom production?

Custom production, also known as job production or unit production, involves small manufacturing systems handling custom manufacturing processes. These shops move on to different projects after completing each job, offering a unique mix of skills, processes, machines, and processing flexibility.

Example of custom production

Consider a custom furniture company such as Zenlia Home Store, a luxury furniture store in Woodbridge, Ontario. While the company stocks hundreds of inventory items, it specializes in handcrafted, Canadian-made custom furniture.

Features of custom production

  • High flexibility (machines can be added, upgraded, or substituted)
  • High production volume elasticity (due to low product volume)
  • Low obsolescence (thanks to multi-purpose machines)
  • Higher production costs due to specialized labor and product customization
  • Requires significant upfront work, slowing down the production process

These manufacturing processes, when coupled with the right business management tools and a focus on lean manufacturing, pave the way for stability and consistent growth, benefiting your company and the industry one customer at a time.

Streamline your production process with QuickBooks

Regardless of the production process, you need tools to enhance operations management. QuickBooks Enterprise for Manufacturing provides essential business management functionality, offering powerful and customizable reporting, automated order creation, and efficient tracking of product movement and storage.

Unlock the tools you need with QuickBooks to help your business thrive. Explore plans now.


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