Production planning begins with choosing a process that fits the product or service, company goals, and customer demand. This lesson compares mass production, mass customization, and customization, and explains how the three approaches differ.
A production process is the way a good or service is created. Companies choose an approach based partly on how many customers they serve and how much variation those customers want.
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What is mass production?
A method of producing many uniform goods using repetitive, standardized processes, usually to keep unit costs low.
What is mass customization?
A production approach that uses mass-production methods for standard steps and then tailors selected features to individual customers.
What makes customization different from mass customization?
Customization produces a good or service according to an individual customer's requirements, so each output may be unique. Mass customization retains standardized production steps.
What is a job shop?
A manufacturing firm that produces goods in response to customer orders, often handling varied products or specifications.
How do volume and variety relate to production type?
Mass production generally serves high volume with low variety, while customization handles more individual variety and often lower volumes. Mass customization combines efficient standardized steps with selected customer options.
Quiz questions
What distinguishes mass customization from mass production?Answer: It combines standardized production steps with features selected by individual customers.
What happens in process manufacturing?Answer: Basic inputs are processed or broken down into one or more outputs.
Which production pattern is typical of a continuous process?Answer: Long runs of standardized output suited to high volume and low variety.
In a service process, what can a customer contribute as an input?Answer: Information needed by the service provider to deliver the service.
What is characteristic of a job shop?Answer: It makes goods to order and commonly handles varied customer requirements.
Based on Introduction to Business 2e by Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.