Batch production is resorted to when to when a variety of products are to be made and the volumes are not large enough to demand a separate line for each product. In this method, general machines are used to turn out different products. The flow of materials is more complex in such a system. The layout is planned keeping the volume, flow and variety in mind. Batch production, however, is distinct from the job shop production. In batch production, there is a continuous demand. However, the rate of production exceeds the rate of demand (P>D). Hence the products manufacturing taken up in batches. The scheduling here is that of the batch sizes and their sequence. In job shop production, there are a group of orders. They are processed on common facilities. Each job however is unique. It may consist of a single item or a collection of identical items. The scheduling here is that of sequencing the jobs at the common facilities.
Features of batch production:
Batch production employs a process layout unlike mass production system where there is product layout. In this system, similar machines are grouped into departments like tablet making department, capsulation department, and oral liquids department in a pharmaceutical unit. Different jobs follow their own routes. The flexibility of the system is much more.
1. Fewer machines are necessary, since machine utilization is better.
2. Specialized supervision is possible.
3. Low investment in machines and therefore not-so-capital-intensive.
4. Flexibility with respect to personnel, equipment.
5. Job satisfaction for the operatives.
1. Material handling is costlier since the flow is longer and irregular.
2. PPC is elaborate.
3. Production time is longer generally.
4. WIP (work in process) ties up large capital and space.
5. Skills of a higher order are necessary considering the variety.
Besides advantages the basic question which puzzles the production man is the size of the production lot or batch and the sequencing of the different batches. Mostly these questions are settled by some rule-of-thumb methods. However, a rational approach can be adopted. It is discussed hereunder.
Economic Lot Size (or batch Size):
We shall consider this with respect to a single product, and a multi-product case.
First let us get acquainted with three categories of costs in production function.
Set up Cost:
Batch production involves a set up cost, each time a batch is produced. Set up cost is roughly equivalent to the ordering cost per order. It consists of engineering cost of setting up the production lines or machines, paperwork cost of processing work order and authorizing production and ordering cost to provide raw materials for the batch or order.
These are incurred on the finished product from the time it is manufactured until it is finally sold.
The so-called economic batch quantity represents an attempt to calculate the best compromise on batch size, which also keeps the total costs to the minimum.