Production Strategies

Various companies employ different production scheduling techniques using several strategies. The implementation of the latter depends on such factors as a customer’s feedback, shareholders’ demands, and the reshaping of a product or service. Moreover, organizations do so hoping to rethink their distribution approaches, connecting supplies to retailers. Ultimately, each implemented policy has its direct or indirect impact on the overall production or service delivery process.

The Chase Production Strategy

Studies on the chase production strategy conclude that organizations that choose to implement this kind of aggregate and intermediate planning aim to determine their critical resource capacities. It benefits a business, which can assess whether it can meet the required demands. The approach works based on the principle that enables firms to evaluate their output or production to match the demand (Choudhari, Adil, & Ananthakumar, 2012). To achieve this, they may consider employing or firing employees to regulate output. It ensures that the company produces as much as needed. Moreover, the chase production strategy is resourceful, since it requires zero inventory, eliminating holding costs, oversupplies, and shortages. Notably, low inventory charges incurred during manufacture consequently lead to high smoothing costs for the company.

Logistically, the chase production technique is best applicable in situations, whereby the production rate matches the demand pattern in hand, eliminating lost or inventory sales because of the value and volume. For example, a computer company may choose to sell its products based on the pre-demanded volume to ensure that it produces the required amount of utilities based on the demand.

The Level Production Strategy

Some organizations may wish to implement the level production strategy within their workplace to distribute materials and labor evenly. It is part of the transitional planning approach applied in this form of production. However, a significant difference is that level production is based on producing constant output in each given period (Hajji, Gharbi, Kenne, & Pellerin, 2011). The chase strategy does not do so and only targets meeting the required demands. Notably, level production works in case of a stable workforce and rarely requires an organization to fire or hire employees. Moreover, the staff is not forced to work overtime, and outsourcing subcontracts is uncommon. Several studies conclude that diminished smoothing costs incurred by various organizations that choose to employ this method of production occasionally result in high inventory costs.

Logistically, the level production approach may be applicable in organizations that use backorders while delivering products. Such use entails promising delivery to clients later when goods become more readily available. Using backorders is the best option when the production capacity begins to meet with the dwindling demand. For example, managers may promise to deliver a new product in the market, but since it is currently in huge demand, they may make assured delivery when the demand falls to match production.

The Mixed Combination Production Strategy

Alternatively, companies may wish to employ the mixed combination technique in their manufacturing. This approach entails combining and simultaneously employing both the chase and level production approaches to increase organization’s competitiveness. Using a mixed or a hybrid policy entails the company restructuring its manufacturing processes to suit ideologies presented by chase and level production (Baines et al., 2009). To match the demand and capacity of manufacturing through steady production and employment through hiring and dismissing inefficient workers requires a firm to streamline its production line through subcontracting, inventory management, and cross training.

From the logistics perspective, the mixed combination strategy is best applicable when the organization is in a position to meet current demands. However, it may choose to promise future orders to certain suppliers with the incentive of a discounted price (Bullinger & Schweizer, 2006). It will ensure that the organization does not exceed its production capacity or tamper with quality. Most companies that engage in car manufacturing utilize this form of production to meet the best market demand and ensure quality adherence.

How It Works

Conclusion

The manner in which organizations integrate production strategies into their manufacturing processes significantly contributes to the overall outcome. Company’s choice of an approach is based on customers’ feedback and shareholders’ demands. Consequently, employing production strategies contributes to reshaping services and products. Choosing whether to utilize chase policies, level production approaches, or both depends on the company’s staff, product demand, and inventory costs. Ultimately, each strategy chosen will have its advantages, which, if implemented strategically, will generate revenue.