Production processes: Batch, flow, continuous & custom—Methods, examples, and features - QuickBooks (2024)

Midsize business

A production process is a method a business uses to manufacture products for its customers. The right production process enables businesses to meet customer demand, minimize waste, and maximize profits. So, if you run a manufacturing business, it’s essential to understand the nuances of various production processes to decide which method best suits your unique needs.

In this article, we’ll cover four distinct types of production processes:

• Batch production
• Continuous production
• Flow production
• Custom production(also known as job shop or bespoke production)

These production processes are further classified in one of two ways:

• Continuous production processes:This includes flow and continuous production processes. These are large-volume processes designed to produce large amounts of inventory consistently.
• Intermittent production processes:This includes batch and custom production processes. These production processes are designed to handle small to medium-sized production.

Coming up, we’ll explore examples of each method, how they work, and best practices for implementing them.

Why the production process your business uses matters

Determining the right production process can make or break your business—and this starts by evaluating the variables involved in producing your goods. The manufacturing process is complex and rests on several inputs, including these four factors of production:

1. Land:This encompasses all natural resources that are available to create supply, both renewable and non-renewable
2. Labor:Any work done by employees contributing to production
3. Capital:This is not a reference to money but rather to resources such as factories and machines that are used in the production of other goods
4. Entrepreneurship:The individual or group that takes on the economic risk to bring the other three factors of production together

No matter what your business manufactures, it’s essential to align your production process with the type of product you’re making, consumer demand, your competitive landscape, and your budget. Using the right production process maximizes the efficiency of your business, which in turn increases your profits.

Once you’ve identified the factors that will influence your production, it’s time to take an in-depth look at the four main production methods.

What is batch production?

Also known as process manufacturing, batch manufacturing involves large quantities ofraw materialsbeing processed in batches through the production process. Any subsequent stage or batch must wait until the current batch is complete. Batch production is the default production process for many manufacturers.

Example of batch production

Imagine that a company like Standard Textile provides hotels with the towels, linens, and fabrics they need for their business. They use batch production to fulfill bulk orders for a specific hotel.

Using the batch process on a specific set of machines, they produce the 500 large pillowcases their client needs. One set of machinery handles the small pillowcases. Another set produces 1,000 bed sheets.

With batch production, their processes are flexible and able to quickly adapt to the changes by their hotel client’s request.

Features of batch production

• Cheaper than other processing methods
• Inherently flexible, enabling manufacturers to produce different batches of new products quickly
• Ideal for small production runs and seasonal items
• Reduces inventory
• Pausing between batches results in downtime

Batch production is ideal for small production runs. But what if you need a production process that’s designed to produce consistently? Let’s take a look at flow production.

What is flow production?

This method (also called mass production) is focused on producing a large number of products rapidly on a large scale using production line techniques where workers focus on a specific step in the production process. Under this method, production is continuous in anticipation of future demand.

Example of flow production

Rhodes InternationalBake ‘N Serv is the largest manufacturer of frozen dough in North America. They rely on a flow production process. Every employee workstation has a specific task they repeat over and over as the production flows through the plant.

Here’s how it works:

1. Employees work in the mixing station load and monitor the machines that mix the dough.
2. Molders take the fresh dough coming off the conveyor belt and slap them into the cold bread pans moving into the freezer.
3. After a quick deep freeze, baggers count rows of frozen loaves of dough and push them through the bagging mechanism.
4. Boxers load completed bags off the conveyor belt into boxes and tape and stack them onto pallets.
5. Lastly, the pallet driver moves the full pallet into the freezer for storage until delivery.

Features of flow production

• Flow production works the same way no matter what products you’re manufacturing. The component parts follow the same path at each machine repeatedly. As a result, each production unit is complete, organized, and efficient.
• Enables large volumes of production with lower cycle times
• Continuous production increases levels of capacity utilization
• Requires a substantial upfront investment in production facilities

Flow production is ideal for large volumes that need to be produced quickly. What about businesses in need of a production process that runs 24/7? That would be continuous production.

What is continuous production?

Continuous production (also called process production) is a derivative of flow production. Put simply, this method is used to process materials without interruptions. Products flow continuously through a linear process on autopilot.

Example of continuous production

Continuous production is common for industries in which quality and performance hinge on uninterrupted processes, such as a water treatment plant. In a continuous system, wastewater is continuously added, while treated water is continuously discharged to maintain a clean water supply for the area.

Features of continuous production

• Has the highest level of capacity utilization
• Low unit costs due to a high volume of production
• Used in dedicated plants (e.g., steel, iron, chemical) with little flexibility
• Component materials are heavily processed, and the finished product can’t be identified with the source material
• Requires high initial investment, so competition is limited/scarce

The three production processes that we’ve covered so far are designed to satisfy large volumes and continuous production. But what if you need a process that’s project-dependent? Time to call on custom production.

What is custom production?

Custom production, also known as job production, job shop production, or unit production, refers to small manufacturing systems that handle custom manufacturing processes. These job or machine shops typically move on to different projects (often with different customers) once each job or project is complete.

Each shop contains its own unique mix of skills, processes, machines, and processing flexibility. Work is typically not constrained to any one machine. Think of custom production and flow manufacturing on opposite sides of the production spectrum.

Example of custom production

A custom furniture company offers about 50 different products while stocking hundreds of inventory items, yet they ship about 10 finished pieces per month.

Under the custom production process, the furniture shop receives a custom order from a client. They plan the project out, identifying the manpower, materials, and machines needed to complete the project. The project is then built to a predetermined set of specifications and delivered to customers on completion.

Features of custom production

• High levels of flexibility (machines can be added, upgraded or substituted)
• High production volume elasticity (due to low product volume)
• Low obsolescence (due to multipurpose machines)
• Higher production costs due to specialized labor and customization of products
• Requires significant upfront work before work can start, which slows down the production process

Pro tip: use software to streamline your production process

No matter which production process you implement, you can use software to take control of your operations management.QuickBooks Enterprise for Manufacturinghas all the business management functionality you need to keep your inventory management and sales fulfillment on track.

Here are a few key features:

• Powerful, customizable reporting to forecast demand and gain visibility into your profitability to make more informed decisions.
• Automatically create build or purchase orders when inventory drops below preset points.
• Easily track product movement and storage down to the bin or pallet across staging areas, multiple warehouses, trucks, and even ships prior to import.

The manufacturing processes we covered in this article are a fundamental part of manufacturing success. With the right business management tools, production processes, and an emphasis on lean manufacturing, you can achieve stability and consistent growth for your company and the industry, one customer at a time.