Investment thrives on our banks

Nowhere is the power of economic regeneration more apparent than on the Mersey Waterfront. Today, it has become the site for a community of flourishing new businesses.

The internationally acclaimed Albert Dock is the vibrant hub of Mersey-side's rapidly expanding leisure and tourist industry. Executive housing has been encouraged by an improved environment and increase in confidence. These achievements have enhanced the quality of life bringing the promise of employment and prosperity. It's a programme of change which owes its existence to the dynamism and vision of the Merseyside Development Corporation. Prime development land has been reclaimed and opened up, essential infrastructures established. Private sector investors were quick to respond to what will become the major investment opportunity of the 1990s. They were spurred on by the benefits of a workforce specially trained for their needs and the prospect of financial assistance. Past successes have substantially extended the MDC's sphere of influence. Now the MDC's hard work opening up new development land along both banks of the Mersey is creating the foundation on which the next wave of private enterprise will take shape. So get the facts now. Call Eileen Wall on 051-2366090.

3. Joan Logan used the Enterprise Allowance Scheme to set herself up in business as a wood carver. At first the business developed slowly but in 1988 a major furnishing chain expressed interest in her work. Initially they placed an order for 500 bases for table lamps. On the strength of this Joan, employed another skilled worker, and the two of them were just about able to fulfil the order for the agreed delivery date. The lamps sold well and the furnishing chain was back with additional orders. Joan was unwilling to refuse the business but she knew that the two of them could not keep working fifteen hours a day to fulfil the orders.

1. Outline the major methods of production.

2. State and explain three ways in which Joan could attempt to solve her problem.

3. Select one of your answers to "b" and outline three problems Joan might face if she adopted this solution.

Activities

1. As a group select a simple craft product with which you are unfamiliar. Origami (the art of folding paper) might provide suitable examples. It should be possible to make the product using job, batch and flow techniques.

2. Make a realistic assessment of direct labour and material costs.

3. Divided into three groups, each using a different production method, learn how to make the product. The learning process can be judged complete when products of an acceptable saleable standard are being produced. Calculate the cost of the learning process in terms of direct material and labour for each group.

4. Continue to make the item for at least an hour.

5. Comment on the following aspects of the exercise:

1. Assuming that you want to cover all costs, including development costs, and make a profit of 10 per cent on costs, what is the break-even point?

2. Analyze the difficulties experienced by each group. This should include problems of materials and equipment, quality control and wastage rates, learning times, group attitudes to the exercise (Did some members of the group think the exercise a waste of time? How did this affect their productivity and performance?), bottlenecks experienced and reasons for them.

There is no guarantee that your experience will reflect the conventional wisdom relating to different types of production. If there is a difference can you explain it? You should remember that each individual has a unique set of skills and aptitudes and the problems you have encountered reflect those of a production manager. Why might these problems be intensified in a period of relatively full employment?

2. Visit several business organizations analyzing the production function in each according to the outline given in this chapter. Your selection of businesses should include examples of job, batch and flow production organization and, if possible, businesses operating in a variety of markets. Interview the production manager. What does she/he see as the main problems? Is it the market, people, finance or equipment that provide the biggest constraints on decision making?

Focus on writing

Choose one of the proposed problems and write an essay, describing your own opinion

and experience. Write about 250 words.

1. The concept of economies of scale suggests that large businesses are more efficient in their use of resources than small businesses. If this is so why do small businesses survive and what justification can be offered for the investment of government money in the small business sector?

2. Outline and comment on the inter relationships which exist between the marketing and production functions.

3. The location decisions of a business are relatively independent of considerations of market and supplies. What are the implications of this position for:

   1. the business?

   2. attempts by central and local government to control or influence location decisions in the private sector?

4. What factors contribute to making a business "footloose"?

5. What do you understand by the term "production function"? Comment on the role of the production plan in the overall planning process of a business.

6. Discuss the factors a business would take into consideration in planning the layout of its production processes.

7."Job production is limited to the craft specialist." How far do you agree with this statement?

8."Flow production can produce goods at lower unit cost than either job or batch methods." Comment on the conditions necessary to make this a true statement.