0264 · 4.2.1The use of technology in the production of goods and services

Mechanisation, automation and CAM

0:00A machine can help an employee drill a hole, control an entire cutting sequence, or process a customer’s payment. Each of these changes affects how a business uses its resources and what its employees do. By the end, you will understand how technology changes production methods, productivity, costs and jobs. Production is using resources to make goods or provide services. Goods are physical products, while services are activities carried out for customers.

0:25Technology can change the making of goods and also services such as booking appointments. In each setting, businesses want to complete useful work with fewer delays, mistakes or resources. Labour productivity is the output per employee in a period of time. A business improves this measure when each employee produces more over the same period. Technology can help by speeding up a task or removing time spent on repetitive activities.

0:50The result depends on whether the equipment suits the business and employees can use it effectively. Mechanisation is production using machines operated by people. Kestrel Works makes metal parts for bicycles. At its workshop, an employee uses a powered drill and controls where each hole goes. The machine supplies power, so the task requires less physical effort and can be completed more quickly. Automation is production using equipment that controls itself with little or no human involvement, such as robots.

1:16A programmed machine can position the material, drill the holes and move the finished part onwards. Employees still prepare instructions, monitor performance and maintain equipment. The key distinction concerns who controls the actions during production. Mechanisation can increase output while employees continue to direct individual tasks. Automation transfers more of that control to equipment. At Kestrel Works, a repeated drilling sequence is suitable because the required positions stay consistent. An unusual repair may still need an employee’s judgement because the problem varies between jobs.

1:47Computer-Aided Manufacture, or C A M, is the use of computers to control machines that make products. The instructions specify actions such as cutting, drilling, welding or painting. At Kestrel Works, the computer sends the required cutting instructions to a machine. That equipment then follows the programmed sequence to shape each part. Accurate instructions allow the machine to repeat a task consistently. This reduces variation between finished parts and can prevent wasted material caused by cutting errors.

2:16Employees must still check the settings and inspect the results. An incorrect instruction can be repeated across many products, so careful preparation remains essential.

3D printing for customised products

2:24Three D printing builds a solid object layer by layer from a digital design. Fern Studio makes customised architectural models for customers. A printer follows the design and deposits material in successive layers until the shape is complete. Changing the digital instructions allows the business to produce a different model for another customer. This method is useful for prototypes, spare parts and customised products. A prototype is an early sample used to test a product’s design.

2:49Printing one allows a business to inspect its shape before committing to larger production. The printer adds material only where the design needs it, so little is wasted. Failed prints and support structures still use some material and time. The suitability of three D printing depends on the product. A complex customised model may benefit from the flexibility of a digital design. Large quantities of identical products may be made more quickly using other equipment.

3:14Managers therefore compare the required quantity, material, accuracy and speed before choosing a technology.

Service technology and labour productivity

3:21Contactless payments allow a customer to pay by holding a card or phone near a reader. Willow Table serves drinks and snacks. Faster transactions reduce the time its employees spend handling money and giving change. During busy periods, this can shorten queues and allow more customers to be served each hour. The benefit depends on where the delay occurs. If customers are waiting mainly for drinks to be prepared, faster payment alone has a limited effect on completed orders.

3:45Managers need to examine the whole service process. Technology improves productivity most effectively when it reduces the activity that restricts the business’s output. Self-service checkouts let customers scan purchases and complete transactions themselves. One employee can supervise several machines and help when difficulties occur. Online booking allows customers to reserve appointments or rooms directly. Employees then spend less time answering routine enquiries and have more time for other customer needs.

4:12Suppose Willow Table introduces contactless payments, and payment speed is the main limit on service. Customer demand is sufficient, while the menu, opening conditions and number of employees stay unchanged. Before the change, four employees serve eighty customers per hour. Afterwards, the same team serves one hundred and twenty customers per hour. Labour productivity equals output per period divided by number of employees. Before the change, eighty divided by four gives twenty customers per employee per hour.

4:40With contactless payments, labour productivity rises to thirty, because one hundred and twenty divided by four is thirty. Thirty minus twenty gives ten, so each employee serves ten more customers per hour. The calculation measures output relative to the number of employees. Here, each employee serves more customers within the same time. The business gains because existing labour can support a busier service. Whether the investment is worthwhile also depends on equipment charges, transaction fees and any additional running costs.

Technology costs, jobs and exam answers

5:08For businesses, higher productivity allows more output from existing resources. Lower labour costs per unit are possible when fewer paid hours are needed for each item. Quality is producing a good or service that meets customers’ expectations and is free from faults. Consistent machine settings help achieve this, while fewer errors reduce spending on correcting mistakes. The purchase and installation cost can be substantial for the business. Equipment also needs maintenance, which adds ongoing expenditure.

5:35A breakdown can interrupt production until repairs are completed. Dependence on one essential machine increases this risk because several later tasks may have to stop while it is unavailable. Training creates costs because employees need instruction and time to practise. Redundancy is when an employee loses their job because the job is no longer needed, through no fault of their own. When technology removes jobs, the business must make redundancy payments to the employees who leave.

6:01Connected systems also create cyber-security risks because unauthorised access can disrupt operations or expose customer information. Employees can benefit when machines take over dangerous tasks, such as handling hot materials. Repetitive activities can also be reduced, so daily work becomes less boring. New skilled jobs may involve programming, maintenance or supervising equipment. These roles can offer higher pay because the business needs specialist knowledge. Other employees may lose their jobs when their tasks become automated.

6:30Those who remain may need to retrain because existing skills no longer match the new equipment. Fear of change can create anxiety about future employment or the ability to learn. Early explanations and practical support help employees prepare, although some roles may still disappear. Examiners reward precise distinctions in this topic. Mechanisation keeps people operating the machines, while automation places control within the equipment. Labour productivity compares output with the number of employees, so check that output per employee has risen.

6:59A strong answer weighs the productivity gain against the cost of buying, running and maintaining the technology. An exam-style question could concern Harbour Inn, a small accommodation business introducing online booking. Its reception employees currently spend considerable time taking reservations by telephone. The question asks you to explain one advantage for the business and one disadvantage for employees. Explain means set out purposes or reasons, say why and how, supported with relevant evidence.

7:26Online booking allows guests to enter reservation details themselves. Reception employees spend less time on telephone reservations, so the same team can deal with more guests during each shift. Harbour Inn can therefore handle more bookings without recruiting extra employees, so its labour cost per booking falls. Its employees, however, may need training to manage the new system. Learning unfamiliar procedures can create anxiety about their ability to perform the changed role.

7:50In Paper One Short Answer and Data Response and Paper Two Case Study, use the circumstances given in the question. Name who benefits or faces a disadvantage, then explain the business reason. Connect the technology to a specific task before stating the outcome. This turns a general claim about speed into an explanation of improved productivity. Remember that mechanisation is production using machines operated by people. Production using equipment that controls itself with little or no human involvement, such as robots, is called automation.

8:20C A M uses computers to control machines that make products, while three D printing builds a solid object layer by layer. In services, quicker transactions and direct bookings release employees’ time, but every change brings costs and consequences for people.