Production Management

  • Production refers to the creation of goods and services for consumption by the society. This production means converting inputs into outputs as per the need of the society. Production management encompasses all those activities that enable conversion of a set of inputs into outputs which are useful to meet the human needs. Production Management is the application of management principles to the production function in a factory. It involves application of planning, organizing, directing and controlling the production process. Some definitions of production management are as follows
  • Mr, E.L. Brech defines the production management as “It is the process of effective planning and regulating the operations of that section of an enterprise which is responsible for the actual transformation of materials into finished products.” This definition emphasizes on transformation process of inputs into outputs. It is not considering human factor involved.
  • Production Management deals with decision-making related to production process. So that the resulting goods and services are produced in accordance with the quantitative specifications and demand schedule with minimum cost. This definition emphasizes on the design and control of the production system and lower cost of production.
  • Production Management is a set of general principles for production economies, facility design, job design, schedule design, quality control, inventory control, work study and cost and budgetary control. This definition emphasizes on the activities involved in production management. Hence production management involves planning and control as its major activities.

Functions of Production Management

Selection of Product and Design:

  • Actually this is the phase in which the consumer needs are studied and are evaluated by marketing department. A product which satisfies the need of the customer is decided. A existing product in market is selected or Research and development division develops a complete new product from scratch or modifies the existing product so that the consumer’s need are satisfied. After selecting a product a right design is selected. Satisfaction of consumer’s need is the criteria for selection of product and its design and at lower cost. At this level techniques such as value engineering and value analysis are used. At this stage involvement of production management is less. Because launching a product is a strategic decision, hence top management (board of directors and owners) are involved in this stage.

Selection of Production Process:

  • Process selection refers to the strategic decisions of selecting the kind of production process to have in a manufacturing plant. The process flow in an organization refers to how a factory organizes material flow using one or more of the process technologies including the job shop, batch shop, assembly line, and continuous flows. They must decide about the technology to be used , machines and equipment required, and material handling system, etc. The process chosen depends on the customization of the product as well as the volume required in the market.
  • As the production volume of project increases specialized equipment and standardized material are used to minimize cost. The evolution in the process structure is often related to the product’s life cycle stage.
  • In this stage flow of raw materials, sub assemblies is decided.

Selecting Right Production Capacity:

  • Production manager decides the right production capacity to match the demand for the product as per marketing department. Excess capacity will make machinery and labour idle, while insufficient capacity will not be able to match the demand. The production manager must plan the capacity for both short and long term’s production.
  • Capacity selection involves break even analysis.

Production Planning:

  • In this stage the production manager decides about the routing and scheduling.
  • Routing: Routing can be defined as the process of deciding the path (route) of work and the sequence of operations. It ensures smooth flow of the work and optimum utilization of resources during production. It decides in  advance, the quantity and quality of product, the men, machines and materials to be used, the types and number of processes to be used, the sequences in which the processes or operations to be arranged. the place where the production is to be done.
  • Scheduling: Scheduling fixes the amount of work to do. It arranges the different manufacturing operations in order of priority. It fixes the starting and completing, date and time, for each operation. For this different charts and control techniques are used.

Production Control:

  • The production manager has to ensure that the production is per the plans. If he finds any deviation in the production, he has to take corrective actions.

Quality and Cost Control:

  • To remain competitive in a market the good quality products should be produced at the lowest possible cost. Hence qality and cost control is one of the important function of production management.
  • The cost can be controlled by optimum use of resources, minimizing cost of inventory and cost of holding finish goods.
  • The quantities of the product  at every stage in production have to be assessed for procurement, storage, quality, and receipt. Information flow at every stage helps to identify the value additions that are taking place. A trustworthy record of the various stages, the time consumed, costs involved, and their impact on other processes helps in identifying the bottlenecks and also the opportunities for improvement.

Inventory Control:

  • The production manager must monitor the level of inventories. Due to overstocking the working capital of the firm gets blocked while due to understocking the production schedule is disturbed and delivery of finished products gets affected. Hence the production manager has to maintain proper level of inventory which is neither overstocking nor understocking.
  • The concepts of Just-In-Time (JIT) and lean manufacturing are applied to utilize the resources to the best advantage and also to minimize or eliminate inventories.

Maintenance and Replacement of Machines:

  • To obtain uninterrupted production the machines and equipments used should be in good conditions. Preventive maintenance is better than break down maintenance, hence preventive maintenance schedules should be prepared. These schedules should not affect the production schedule.
  • Continuous inspection (routine checks), cleaning, oiling, maintenance and replacement of old machines, equipments, availability of spare parts, etc. is a task of production manager.

Other Functions:

  • Training and deploying the workforce, implementing the procedures for systematic loading of machines, packaging the products for safe distribution and dispatch.

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