Meaning Of Production Management
A few definitions of production management are being reproduced here under to understand the meaning of the term clearly:
“Production management is the process of effectively planning and regulating the operations of that part of an enterprise which is responsible for actual transformation of materials into finished products”.
Elwood S. Buffa has defined the term in a broader sense as:
“Production management deals with decision making related to production process so that the resulting goods or services are produced according to specifications, in amounts and by the schedules demanded and at a minimum cost”.
Production management, thus, is assigned with the following tasks.
- Specifying and accumulating the input resources, i.e., management, men, information, materials, machine and capital.
- Designing and installing the assembling or conversion process to transform the inputs into output, and
- Coordinating and operating the production process so that the desired goods and services may be produced efficiently and at a minimum cost.
The production department in an enterprise is not only concerned with the full exploitation of production facilities but also the human factor that indirectly affects the production, utilization of latest techniques of production and the production of quality goods to the satisfaction of customers of the product.
Scope of Production Management
The various activities that form scope of production function can be studied in the following broad areas:
- Product selection and design: The product mix marks the production system either efficient or inefficient. Choosing the right products keeping the mission and overall objective of the organization in mind is the key to success. It is the design of the product, which makes the organization competitive or noncompetitive.
- Activities relating to production system designing: Decision related to the production system design is one of the most important activities of the production management. This activity is related to production engineering and includes problems regarding design of tools and jigs, the design, development and installation of equipment and the selection of the optimum size of the firm. All these areas require the technical expertise on the part of the production manager and his staff.
- Facilities location: The selection of an optimum plant location very much depends upon the decision taken regarding production engineering. A wrong decision may prove disastrous. Location should as far as possible cut down the production and distribution cost. There are diverse factors to be considered for selecting the location of a plant.
- Method study: The next decision regarding production system design concerns the use of those techniques, which are concerned with work environment and work measurement. Standard method should be devised for performing the repetitive functions efficiently. Unnecessary movements should be eliminated and suitable positioning of the workers for different processes should be developed. Such methods should be devised with the help of time study and motion study. The workers should be trained accordingly.
- Facilities layout and materials handling: Plant layout deals with the arrangements of machines and plant facilities. The machine should be so arranged that the flow of production remains smooth. There should not be overlapping, duplication or interruption in production flow. Product layout where machines are arranged in a sequence required for the processing of a particular product, and process layout, where machines performing the similar processes are grouped together are two popular methods of layout. The departments are layout in such a way that the cost of material handling is reduced. There should be proper choice of material handling equipment.
- Capacity planning: This deals with the procurement of productive resources. Capacity refers to a level of output of the conversion process over a period of time. Full capacity indicates maximum level of output. Capacity is planned for short-term as well as for long term. Process industries pose challenging problems in capacity planning, requiring in the long run, expansion and contraction of major facilities in the conversion process. Tools for capacity planning are marginal costing (Break Even Analysis), learning curves, linear programming, and decision trees.
- Production planning: The decision in production planning include preparation of short-term production schedules, plan for maintaining the records of raw materials, finished and semi-finished stock, specifying how the production resources of the concern are to be employed over some future time in response to the predicted demand for products and services.
- Production control: After planning, the next managerial production function is to control the production according to the production plans because production plans cannot be activated unless they are properly guided and controlled. According to Soriebal and Lansburgh “Production control is the process of planning production in advance of operations; establishing the exact route of each individual item, part or assembly; setting, starting and finishing dates for each important item, assembly and the finished products; and releasing the necessary orders as well as initiating the required follow-up to effect the smooth functioning of the enterprise.
- Inventory Control: inventory control deals with the control over raw-materials, work-in-progress, finished products, stores, supplies, tools, and so is included in production management. The raw materials, supplies etc should be purchased at right time, right quality, in right quantity, from right source and at right price.