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PRODUCTION MANAGEMENT

PRODUCTION MANAGEMENT. INTRODUCTION. There are four functional areas in a business organization- PRODUCTION,MARKETING,FINANCE and PERSONNEL.

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PRODUCTION MANAGEMENT

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  1. PRODUCTION MANAGEMENT

  2. INTRODUCTION There are four functional areas in a business organization- PRODUCTION,MARKETING,FINANCE and PERSONNEL. Production is the basic activity of all industrial units. All other functions revolve around this function. The activities of production are independent of the size of the undertaking. In a small concern one person may be undertaking this function whereas in large organizations this activity may be undertaken by various individuals or separate teams.

  3. According to E.S. Buffa, “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.” According to H.A. Harding, “Production management is concerned with those processes which convert the inputs into the outputs. The inputs are various resources like raw materials, men machines, methods, etc. and the outputs are goods and services.” 

  4. OBJECTIVES OF PRODUCTION MANAGEMENTProduction is an organised activity of a manufacturing organisation. Every organisation tries to identify its objectives to see the degree of their attainment.The identification of objectives increases the conciousness of personnel working in the organisation since their performance is to be judged against the objectives.The objectives of production management nay be classified under two categories i.e. primary objectives and secondary objectives.

  5. PRIMARY OBJECTIVES 1.Controlling Manufacturing Costs-The primary objective of production function is to produce goods and services as per the predetermined cost.The costs should be segregated into direct costs and variable costs. Efforts should be made in the following direction:- 1.Fixed cost should be reduced.It will reduce the cost per unit. 2.Variable cost should be reduced. 3.Volume of production should be increasedso as to reduce the cost of production per unit. 4.The allocation of fixed overheads should be made on scientific bases.

  6. 2.Product Quality- The product quality standards are established by the product specifications or by the consumers.The consumer is now more informed so he is becoming quality concious.A consumer may be willing to pay more for a good quality product. The income levels of people are also rising in the last some years due to economic policies of the govt. This has also helped in raising the purchasing power of the consumers. The buyers are certainly prefering good quality products without giving much importance to price factor. So maintaing proper quality of goods and services has become essential in the present competitive markets. 3.Maintaining Time Schedule- Maintaining of manufacturing time schedule is very important for meetin marketing commitments. The manufacturing schedule should be so planned that the product is ready for sale before the demand peaks. The evolving concept of just in time (JIT) will help in maintaining production schedule. The timely schedule will directly affect the cost, quality and goodwill of the bussiness.

  7. 4. Proper Quantity Of Production- A decision should be taken about the exact quantity to be produced. Higher quantity produced may help in reducing cost per unit but may add to storage costs too. The cost factor will certainly be influenced by the quantity produced. At the same time, selling cost should also be taken into account while fixing the production schedules. So appropriate production figures will help in taking benefit of marketing opportunities and production costs.

  8. SECONDARY OBJECTIVES 1. Human Asset- Human resource is one of the important aspects of production system. No production system can work without the help of men. Even a technologically advanced system will need persons to run it. So human resource planning is essential for running a production system smoothly. Human resources should be taken as an asset for a system instead of taking it only as an expenditure item. So production management should aim to select, maintain and motivate a work force which will help in achieving its production targets.

  9. 2. Materials- Material is one of the important inputs for a production system. Materials may account to over 60% of production cost. So material management should be given due weight age in production management. Proper material management will help in controlling cost of production. Emphasis should be given to following aspects: 1.The quantity and quality of materials required should be properly decided. 2.Material should be purchased at reasonable prices. 3.There should a minimum and maximum levels of material to be maintained. 4.Materials should be available at the times these are needed and in adequate quantities. 5.Material supplies should be continuous.

  10. TYPES OF PRODUCTION There can be many methods of production. A production manager have to choose an appropriate method of his unit. The nature of project and quantity to be produced should be taken into account while selecting a particular method.

  11. PRODUCTION METHODS

  12. JOB PRODUCTION • Job production involves the procedure of manufacturing a product according to a specific customer order. • The products manufacture are generally non standardised and heterogeneous in nature. • It consists of bringing together of material, parts and components, in order to assemble a single piece of equipment .Ship building, dam construction ,book printing are some of examples of job production.

  13. CHARACTERISTICS • A wide range of general purpose machines are required. • A wide range of workforce is required. • There may be variations in production. • A large inventory of materials, parts, tools and items will be required. • The setting of machines and equipment will have to be adjusted and readjusted to the manufacturing needs.

  14. LIMITATIONS • There is an irregularity in demand for some products. • There may be an inefficient use of labour and equipment . • Scientific assessment of costs is difficult under the costing . • The advantages of large scale production may not be achieved because production is done in short runs .

  15. BATCH PRODUCTION • It refers to production of goods ,the quantity of which is known in advance. Under batch system the work is divided into operations and one operation is done at a time. • After completing the work on one operation it is passed on to the next operation and so on till the product is complete. • A company wants to manufacture 50 electric motors .The work will be divided into different operations. The first operation on all the motors will be completed in the first batch and then it will pass on to the next operation .The second group of operators will complete the second

  16. Operation before passing to the next and so on. MERITS • Fewer machines are required as machine utilisation is better. • Specialised supervision is possible. • The specialised work increases production and lowers overhead expenses . • It gives job satisfaction to operatives.

  17. DEMERITS • It becomes difficult to decide a proper batch lot. • A decision regarding sequence of batches is also a problem. • Production time is generally longer. • Considering the variety, skills of higher order is necessary. • Work-in-progress ties up large capital and space. • Material handling is longer.

  18. FLOW PRODUCTION • It refers to production on a large scale to provide a continuous supply . • The manufacturing process is broken into separate operations .the product completed at one operation is automatically passed on to the next till it is complete . • Flow production is the manufacture of a product by a series of operations, each article going on to a succeeding operation as soon as possible. • There is no time gap between the work done at one process and the starting to the next .

  19. MERITS • There will be accuracy in product design and quality . • It will help in reducing direct labour cost. • A weakness in any operation comes to notice immediately . • Since flow if work is simplified there will be less need for control. • There will be no need of keeping work-in-progress as products will automatically pass on from operation to operation.

  20. DEMERITS • The failure of one machine affects the flow of work at all machines. • The production speed is determined by the slowest machines. • It requires general rather specific supervision. • This method is capital intensive since it requires installation of special type of machine. • Less flexibility as in case of change of design, many changes will have to be undertaken.

  21. SCOPE OF PRODUCTION MANAGEMENT Production management is mainly concerned with production activities. Production management covers following major activities: • Designing the products and packages • Production administration: It consists of following specialised parts of production activity: • Production engineering • Production planning • Production control

  22. 3.Execution of plans, policies and decisions. 4. Dependent Services: It includes the following production activities: • Standardisation • Simplification • Specialisation • Quality Control • Inspection • Research and development • Diversification

  23. PROBLEMS OF PRODUCTION MANAGEMENT • Location of plant • Layout of a plant • Production design • Inventory and production control • Problem of quality control • Problem of labour control • Problem of cost control • Socio-economic environment

  24. BENEFITS OF EFFECTIVE PRODUCTION MANAGEMENT • Benefits to consumers • Benefits to investors • Benefits to employees • Benefits to suppliers • Benefits to community • Benefits to nation

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