What is production management?
It means managing the production resources to make the highest quantity, at the lowest cost and with superior production quality. Managing production aims at achieving the highest level of efficiency and productivity by making the best use of the enterprise’s resources. Efficiency results from efficient utilization of capacity, quality, cost, profitability and meeting the customers’ requirements. Factors that influence the level of efficiency and productivity include the market and business forces, leadership, people, money and technology.
Choose the right technology
You choose the technology that best meets your business plans and market needs. Chosen production technology plays a significant role in supporting the business plan, meeting customer needs and strengthening the competitive position of the company in the marketplace. Many factors determine the suitability of the production technology including the type, automation level, flexibility, cost, integration with existing machinery, maintenance costs, and the capability to meet the evolving customers’ needs. The best way to choose the production technology to your plant is meeting technology suppliers to inspect their technologies or asking experts about technology suppliers or inspecting plants that invested in technologies. Besides, visiting technology exhibition can result in useful information about the latest technologies and suppliers.
Appoint competent workforces
The production workforce is a significant resource in improving the efficiency and productivity of the production floor. You can reach higher efficiency by appointing, developing and managing competent staff to achieve business and employment targets.
Develop operating system
These are the processes, procedures, policies and work instructions required to carry out the production activities. You can reach higher efficiency by developing operating system and training the workforce to implement it. Keep the operating system accessible to the production workforce and improve the system regularly to meet both production and market needs.
Meet the customer needs
Production facilities exist to meet the customer needs; therefore, you need to set up the production facilities to best meet these needs and enable the firm to stand out from the crowd in the marketplace. Customer needs are the product specification, delivery schedule, channel, price, quality and more. Meeting the customer needs keeps the plant operating at greater capacity utilization and best using resources.
Reduce the production cost
Expensive production facilities result in higher selling prices, which weakens the competitive position of the business and slows down sales. The cost of any facility is an expense and recorded in the income statement of the firm and must be offset by revenue to make a profit. Owners choose facilities that lead to higher capacity, meet the needs of customers and support the business plan of the company. The cost of the technology and its reflection on the production cost of products must be viewed on the bases of the cost and benefits, and expensive technology can be justified if the firm can use it to increase its capacity utilization and sales. Higher production cost results from either the higher cost of materials, the cost of machinery and factory overheads, poor capacity utilization and ineffective utilization of resources. As a result, the costs and prices of products rise, and the chances to sell more quantity get crippled. Thus, the best way to boost efficiency is to cut down the production cost and improve the competitive position of the firm to sell more. When a plant grows sales, this will cause an increase of production outputs, decrease the cost of products, reduce selling prices and increasing sales.
Planning is a vital tool to improve efficiency and productivity, as it makes the best usage of resources to meet the market needs. Increase efficiency and productivity involve planning activities, investing in breakthrough technology, running at higher capacity utilization, eliminating wastes, training and managing the workforce, improving quality and meeting the customers’ needs.
Monitor and control
It is a process of measuring and checking production performance on regular bases. This system can help the management to generate and check production reports, eliminate production wastes and better meeting the customers’ requirements. Besides, such a monitoring and controlling system lead to improving efficiency and productivity of a firm by aligning results with set targets of efficiency on a regular base.
This article is extracted from my new book- Mastering Enterprise Skills for Potential Entrepreneurs, which can be found on www.amazon.co.uk. If you want to receive more information about the book and our activities, you can register in our newsletter by using this link.
Prepared by Munther Al Dawood
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