Category: Production Management

Production management, also known as operations management or manufacturing management, is the process of planning, organizing, directing, and controlling. The production process ensures the efficient and effective creation of goods and services. It involves overseeing the conversion of raw materials, labor, and other inputs into finished products that meet customer demands and quality standards.

Key aspects of production management include:

  1. Planning: Production managers develop production plans that outline the objectives, strategies, and resources needed to achieve production targets. This includes determining production schedules, resource allocation, and capacity planning.
  2. Design and Process Engineering: In collaboration with engineers and designers, production managers develop and improve production processes to enhance efficiency and reduce costs while maintaining product quality.
  3. Inventory Management: Production managers are responsible for maintaining optimal levels of raw materials and finished goods inventory to avoid stockouts or overstock situations.
  4. Quality Control: Ensuring product quality is a critical aspect of production management. Quality control measures stand implemented to identify and rectify defects, minimize waste, and maintain consistent product standards.
  5. Workforce Management: Production managers oversee the workforce, including hiring, training, and motivating employees to ensure a skilled and efficient team.
  6. Scheduling and Sequencing: Production managers create production schedules that optimize resource utilization, minimize downtime, and meet delivery deadlines.
  7. Cost Management: Production managers stand tasked with controlling production costs, including labor, materials, and overhead expenses, to ensure profitability.
  8. Health and Safety: Ensuring a safe working environment for employees is a crucial responsibility of them.
  9. Lean Manufacturing and Continuous Improvement: Adopting lean principles and implementing continuous improvement initiatives are common strategies used in them to eliminate waste, enhance productivity, and streamline processes.
  10. Automation and Technology Integration: Production managers may explore the integration of automation. And advanced technologies to improve production efficiency and quality.

Efficient production management is essential for businesses to maintain a competitive edge, deliver products on time, and meet customer demands. It involves a blend of strategic planning, technical expertise, and effective leadership to optimize resources and ensure smooth production processes. By implementing best practices in them, organizations can achieve higher productivity, reduce costs, and enhance customer satisfaction.

  • What are Factors affecting Plant location decisions?

    What are Factors affecting Plant location decisions?

    The factors affecting Plant location decisions; Decisions regarding selecting a location need a balance of several factors. Hardly there is any location which can be ideal or perfect. One has to strike a balance between various factors affecting plant location. Some factors are crucial in deciding the location of the plant while some other factors are less important.

    Here are explains; What are Factors affecting Plant location decisions?

    In taking the decision of the location of the plant, due regard should give to the minimization of the cost of production & distribution and maximization of profit. The decision of plant location should base on nine M’s, namely money, material, manpower, market, motive power, management, machinery, means of communication and momentum to an early start. Also, want to know what is the five M’s in Business?

    What are Factors affecting Plant location decisions
    What are Factors affecting Plant location decisions? #Pixabay.

    The following are some of the important factors which the management must carefully bear in mind in selecting an optimum site for the plant – 15 factors affecting plant location decisions below are;

    Nearness to Raw Material:

    It will reduce the cost of transporting raw material from the vendor’s end to the plant. Especially those plants which consume raw material in bulk, or the raw material is heavyweight, must locate close to the source of raw material. If the raw materials are perishable, the plant is to locate near the source of the material. This is true of the fruit canning industry.

    Sugar and paper and other industries using weight losing materials are also located near the point of supply. Industries which depend for their raw materials on other industries tend to locate near such industries e.g. the petrochemicals industries are locating near refineries. Similarly, Thermal Power Stations are situated near coal mines.

    Sugar Factory Worker
    Sugar Factory Worker #Pixabay.

    In case the raw material is imported, the unit must establish near the port. When a company uses a number of raw materials and their sources are at a different location, the ideal site for the plant shall be a place where the transportation costs of various raw materials are the minimum.

    Apart from these considerations, a promoter must view the supply of raw materials from the following angles also:

    • If the supply of raw materials is linked with finance, it must be set up where the raw material is available at reduced or concessional rates.
    • Reliability and continuity of the source of supply, and.
    • The security of means of transport.

    Nearness to Markets:

    It reduces the cost of transportation as well as the chances of the finished products getting damaged and spoiled in the way. Moreover, a plant being near to the market can catch a big share of the market and can render quick service to the customers. Industries producing perishable or fragile commodities are also attracted to the market because of savings in time and transportation costs. Industrial units have a tendency to disperse if they find a new market for their products.

    Availability of Labor:

    Stable labor force, of the right kind, of adequate size (number) and at reasonable rates with its proper attitude towards work are a few factors which govern plant location to a major extent. The purpose of the management is to face fewer boycotts, strikes or lockouts and to achieve lower labor cost per unit of production.

    Availability of Fuel and Power:

    Because of the widespread electric power, in most cases, fuel (coal, oil, etc.) has not remained a deciding factor for plant location. It is, of course, essential that electric power should remain available continuously, in proper quantity and at reasonable rates.

    Availability of Water:

    Water is used for processing, as in paper and chemical industries, and is also requires for drinking and sanitary purposes. Depending upon the nature of the plant, water should be available in adequate quantity and should be of proper quality (clean and pure). A chemical, fertilizer, thermal power station, etc. should not be set-up at a location which IS famous for water shortage.

    Climatic Conditions:

    Climate conditions also influence the location decision. Some industries need a special type of climate to run the unit effectively. For example, the cotton industry requires a humid climate and therefore it is mainly localizing at Bombay, Ahmedabad, etc.

    But the scientific development and new inventions have lowered down the importance of the factor. So due to the development of artificial humidification, the cotton textile industry can now start in any region of the county. The question of climate is more important for an agricultural product like tea, coffee, rubber, cotton, etc. even today.

    Government Policy:

    Certain states give aid as loans, machinery, built-up sheds, etc. to attract industrialists. In a planned economy, the Government plays an important role in the location of industry. In India Government follows the policy of balanced regional growth of the country which is very important from the point of view of defense and social problems like a slum, the disparity of income & wealth and optimum use of resources.

    On, the order to implement this policy, the Government offers several incentives to entrepreneurs to locate their industrial units in backward regions or no-industry regions. It offers tax concessions or loan facilities or factory sheds at cheaper rates. Sometimes the Government announces certain disincentives to industries located at a certain place. Thus Government policy plays an important role in the location of industry.

    Land:

    The shape of the site, cost, drainage, the probability of floods, earthquakes (from the past history), etc. influence the selection of plant location.

    Community Attitude:

    The success of Industry depends very much on the attitude of local people and whether they want to work or not.

    Security:

    Considerations like law and order situation, political stability and safety also influence the location decision. No entrepreneur will like to start the industry at a place which is not safe and where there are law and order disturbances off and on.

    Transport Facilities:

    A lot of money is spent both in transporting the raw material and the finish goods. Depending upon the size of raw material and finish goods, a suitable method of transportation like roads, rail, water or air is selecting and accordingly the plant location is deciding.

    Transport Truck
    Transport Truck #Pixabay.

    Transportation costs depend mainly on the weight carried and the distance to cover. In some industries, the weight of the raw material is much higher than that of the finished product. e.g. in a weight loss industry like sugar manufacturing, four to five tons of sugarcanes have to carry per ton of sugar.

    Similarly, in Iron and Steel Industry two tons of iron is requiring to produce one ton of pig iron. Therefore the transport costs can save by locating near the source of materials. In the case of weight gaining industry, location near the market may result in savings in transportation costs. e.g. in soft drink, the weight of the finished product is higher than raw material.

    The momentum of an early start:

    Another factor of some importance has been the momentum of an early start. Some places got localized only because one or two units of that industry start production there. With the passage of time, these places gained importance and attracted other units of the industry. As a place gains importance, certain facilities usually beg in to develop.

    For example,

    • Transport facilities are developing because railways and other agencies find it economical to serve those centers.
    • Specialized firms start to take up repair and maintenance job for such units.
    • Banking facilities are made available, and.
    • Labor possessing various skills are attracting there. These facilities further attract more industries.

    Personal Factors:

    Personal preferences and prejudices of an entrepreneur also play an important role in the choice of location. Economic consideration does not weight much. For instance, Mr. Ford started cars manufacturing motor in Detroit because it was his home town. It must, however, recognize that such location cannot endure unless they prove to be economical enough in the long run.

    Communication Facilities:

    Every business firm requires every type of business information regarding the position of labor, market, raw materials, and finished goods and this facility is available only when communication facilities are there. As communications facilities are not adequately available in rural areas, industries are very much reluctant to start their business there.

    What do we think about Plant location decision - with Different Situations - Power Station
    What do we think about Plant location decision? in Different Situations – Power Station #Pixabay.

    Other Considerations:

    There are certainly other considerations that influence the location decisions which are:

    • Presence of related Industry.
    • Existence of hospitals, marketing centers, schools, banks, post office, clubs, etc.
    • Local bye-laws, taxes, building ordinances, etc.
    • Facility for expansion.
    • New enterprise owned or operated by a single group of companies should be so located. That its work can integrate with the work of the associated establishments.
    • Industries like nuclear power stations, processes explosive in nature. The chemical process likely to pollute the atmosphere should locate in remote areas, and.
    • Historical factors etc.
  • What do we think about Plant location decision? in Different Situations

    What do we think about Plant location decision? in Different Situations

    What is Plant location decision? Location of an industry is an important management decision. Location decision is based on the organizations long-term strategies such as technological, mar­keting, resource availability and financial strategies. Plant location refers to the choice of the region where men, materials, money, machinery, and equipment are brought together for setting up a business or factory.

    Here are explain; What do we think about Plant location decision?

    Plant location decisions are very important because once the plant is located at a particular site then the organization has to face the pros and cons of that initial decision. Why we Comparison of Different Production Systems?

    What is a Plant?

    A plant is a place where the cost of the product is kept to low in order to maximize gains. A plant is a place, where men, materials, money, machinery, etc. are brought together for manufacturing products.

    Identifying an ideal location is very crucial, it should always maximize the net advantage, must minimize the unit cost of production and distribution. The objective of minimization of cost of production can achieve only when the plant is of the right size and at the right place where economies of all kinds in production are available.

    The planning for “where” to locate the operations facilities should start from “what” are organization’s objectives, priorities, goals and the strategies required to achieve the same in the general socio-economic-techno-business-legal environment currently available and expected to be available in the long-term future.

    Unless the objectives and priorities of an organization are clear i.e. the general direction is clear, effective functional or composite strategies cannot design. And, it is these strategies of which the location design is a product.

    When Plant location decision in Different Situations, How to chose perfect?

    The following the different situations below are;

    To select a proper geographic region:

    The organizational objectives along with the various long-term considerations about marketing, technology, internal organizational strengths and weaknesses, region-specific resources and business environment, legal-governmental environment, social environment, and geographical environment suggest a suitable region for locating the operations facility.

    Selecting a specific site within the region:

    Once the suitable region is identified, the next problem is that of choosing the best site from an available set. Choice of a site is much less dependent on the organization’s long-term strategies. It is more a question of evaluating alternative sites for their tangible and intangible costs if the operations were located there. Cost economies now figure prominently at this final stage of the facilities-location problem.

    Location choice for the first time:

    In this case, there is no prevailing strategy to which one needs to confirm. However, the organizational strategies have to be first decided upon before embarking upon the choice of the location of the operating facility/facilities. The importance of long-term strategies can not overemphasize. Cost economics is always important but not at the cost of long-term business/ organizational objectives.

    Location choice for an ongoing organization:

    A new plant has to fit into a multi-plant operations strategy as discussed below;

    Plant Manufacturing Distinct Products or Product Lines.

    This strategy is necessary where the needs of technological and resource inputs are specialized fir distinctively different for the different products/product- lines. For example, a high-quality precision product-line should preferably not locate along with other product-line requiring a little emphasis on precision.

    It may not be proper to have too many contradictions such as sophisticated and old equipment, highly skilled and not so skilled personnel, delicate processes and those that could permit rough handling, all under one roof and one set of managers. Such a setting leads to much confusion regarding the required emphasis and management policies. Product specialization may be necessary in a highly competitive market; it may also be necessary in order to fully exploit the special resource potential of a particular geographical area.

    Instances of product specialization could be many: A watch manufacturing unit and a machine tools unit; a textile unit and a sophisticated organic chemical unit; an injectible pharmaceuticals unit and a consumer products unit; etc. All these pairs have to be distinctively different-in technological sophistication, in process, and in the relative stress on certain aspects of management. The more decentralized these pairs are in terms of the management and in terms of their physical location, the better would be the planning and control and the utilization of the resources.

    Manufacturing Plants Each supplying to a Specific Market Area.

    Here, each plant manufactures almost all of the company’s product. This type of strategy is useful where market proximity consideration dominates the resources and technology considerations. This strategy requires a great deal of coordination from the corporate office. An extreme example of this strategy is that of soft-drinks bottling plants. Manufacturing Plants Divided According to the Product/Product Line being Manufactured, and these Special-Product Plants Located in Various Market Areas.

    Plants Divided on the Basic of the Processes or Stages in Manufacturing.

    Each production process or stage of manufacturing may require distinctively different equipment capabilities, labor skills, technologies, and managerial policies and emphasis. Since the products of one plant feed into the other plant, this strategy requires much-centralized coordination of the manufacturing activities from the corporate office who are expecting to understand the various technological and resources nuances of all the plants. Sometimes such a strategy is using because of the defense/national security considerations. For instance, the Ordnance Factories in India.

    Plants Emphasizing Flexibility in Adapting to Constantly Changing Product Needs.

    This needs much coordination between plants to meet the changing needs and at the same time ensure efficient use of the facilities and resources. The new plant or branch-facility has to fit into the organization’s existing strategy, mainly because the latter has been the product of deep thinking about the long-term prospects and problems, and strengths and weaknesses for the organization as a whole.

    What do we think about Plant location decision - in Different Situations - Power Station
    What do we think about Plant location decision? in Different Situations! Power Station #Pixabay.

    Location for an Industrial Plant:

    The principle of Industrial Plant Location is that the sum of manufacturing and distribut­ing cost should be at a minimum for the best location. The first two factors are related to the transportation cost. One should be clear that a plant may locate near the market as well as near the raw materials site. But in actual practice, many times, due to some other factors, it is not possible to locate an industry near the proximity of the market as well as raw material.

    Explain different parts:

    For economical analysis these factors play an important part:

    Following are the factors when an undertaking is located near the raw material site;

    When the source of raw material is likely the controlling factor. Materials are bulky and of relatively low price. Materials are small and of the high unit price. Raw materials are greatly reducing in bulk during the process of manufacture. Raw materials are perishable and the process makes them less perishable. The examples are processing industries, cement, paper, meat, canning (Fruit), etc.

    Factors responsible for locating an industry near the market;

    When the size or bulk of the product is more. Render it more fragile.
    More subsection about the spoilage. Examples are shoes, furniture, glassware industries.

    While dealing with the economy of labor, the factors responsible are;

    The ratio of labor cost to total manufacturing cost. If the ratio is small then this factor is not important. Possibility of a reduction in labor cost by using better methods or better quality of labor. The type of labor required. For example, the textile industries silk and carpet-making industries, sports goods, etc.

    Now for the economy and availability of power;

    This point is similar to raw material procurement. If power is generating from coal, then coal is a raw material. Hence still steel plants are located near the coal-mines etc.

    Another major factor that influences the availability of finance;

    But the finance can obtain from Government agencies. Banks etc. at any place.

    The following factors also influence the layout;

    An offer of a factory site or an existing plant. Subscriptions of the capital stock of the enterprise. A rebate of taxes and the period for which it will remain available. Non-reference by local or government bodies. The location should not be near the border of the country to safeguard from the risk of war. For smooth going, political interference should not be there.

  • Why we Comparison of Different Production Systems?

    Why we Comparison of Different Production Systems?

    Comparison of Different Production Systems; The system relies on a number of important factors like policies of the organization, Types of Production Systems, size of production, etc. However, production methods, organization, activities, and operations differ from company to company. The production system can classify in the following ways: 1) Continuous or Flow Production, and 2) Intermittent Production System.

    Here are explain; How to Comparison of Different Production Systems?

    As we have discussed various systems and sub-systems in detail in the above lines, we can now make a comparative study of them as follows;

    Comparison of Different Production Systems Chat
    Comparison of Different Production Systems Chat

    Manufacturing Cost:

    Cost of production per unit is the lowest in-process production while it is highest in job production because large scale continuous production is carried out under process production. Per unit, the cost is maximum in Job production and minimum in-process production. The four methods of production in increasing order of costs can arrange as process, mass, batch, and job. Unit cost in mass production is higher than the process production while it is lower than the batch production or job production.

    Size and Capital Investment:

    As stated earlier, the scale of operation is small in job production, medium in batch production, large in mass production and very large in-process production. Hence the size of capital investment differs from system to system. Process production calls for higher investment while mass production requires a lesser amount of capital investment. It is lower in case of job production and comparatively higher in batch production. Extra explain each of them;

    1. Capital Investment: The requirement of capital varies according to the nature of the product and the input needs. The systems in ascending order of capital investment can be arranged as a job, batch, mass, and process.
    2. Size of Plant: In job and batch system the same equipment/machine can perform a number of operations to manufacture different type of items. So the size of the plant is likely to smaller than those for mass and process system where the whole production process is to strictly arrange in a predetermined sequence of operations.

    Flexibility in Production:

    In case of a change in demand for the product, the production facilities may adjust very shortly without increasing much expenses under the system of job or batch production. But both the sub-systems of continuous production system i.e., mass production or process production employ single-purpose machine in their manufacturing processes. Job and batch systems can easily adjust to changes in the requirement of the consumer with incurring any heavy expenditure.

    But in the case of mass and process systems we can produce one single product and with the change in demand of products the systems cannot adjust easily. Thus job-batch system using general-purpose machines is more flexible than a mass-process system using single-purpose machines. They cannot adjust their production facilities so quickly and easily as is possible in job or batch production where general-purpose machines are using.

    Required Technical Ability:

    Both job and batch production requires high skilled technical foreman and other executives. Highly skills labor is required in job and batch production to operate and carry out specializes work on machines. In the case of mass and process systems, semi-skilled persons can also operate the machines.

    But due to the large scale of production, more managerial skill is requiring in continuous systems. Under mass production for process production systems, managerial ability plays an important role because it requires the higher ability for planning and coordinating several functions in mass and process production than in the case of job and batch production.

    Organizational Structure:

    A mostly functional organization is adopting in case of job and batch production systems. In job and batch production generally functional organizational approach is adopting whereas divisional organization pattern is using in mass and process systems.

    There is decentralization concept in organization of job and batch whereas centralization is prominent in mass and process systems. On the other hand, the divisional organization is preferred in mass and product process production systems due to the greater emphasis for centralization.

    Job Security:

    Job and batch systems of production do not provide. Any type of job security to workers due to their intermittent character. During odd times, workers particularly upskilling workers are thrown out of a job. On the contrary, mass and process production systems provide greater job security to workers. Because production operations are carrying out continuously in anticipation of stable and continuous demand of the product.

    Job and batch systems produce items only when orders are receiving. During slack periods when there is no or very little demand workers are likely to sack. Job security is the probability that an individual will keep his/her job; a job with a high level of job security is such that a person with the job would have a small chance of losing it. Thus, there is less job security in Job-batch production systems. In mass and process system, items are manufacturing for stock and so production is continuous. Due to this, there is more job security for workers.

    Industrial Application:

    The application of different systems is suitable in different industries depending upon the nature of work. The mechanism of job production applies in products of construction and manufacturing industries like buildings, bridges, special purpose machines, etc.

    Batch production is mostly using in mechanical engineering and consumer-goods industries like cotton, jute, machine tools, shoe-making, etc. Mass production is found in automobiles, sugar refining, refrigerators, electrical goods, etc. Process production is most appropriate in chemical, petroleum, milk processing industries, etc.

    Why we Comparison of Different Production Systems - Toothbrush
    Why we Comparison of Different Production Systems? Toothbrush #Pixabay

    Thus, a comparative view of the different systems of production reveals. That no one system is suitable for all types of industries. And, therefore, each system is different in itself and must be studied with reference to the nature of the industry.

  • Types of Production Systems; Continuous System and Intermittent System

    Types of Production Systems; Continuous System and Intermittent System

    Types of Production Systems; A production manager will have to choose the most appropriate method for his enterprise. The final decision regarding any particular method of production is very much affecting by the nature of the products and the quantity to produce. The types of Production Systems are grouped under two categories viz., Intermittent production system, and Continuous production system.

    Here are explain Types of Production Systems; Continuous System and Intermittent System with their advantage and disadvantage.

    There are two main types of production systems: 1) Continuous System and 2) Intermittent System.

    Types of Production Systems Chart - Continuous and Intermittent
    Types of Production Systems Chart – Continuous and Intermittent

    Continuous System or Flow System:

    According to Buffa,

    “Continuous flow production situations are those where the facilities are standardized as to routings and flow since inputs are standardized. Therefore a standard set of processes and sequences of the process can adopt.”

    Thus continuous or flow production refers to the manufacturing of large quantities of a single or at most a very few varieties of products with a standard set of processes and sequences. The mass production is carried on continuously for stock in anticipation of demand.

    Types of Production Systems Continuous System and Intermittent System
    Types of Production Systems; Continuous System and Intermittent System, #Pixabay.

    Characteristics of Continuous System:

    The following characteristics below are;

    • The volume of output is generally large (mass production) and goods are produced in anticipation of demand.
    • The product design and the sequence of the operations are standardized i.e. identical products are produced.
    • Special purpose automatic machines are used to perform standardized operations.
    • Machine capacities are balanced so that materials are fed at one end of the process and the finished product is received at the other end.
    • Fixed path materials handling equipment is used due to the predetermined sequence of operations.
    • Product layout designed according to a separate line for each product is considered.

    Advantages of Continuous System:

    The following advantages below are;

    • The main advantage of the continuous system is that work-in-progress inventory is minimum.
    • The quality of output is kept uniform because each stage develops skill through repetition of work.
    • Any delay at any stage is automatically detected.
    • Handling of materials is reduced due to the set pattern of the production line. Mostly the materials are handled through conveyor belts, roller conveyors, pipelines, overhead cranes, etc.
    • Control over materials, cost, and output are simplified.
    • The work can be done by semi-skilled workers because of their specialization.

    The disadvantages of Continuous System:

    The continuous system, however, is very rigid and if there is a fault in one operation the entire process is disturbed. Due to continuous flow, it becomes necessary to avoid piling up of work or any blockage on the line. Unless the fault is cleared immediately, it will force the preceding as well as the subsequent stages to be stopped. Moreover, it is essential to maintain stand by equipment to meet any breakdowns resulting in production stoppages. Thus investments in machines are fairly high.

    Types of Continuous System:

    Continuous production is of the following types;

    Mass Production:

    This production refers to the manufacturing of standardized parts or components on a large scale. Mass production system offers economies of scale as the volume of output is large. Quality of products tends to be uniform and high due to standardization and mechanization. In a properly designed and equipped process, individual expertise plays a less prominent role.

    Process Production:

    Production is carried on continuously through a uniform and standardized sequence of operations. Highly sophisticated and automatic machines are used. Process production is employed in the bulk processing of certain materials. The typical processing Industries are fertilizers plants, petrochemical plants, and milk dairies which have highly automated systems and sophisticated controls.

    They are not labor-intensive and the worker is just an operator to monitor the system and take corrective steps if called for. On the basis of the nature of the production process, flow production may classify into Analytical and Synthetic Production.

    • Analytical Process: In the Analytical Process of production, the raw material is broken into different products e.g. crude oil is analyzed into gas, Naptha, petrol, etc. Similarly, coal is processed to obtain coke, coal gas, coal tar, etc.
    • Synthetic Process: Synthetic Process of production involves the mixing of two or more materials to manufacture a product, for instance, lauric acid, myristic acid, stearic acid are synthesized to manufacture soap.
    Assembly Lines:

    Assembly line a type of flow production which is developed in the automobile industry in the USA. A manufacturing unit prefers to develop and employ an assembly line because it helps to improve the efficiency of production. In an assembly line, each machine must directly receive material from the previous machine and pass it directly to the next machine.

    Machine and equipment should be arranged in such a manner that every operator has free and safe access to each machine. Space should be provided for free movement of forklifts, trucks, etc. which deliver materials and collect finished products.

    Intermittent System:

    According to Buffa,

    “Intermittent situations are those where the facilities must be flexible enough to handle a variety of products and sizes or where the basic nature of the activity imposes a change of important characteristics of the input (e.g. change. in the product design). In instances such as these, no single sequence pattern of operations is appropriate, so the relative location of the operation must be a compromise that is best for all inputs considered together.”

    In the industries following the intermittent production system, some components may be made for inventory but they are combined differently for different customers. The finished product is heterogenous but within a range of standardized options assembled by the producers. Since production is partly for stock and partly for consumer demand, there are problems to be met in scheduling, forecasting, control, and coordination.

    Characteristics of Intermittent System:

    The following characteristics below are;

    • The flow of production is intermittent, not continuous.
    • The volume of production is generally small.
    • A wide variety of products are produced.
    • General purpose, machines, and equipment are used so as to be adaptable to a wide variety of operations.
    • No single sequence of operations is used and periodical adjustments are made to suit different jobs or batches.
    • Process layout is most suited.

    The intermittent system is much more complex than continuous production because every product has to be treated differently under the constraint of limited resources.

    The intermittent system can be-effective in situations which satisfy the following conditions:

    • The production centers should be located in such a manner so that they can handle a wide range of inputs.
    • Transportation facilities between production centers should be flexible enough to accommodate a variety of routes for different inputs.
    • It should be provided with the necessary storage facility.

    Types of Intermittent System:

    Intermittent Production May be of two types;

    Job Production:

    Job or unit production involves the manufacturing of a single complete unit with the use of a group of operators and process as per the customer’s order. This is a “special order” type of production. Each job or product is different from the other and no repetition is involved. The product is usually costly and non-standardised.

    Customers do not make a demand for exactly the same product on a continuing basis and therefore production becomes intermittent. Each product is a class by itself and constitutes a separate job for the production process. Shipbuilding, electric power plant, dam construction, etc. are common examples of job production.

    Characteristics of Job Production:
    • The product manufactured is custom-made or non-standardised.
    • The volume of output is generally small.
    • Variable path materials handling equipment are used.
    • A wide range of general-purpose machines like grinders, drilling, press, shaper, etc. is used.
    Advantages of Job Production:

    It is flexible and can adapt easily to changes in product design. A fault in one operation does not result in complete stoppage of the process. Besides, it is cost-effective and time-effective since the nature of the operations in a group is similar. There is reduced material handling since machines are close in a cell. The waiting period between operations is also reduced. This also results in a reduced work-in-progress inventory.

    The disadvantages of Job Production:

    Job shop manufacturing is the most complex system of production e.g. in building a ship thousands of individual parts must be fabricated and assembled. A complex schedule of activities is required to ensure the smooth flow of work without any bottlenecks. Raw materials and work-in-progress inventories are high due to uneven and irregular flow of work. Workloads are unbalanced, speed of work is slow and unit costs are high.

    Batch Production:

    Batch production pertains to repetitive production. It refers to the production of goods, the quantity of which is known in advance. It is that form of production where identical products are produced in batches on the basis of demand of customers’ or of expected demand for products.

    This method is generally similar to job production except for the quantity of production. Instead of making one single product as in case of job production, a batch or group of products are produced at one time. It should be remembered here that one batch of products may not resemble with the next batch.

    It is defined as,

    “The manufacture of a product in small or large batches or lots at intervals by a series of operations, each operation being carried out on the whole batch before any subsequent operation is performed.”

    The batch production is a mixture of mass production and job production. Under it machines turn out different products at intervals, each product being produced for a comparatively short time using mass-production methods. Both job production and batch production are similar in nature, except that in batch production the quantity of product manufactured is comparatively large.

    Advantages of Batch Production:

    The batch production method possesses the following advantages;

    • The work is of a repetitive nature.
    • There is a functional layout of various manufacturing processes.
    • One operation is carried out on the whole batch and then is passed on to the next operation and so on.
    • The same type of machines is arranged at one place.
    • It is generally chosen where trade is seasonal or there is a need to produce a great variety of goods.
    The disadvantages of Batch Production:

    Work-in-progress inventory is high and large storage space is required. Due to frequent changes in product design, no standard sequence of operation can be used. Machine set-ups and tooling arrangements have to be changed frequently. The main problem in batch production is the idle time between one operation and the other. The work has to wait until a particular operation is carried out on the whole batch.

  • Production System Introduction Meaning Definition and Elements

    Production System Introduction Meaning Definition and Elements

    What does mean Production System? Introduction; A system is a logical arrangement of components designed to achieve particular objectives according to a plan. A system may have many components and variation in one component is likely to affect the other components of the system e.g. change in the rate of production will affect inventory, overtime hours, etc. A production system is a computer program typically used to provide some form of artificial intelligence. Which consists primarily of a set of rules about behavior but it also includes the mechanism necessary to follow those rules as the system responds to states of the world.

    Here are explain Production System; Introduction, Meaning, Definition, and Elements.

    The production system is the framework within which the production activities of an organization are carrying out. At one end of the system are inputs and at the other end output. Input and output are linking by certain processes or operations or activities imparting value to the inputs. These processes, operations, or activities may call production systems. Also, The nature of the production system may differ from company to company or from plant to plant in the same firm.

    Meaning of Production System:

    The production system is an industrial system that supports manufacturing and logistics. They also involve flows of raw materials, equipment, and event information, as there’s usually paperwork involved. Also, The limits on a production system include its capacity and the quality of the finished product. You may need to know What is the Production Management?

    Meaning of Production:

    Production can explain as an act of either manufacturing or mining or growing of goods (commodities) generally in bulk for trade. Production is a method employing for making or providing essential goods and services for consumers.

    It is a process that puts intangible inputs like ideas, creativity, research, knowledge, wisdom, etc. in use or action. Also, It is a way that transforms (convert) tangible inputs like raw materials, semi-finished goods, and unassembled goods into finished goods or commodities.

    Meaning of System:

    The system is an arrangement or assembly of inter-dependent processes (activities) that are based on some logic and function. Also, It operates as a whole and is designing (build) intending to achieve (fulfill) some objective or do some work. Huge systems are often a collection (assembly) of smaller sub-systems.

    Definition of Production System:

    They may define as,

    “The methods, procedure or arrangement which includes all functions required to accumulate (gather) the inputs, process or reprocess the inputs, and deliver the marketable output (goods).”

    According to Webster,

    “System is a regularly interacting inter-dependent group of items forming a unified whole.”

    The production system utilizes materials, funds, infrastructure, and labor to produce the required output in the form of goods. Also, Do you know what is the History of Production Management?

    Production System Introduction Meaning Definition and Elements
    Production System; Introduction, Meaning, Definition, and Elements. Asia Pottery circle clay #Pixabay.

    Elements of Production System:

    The following elements are below;

    • Inputs: Inputs are the physical and human resources utilized in the production process. Also, They consist of raw materials, parts, capital equipment, human efforts, etc.
    • Conversion Process: It refers to a series of operations that are performing on materials and parts. Operations may be either manual or mechanical or chemical. Also, Operations convert inputs into output. The conversion process also includes supporting activities, which help the process of conversion. The supporting activities include; production planning and control, purchase of raw materials, receipt, storage and issue of materials, an inspection of parts and work-in-progress, testing of products, quality control, warehousing of finished products, etc.
    • Outputs: Outputs are the products or completed parts resulting from the conversion process. The output generates revenue.
    • Storage: Storage takes place after the receipt of inputs, between one operation and the other, and after the output.
    • Transportation: Inputs are transporting from one operation to another in the production process.
    • Information: It provides system control through measurement, comparison, feedback, and corrective action.

    Hence, we can say that the production system is a union or combination of its three main components viz., Inputs, Conversion Process, and Output. In short, everything which is done to produce goods and services or to achieve the production objective is called a production system.

  • Do you want to know What is the History of Production Management?

    Do you want to know What is the History of Production Management?

    Production Management has become an empirical applied science. History of Production Management; If we assess the past, covering a period of 200 years after Adam Smith, it can observe that total production capacity, as well as productivity, have expanded considerably. Undoubtedly, during this period, we have responded to the expansion of markets and large scale business units by using the concepts of division of labor and progressive mechanization in order to achieve economies of large scale production.

    Here are explain the Brief History of Production Management!

    Production Management; Introduction, Meaning, Function, and Scope. A production is an intentional act of producing something in an organized manner. It is the fabrication of a physical object through the use of men, material and some function which has some utility e.g. repair of an automobile, legal advice to a client, banks, hotels, transport companies, etc.

    The history of production management can study as under:

    Individual Efficiency:

    Fredric W. Taylor studied the simple output-to-time relationship for manual labor such as brick-laying. This formed the precursor of the present day “time- study”.

    Around the same time, Frank Gilberth and his learned wife Lillian Gilberth examined the motions of the limbs of the workers (such as the hands, legs, eyes, etc.) in performing the jobs, and tried to standardize these motions into certain categories and utilize the classification to arrive at standards for time required to perform a given job.

    This was the precursor to the present day “motion study”. Although to this day Gilberth’s classification of movements is using extensively, there have been various modifications and newer classifications.

    Collective Efficiency:

    So far the focus was on controlling the work-output of the manual laborer or the machine operator. The primary objective of production management was that of efficiency-efficiency of the individual operator.

    The aspects of collective efficiency came into being later, express through the efforts of scientists such as Gantt who shift the attention to scheduling of the operations (Even now, we use the Gantt Charts in operations scheduling).

    The considerations of efficiency in the use of materials followed later. It was almost 1930 before a basic inventory model was presented by F. W. Harris.

    Quality Control:

    After the progress of the application of scientific principles to the manufacturing aspects, thought progressed to control over the quality of the finished material itself. So far, the focus was on the quantitative aspects; now it shifted to the quality aspects. ‘Quality’, which is an important customer service objective, came to be recognized for scientific analysis.

    The analysis of productive systems, therefore, now also included the ‘effectiveness’ in addition to efficiency. In 1931, Walter Shewart came up with his theory regarding Control Charts for quality or what is known as ‘process control’. These charts suggested a simple graphical methodology to monitor the quality characteristics of the output and to control it by exercising control over the process.

    In 1935, H.F., Dodge, and H.G. Romig came up with the application of statistical principles to the acceptance and/or rejection of the consignments supplied by the suppliers to exercise control over the quality. This field, which has developed over the years, is now known as ‘acceptance sampling’.

    Production Management Introduction Meaning and Function
    Production Management; Introduction, Meaning, and Function. #Pixabay.

    Effectiveness as a Function of Internal Climate:

    In addition to effectiveness for the customer, the concept of effectiveness as a function of internal climate dawned on management scientists through the Hawthorne experiments which actually had the purpose of increasing the efficiency of the individual worker.

    These experiments show that worker efficiency went up when the intensity of illumination was gradually increased, and even when the intensity of illumination was gradually decreasing, the worker efficiency still kept rising.

    This puzzle could explain only through the angle of human psychology; the very fact that somebody cared, mattered much to the workers who gave increased output. Till now; it was Taylor’s theory of Elementalization of the task and thus the specialization in one task which found much use in Henry Ford’s Assembly Line.

    The advent of Operations Research Techniques:

    The application of scientific techniques in management really received a big boost during the World War II period when the field of Operations Research came into being.

    During this war, the Allied Force took the help of statisticians, scientists, engineers, etc. to analyze and answer, questions such as: What is the optimum way of mining the harbors of the areas occupied by the Japanese? What should be the optimum size of the fleet of the supply ships, taking into account the costs of loss due to enemy attack and the costs of employing the defense fleet?

    Such research about the military operations was termed as Operations Research. After World War II, this field was further investigated and developed by academic institutions; and today, it has become one of the very important fields of management theory.

    Various techniques such as Linear Programming, Mathematical Programming, Game Theory, Queuing Theory, etc. developed by people such as George Dantzig. A. Charnes, W. W. Cooper, etc. have become indispensable tools for management decision-making today.

    The Computer Era:

    After the breakthrough made by Operations Research, another marvel came into being the Computer. Around 1955, IBM developed the digital computer and made it available later on a large-scale basis.

    This made possible the complex and repeated computations involved in various Operations Research and other Management Science techniques. And, definitely added to the spread of the use of Management Science concepts and techniques in all fields of the decision- making.

    Case Study is explained Dell Swot Analysis
    Case Study is explained Dell Swot Analysis, #Pixabay.

    The Production and Operations Management Scenario Today.

    More importantly, the long experience of industrial life, the growth of technology and the rapidly growing availability of its benefits. Have all been changing the value systems all over the world. The concepts of ‘quality of life’, whether expressed explicitly or otherwise, have gained solid ground. The demand for ‘service’ or the ‘state’ utility is fast catching up with the demand for ‘form’ utility.

    Services are becoming as important, if not more, as the availability of physical products. The demand for ‘variety’ in products and services is on the increase. The concepts of ‘customer’ and ‘customer orientation’ are very vital today, as also the definition of the word ‘customer’ itself. The producing workers themselves are a part of the ‘customers’. There is great pressure everywhere to enhance the quality of life in general.

    If in the developed countries there is an increased demand for ‘flexi-time’ (flexible times of working). In India, we have already witnessed the shortening of the traditional six-day week to a five-day week in even traditional organizations such as the Central Government and State Governments. (Of course, the total time of working has remained the same.) In addition to all this, there is the increasing complexity of the space-age economies. The socio-techno-economic scene and the problem of depleting resources.

    Such a complex scenario needs freedom from compartmentalized thinking and integrated consideration of the various factors. That impinges on the production and operations management system. It needs to introduce fresh variables, e.g. that of safety in the external and internal environment and an added emphasis on maintenance. These are the challenges of the production and operations management discipline.

    Do you want to know What is the History of Production Management
    Do you want to know What is the History of Production Management? Coal Production, #Pixabay.

    Production Administration:

    Production is a succession of work elements applied to natural materials with the purpose of transforming these into desired goods and services for the satisfaction of human wants. Thus modem production phenomenon is an evolution and production administration deals with planning and control of various operations and components associated with the production process. However, there are a number of definitions given by different experts of Production administration according to their own experiences.

    The concept can explain by the following definitions:

    According to Frederick W. Taylor, father of scientific management,

    “Functional management consists of division of management work in such a way that every person below the rank of the assistant superintendent has as few responsibilities as possible. If possible the work of each man should be confined to perform a single leading function.”

    The various departments of Production Administration can list as production engineering, production planning, and production control.

  • Top 12 Scope of Production Management; Explain Each!

    Top 12 Scope of Production Management; Explain Each!

    The scope of production management is indeed vast. Commencing with the selection of location, production management covers such activities as the acquisition of land, constructing the building, procuring and installing machinery, purchasing and storing raw materials and converting them into saleable products. Production management is mainly associated with factory management crept with the development of the factory system.

    Here are the Top 12 Scope of Production Management; Explain Each.

    Before the evolution of the factory system, manufacturing activities were carried on by a single person that posed no or very insignificant problem of production and therefore the question of production management did not arise. But with the inception of the factory system, the situation changed and so many problems of production were begun to creep up and necessity arose to tackle with the problems of quality control, layout facilities, meeting the schedules and organization of production activities.

    Thus the scope of production management began to develop. In the early stage, the stress was on controlling the labor costs because labor cost was the major element of the total cost of production. With the continuing development of the factory system, the trend towards mechanization and automation developed and it resulted in the increased costs of indirect labor higher than the direct labor costs.

    So concerns found it difficult to run the business in these circumstances and evolved many controlling devices to regulate the cost of production. They had developed devices like designing and packing of products, indirect labor cost control, production & inventory control, and quality control. Since the level of production has increased tremendously, so many other production problems have added to its scope.

    In the present era of intense competition, the scope of production management is very wide. 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.

    The various activities that form the scope of production function can study in the following broad areas;

    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 the maximum level of output. Capacity is planned for short-term as well as for the 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. Some tools that help us in capacity planning are marginal costing (Break Even Analysis), learning curves, linear programming, and decision trees.

    Production Planning:

    The decisions 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 employ over some future time in response to the predicted demand for products and services.

    Production planning takes a given product or line of products and organizes in advance the manpower, materials, machines, and money required for a predetermined output in a given period of time. Thus, production planning is a management technique which attempts to gain the best utilization of a firm’s manufacturing facilities. It is gained by the integration and coordination of the manpower, machines, materials and plant services employed in the manufacturing cycle.

    Production control:

    After planning, the next managerial production function is to control the production according to the production plans because production plans can’t activate unless they are properly guiding and controlling. For this purpose, the production manager has to regulate work assignment, review work process, check and remove discrepancies, if any, in the actual and planned performances.

    According to Soriegel 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 affect the smooth functioning of the enterprise.”

    Thus production control involves the following stages :

    • Planning: Setting targets of production.
    • Routing: To decide the route or flow-of production activity.
    • Dispatching: To issue materials and authorizations for the use of machines and plant services.
    • Follow-up: It compares the actual production with the targeted production. Deviations are found out and corrected and reasons are investigated.

    Inventory Control:

    Inventory control deals with the control over raw- materials, work-in-progress, finished products, stores, supplies, tools, and so are included in production management. The raw materials, supplies, etc. should purchase at the right time, of the right quality, in the right quantity, from the right source, and at the right price.

    This five ‘R’s consideration enables scientific purchases. Store-keeping is also an important aspect of inventory control. The raw materials, work-in-progress, finished goods, supplies, tools, etc. should store efficiently. The different levels of inventory should manage properly and the issue of materials to departments should make promptly and effectively. Proper records should also keep for various items of inventory control.

    The production manager has to look after the inventory control activities at three levels;

    • Control of inventories such as raw materials, purchased parts, finished goods, and supplies through the inventory control technique.
    • The control of the flow of materials into the plants through the technique of judicious purchasing, and.
    • Control of work-in-progress through production control.

    Quality control:

    The other important decision taken by the production manager concerns quality control. Product quality refers to the composite product characteristics of engineering and manufacturing that determines the degree to which the product in use will meet the expectations of the customers. Quality control can ensure the techniques of inspection and statistical quality control.

    Maintenance and Replacement:

    In this, we cover preventive methods to avoid machine break-downs, maintenance, policies regarding the repair and replacement decisions. Maintenance manpower is to schedule and repair jobs are to a sequence. There are some preventive replacements also. Machine condition is to constantly monitor. Effective maintenance is a crucial problem for India which can help better capacity utilization and make operations systems productive enough.

    Cost Reduction and Control:

    Cost reduction ultimately improves productivity. The industry becomes competitive. Essentially cost reduction and cost elimination are productivity techniques. Value engineering, budgetary control, standard costing, cost control of labor and materials, etc. help to keep costs optimal. All Production decisions are subject to control measures, after receiving proper feedback.

    The control function is exercised over the quantity to produce, the quality expected, the time needed, inventory consumed & carried and costs incurred. Control system is designed after a Due cost-benefit analysis. Controls should selective. A self-controlling cybernetic system though preferable is not possible in all complex industries.

    Environmental changes ultimately affect all the systems of the organization. A dynamic environment makes it compulsory to adopt the production system to the changes in technology and other factors of the environment. Product mix, the composition of products, the introduction of new products, changing the layout system is some of the representative decisions which respond to environmental feedback.

    Product Selection and Design:

    The product mix makes the production system either efficient or inefficient. Choosing the right products, keeping the mission and overall objectives of the organization in mind are the key to success. Design of the product, which gives it enough functional and aesthetic value, is of paramount importance. It is the design of the product which makes the organization competitive or noncompetitive. Value engineering does help to retain enough features while eliminating unnecessary ones.

    Activities Relating to Production System Designing:

    Decision-related to the production system design is one of the most important activities of production management. This activity is related to production engineering and includes problems regarding the 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. The location should as far as possible cut down the production and distribution cost. There are diverse factors to consider 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 the work environment and work measurement. Standard methods should devise for performing repetitive functions efficiently. Unnecessary movements should eliminate and suitable positioning of the workers for different processes should develop. Such methods should devise with the help of time study and motion study. The workers should train accordingly.

    Top 12 Scope of Production Management Explain Each
    Top 12 Scope of Production Management; Explain Each. #Pixabay.

    Facilities Layout and Materials Handling:

    Plant layout deals with the arrangements of machines and plant facilities. The machines should so arrange that the flow of production remains smooth. There should not be overlapping, duplication or interruption in the production flow. Product layout, where machines are arranging in a sequence requiring for the processing of a particular product, and process layout, where machines performing the similar processes are grouping together are two popular methods of the layout.

    The departments are laid out in such a way that the cost of material handling is reducing. There should be a proper choice of materials handling the equipment. These days, computer software is available for planning the process layout (e.g. CRAFT, CORELAP, etc.). Group Technology (G.T.), Cellular Manufacturing Systems (CMS) and Flexible Manufacturing Systems (FMS) have made our concepts of layout planning undergo a tremendous change.

    Apart from these factors, the production system designer should pay full attention to two other important problems, viz. (1) the human factor, i.e., the impact of production systems on the workers operating it and (2) research and development activities. These two problems have a vital impact on production system designing.

  • Production Management; Introduction, Meaning, and Function

    Production Management; Introduction, Meaning, and Function

    Production management (POM) is the management of an organization’s production systems, which converts inputs into the desired product and services. As they define; “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.”

    Discuss each one of Production Management; Introduction, Meaning, and Function.

    They are a process of planning, organizing, directing, and controlling the activities of the production function in an organization to achieve the goals of an organization. A production system takes given inputs which include raw material, people, machines, tools, building, technology, cash, information, and other resources whereas the outputs include the product and services.

    Introduction to Production management:

    They are a branch of management that is related to the production function. Production may refer to as the process concerned with the conversion inputs (raw materials, machinery, information, manpower, and other factors of production) into output (semi-finished and finished goods and services) with the help of certain processes (planning, scheduling, and controlling, etc.) while management is the process of exploitation of these factors of production to achieve the desired results.

    Thus, they are the management which by scientific planning and regulation sets into motion the part of an enterprise to which it has been entrusted the task of actual transformation of inputs into output. They also deal with decision-making regarding the quality, quantity, cost, etc., of production.

    It applies management principles to production. They are part of business management. They also call it “Production Function.” It is slowly being replaced by operations management.

    Meaning of Production Management (POM):

    They refer to the application of management principles to the production function in a factory. In other words, POM involves the application of planning, organizing, directing, and controlling the production process.

    The application of management to the field of production has been the result of at least three developments:

    1. First is the development of the factory system of production. Until the emergence of the concept of manufacturing, there was no such thing as management as we know it. People indeed operated the business of one type or another, but for the most part, these people were owners of the business and did not regard themselves as managers as well,
    2. Essentially stems from the first, namely, the development of the large corporation with many owners and the necessity to hire people to operate the business,
    3. Stems from the work of many of the pioneers of scientific management who were able to demonstrate the value, from a performance and profit point of view, of some of the techniques they were developing.

    Definition of Production Management:

    It is observed that one cannot demarcate the beginning and endpoints of POM in an establishment. The reason is that it is interrelated with many other functional areas of business, viz., marketing, finance, industrial relation policies, etc. Alternately, Production Management is not independent of marketing, financial, and personnel management due to which it is very difficult to formulate some single appropriate definition of Production Management.

    A few definitions of production management are being reproduced hereunder to understand the meaning of the term clearly;

    “Production management then becomes the process of effectively planning and regulating the operations of that part of an enterprise which is responsible for the actual transformation of materials into finished products.”

    The definition seems to be quite incomplete. As it ignores the human factors involved in a production process and lays stress only on the materialistic features.

    Elwood S. Buffa has defined the term in a broader sense as;

    “Production management deals with decision making related to the 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.”

    Thus, POM concern with the decision-making regarding the production of goods and services at a minimum cost according to the demands of the customers through the management process of planning, organizing and controlling. To attain these objectives, effective planning and control of production activities are very essential. Otherwise, the customers shall remain unsatisfied, and ultimately certain activities may have to be closed.

    Tasks of Production:

    POM, 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 assembly or conversion process to transform the inputs into output, and.
    • Coordinating and operating the production process. So, the desired goods and services may produce efficiently and at a minimum cost.
    Production Management Introduction Meaning and Function
    Production Management; Introduction, Meaning, and Function. #Pixabay.

    Functions of Production Management:

    The definitions discussed above clearly shows that the concept of production management is related mainly to the organizations engaged in the production of goods and services. Earlier these organizations were mostly in the form of one-man shops having insignificant problems of managing the productions.

    But with development and expansion of production organizations in the shape of factories more complicated problems like location and layout, inventory control, quality control, routing and scheduling of the production process, etc. came into existence which required more detailed analysis and study of the whole phenomenon. This resulted in the development of POM in the area of factory management.

    In the beginning, the main function of production management was to control labor costs. Which at that time constituted the major proportion of costs associated with production. But with the development of the factory system towards mechanization and automation. The indirect labor costs increased tremendously in comparison to direct labor costs, e.g., designing and packing of the products, production and inventory control, plant layout and location, transportation of raw materials and finished products, etc. The planning and control of all these activities required more expertise and special techniques.

    What to do production functions?

    In modern times POM has to perform a variety of functions, namely:

    • Design and development of the production process.
    • Production planning and control.
    • Implementation of the plan and related activities to produce the desired output, and.
    • Administration and coordination of the activities of various components and departments responsible for producing the necessary goods and services.

    However, the responsibility of determining the output characteristics and the distribution strategy followed by an organization. Including pricing and selling policies are normally outside the scope of POM.

  • Group Technology: Meaning, Definition, Advantages, and Limitations

    Group Technology: Meaning, Definition, Advantages, and Limitations

    What does mean Group Technology? Group technology or GT takes advantage of the similarities of parts and machines in a manufacturing system. In this paper, the classification and clustering approaches to group technology in manufacturing systems are discussed. The mathematical programming formulations for the clustering problem are presented. GT is the important technology among the others and it will play a major role in the factory of the future. So, what is the topic we are going to discuss; Group Technology: Meaning, Definition, Advantages, and Limitations.

    Here are explained; What is the Group Technology? first Meaning, Definition, Advantages, and finally Limitations.

    Meaning of Group technology: GT is a concept that is currently attracting a lot of attention from the manufacturing community. GT offers a number of ways to improve productivity in batch manufacturing. The essence of GT is to capitalize on similarities in recurring tasks. GT is, very simply, a philosophy to exploit similarities and achieve efficiencies grouping like problems.

    Group technology is an approach to organizing manufacture which can be applied in any industry (machining, welding, foundry, press work, forging, plastic molding, etc.) where small-batch variety production is used.

    Discuss of GT list;

    • What is the Group Technology?
    • Meaning of Group Technology.
    • Definition of Group Technology.
    • Advantages of Group Technology, and.
    • Limitations of Group Technology.

    Definition of Group technology:

    The basic approach enables all aspects of manufacturing, from design, through estimating and planning, to production, to be rationalized. It forms the basis for the development of computer-aided procedures and flexible automation. Group technology is a manufacturing philosophy or principle whose basic concept is to identify and bring together related or similar parts and processes, to take advantage of the similarities which exist, during all stages of design and manufacture.

    If parts can be classified into families, and machines arranged into groups, then the handling of parts during manufacture can be easily done by the robot. It must be understood that there exists a relationship between finished products and the parts from which they are made. While assemblies may bear little relation to each other, the sub-assemblies from which they are constructed will exhibit some like features. By exploiting the similarities which exist among such a population of parts, group technology sets out to reduce the time and cost of manufacture.

    “Group technology is the realization that many problems are similar and that, by grouping similar problems, a single solution can be found to a set of problems, thus saving time and effort.”

    Explain the Definition;

    The main theme is thus to identify somehow from the large variety of parts those families which require similar manufacturing operations. Cells are created to manufacture defined types and size ranges of parts. Groups of machines, chosen for each family are situated together in a group layout, in such a way that parts flow from one machine to the next in the sequence of operation.

    It is not necessary for every part to visit each machine, but the machines in a cell should ideally be capable of carrying out all the operations required in the family. It may be remembered that in a functional layout, all like machines are grouped at one place and thus a product has to move a lot of distance in a zig-zag manner. But in a cell layout, various machines are arranged so that product flows from one machine to the next in sequence.

    History of Group Technology:

    Prior to 1913, the era of Henry Ford and his Model T, all machining models were similar to our present job shop techniques with machines laid out usually in lines or blocks of similar machines. The work was loaded onto the machines usually by the manual progress control system. Ford introduced the assembly line and that, in turn, led to automated transfer machines. However, the majority of engineering do not produce items in the quantity that justify such methods and so the jobbing shop philosophy continued.

    GT is mainly coordination of normal good engineering practices. It is impossible to say who first practiced GT. There are reports of it having been used in Germany in the 1930s. In an international Conference held in Stockholm in 1947, the basic groups were explained by C.B.Nanthorst. In Italy, M. Patrignany was an early exponent of this technology. However, little of this appears to have been in English. First published work was from the USSR by S.P.Mitrofanov in 1959 and thereafter subsequent books here published by F.S.Denyanyuk and E.K. Ivanov.

    The first reported work on GT outside Russia was done by a French Forges et Ateliers de Construction Electriques de Jeurmont – and this was about in Machinery in 1962. Subsequently, several British companies conducted considerable work in this field. There have also been considerable studies done by various consultants in the Universities. The significant contribution by J.L.Burbidge in the 1960s led to GT as A total Manufacturing Philosophy.

    Advantages of Group Technology:

    According to Burbidge, the following are the advantages of introducing GT in manufacturing.

    • Short throughput times because machines are closed together.
    • Better quality because groups complete parts and the machines are closed together under one foreman.
    • Lower material handling costs because machines are closed together under one foreman.
    • Better accountability because of machines complete parts. The foreman can be made responsible for costs, quality, and completion by the due date.
    • Training for promotion since GT provides a line of succession because a group is a mini-department.
    • Automation GT is the first evolutionary step in automation.
    • Reduced set up time since similar parts brought together on the same.
    • Morale and job satisfaction since most workers prefer to work in groups.
    • The output is improved due to improved resource utili­sation.
    • Work in progress and finished stock levels are re­duced.
    • Simplified estimating, accounting and work man­agement.
    • Improved plant replacement decisions, and.
    • Improved job satisfaction, morale, and communica­tion.

    Studies were undertaken by N.L.Hyer indicates the following significant savings after implementing GT Snead prepared a summary matrix, listing the benefits listing benefits achieved for the various GT. What is the Definition of Production Management?

    Group Technology Meaning Definition Advantages and Limitations
    Group Technology: Meaning, Definition, Advantages, and Limitations. #Pixabay.

    Limitations of Group Technology:

    Group Technology is a great concept. But all good concepts do have their own limitations and need proper care in their applications for results to be realized in practice.

    The Disadvantages of Group Technology or cellular manufacturing may be as follows.

    • High Cost: The cost of implementation is generally high. This is because an outside consultant is often required since in-house expertise on GT is rarely available. It requires a long set up time and painful debugging.
    • Not Suitable for large Variety of Products: May not be suitable for a factory with a very large variety of products.
    • The entire production of the company cannot be put under the GT and hence GT will have to coexist with the conventional layouts.
    • Not suits all Applications: There are too many GT codes in used and there is no one GT code that suits all applications.
    • It is often difficult to conceive all the operations for a group of components being taken care of in the cell created for it.
    • The range of product mix in a plant may be under constant change in which case the GT cells may need a constant revision which is impractical.
    • The additional cost of implementation of this system.
    • The rate of change in product range and mix.
    • Difficulties with out-of-cell operations, and.
    • Coexistence with non-cellular systems.

    How to Uses of Group Technology in the Company for Production?

    Survey of product and use of group technology:

    Group technology technique can be conveniently followed using a classification system. In an assembly, a variety of parts exist. These varieties of parts can be-segregated in three broad areas, viz.

    • Standard and proprietary parts (like nuts, bolts, screws, keys, washers, etc.)
    • Similar parts (like shafts, gears, bearings, levers, etc.)
    • Product specific parts (like gearbox, bed, saddle, etc.)

    It may be noted that the group technology is not concerned with categories (i) and (iii) but relates to category (ii). The aim thus is to group the range of parts under the category (ii) in some way, for the purpose of manufacture. Several types of classification systems have been devised and one has to carefully consider the system based on his needs.

    An organization with a wide range of products needs a complex detailed system but the same is not good for the one dealing with a limited range. Provision should always be made for future likely growth and classification system chose must keep this requirement in view.

    Organizational suitability for Group Technology:

    The suitability of a firm for the introduction of GT depends on several factors. The survey of Willey and Dale give a tentative description of a company profile likely to achieve. The greatest benefits from GT, some of these are:

    • The company must be a relatively small organization with reasonably small machine tools, and manufacturing equipment.
    • The company should not be typified by either large or small component variety.
    • The batch sizes and the batch size range of products of the companies it is relatively small.

    Athersmith and Crookall Rajagopal and Smith Gupta Andand Grayson have suggested. Another way of finding out the suitability of GT for a batch production industry. Computer simulation has been used by the effect of the introduction of GT in the batch production. Industries based on the parameters such as throughput time. WIP inventory and plant utilization Further GT are considered a desirable stepping stone for establishing Just-In-Time production.

  • Bullwhip Effect in Supply Chain Management

    Bullwhip Effect in Supply Chain Management

    What is the Bullwhip Effect? Understanding the meaning, definition, concept, Eliminating, and Causes in Supply Chain Management!

    Meaning: The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain. The meaning, definition, concept, Eliminating, and Causes, Explains Bullwhip Effect in Supply Chain Management. The concept first appeared in Jay Forrester’s Industrial Dynamics (1961) and thus it is also known as the Forrester effect. The bullwhip effect can be explained as an occurrence detected by the supply chain where orders sent to the manufacturer and supplier create larger variance than the sales to the end customer.

    The bullwhip effect was named for the way the amplitude of a whip increases down its length. The further from the originating signal, the greater the distortion of the wave pattern. In a similar manner, forecast accuracy decreases as one moves upstream along the supply chain. These irregular orders in the lower part of the supply chain develop to be more distinct higher up in the supply chain. This variance can interrupt the smoothness of the supply chain process as each link in the supply chain will over or underestimate the product demand resulting in exaggerated fluctuations. Who are the Users of Accounting Information inside the Organization?

    The Concept of Bullwhip Effect in Supply Chain Management

    The problem of the Bullwhip effect in supply chain management has always been a concern for many years. Due to its non-industry specific nature, it has grabbed the attention of many professionals from diverse industries and business schools. Bullwhip effect as its name suggests is an oscillation in the chain or pipeline. In the supply chain, this effect occurs when there is a constant fluctuation in the demand. In-congruence in the information leads to its distortion thereby creating a bullwhip. The expression “Bullwhip Effect” was termed by executives of P&G, the company that manufactures Pamper brand of diapers.

    These executives observed that while the consumer demand for Pamper’s Diapers was fairly constant over time, the orders for diapers placed by retailers to their wholesalers or distributors were quite variable i.e., exhibited significant fluctuations over time. In addition, even larger variations in order quantities were observed in the orders that P&G received from its wholesalers. Also, read it The Motivated Personality born in India They inspire Always.

    This increase in the variability of the orders seen by each stage in a supply chain was called the bullwhip effect. This situation of misalignment in the supply chain can be termed as ‘Asymmetric Information’ where different parties having different states of private information about demand conditions, products, and the chain operations. The problem of this asymmetry arises because participating firms generally lack the knowledge required about each other’s plans and intentions to adequately harmonize their services and activities.

    Supply chain members often do not wish to share their private information completely and faithfully with all others due to the profitability of that actual or perceived information. Thereby the whole supply chain suffers from sub-optimal and opportunistic behavior. These decisions occur when the members don’t have sufficient visibility to resolve various trade-offs in decision making because lack of information causes decisions to be made in a narrow scope that cannot ensure that products flow properly to end customers. Moreover, with limited information sharing, members don’t have consistent perceptions of market needs and visibility over performance at the other levels of the supply chain.

    As a consequence, decisions are made based on either the best estimation of the available data or an educated guess. Such decisions can be biased and prevent the individual member from attaining the optimal solution of the supply chain. For example, the manufacturer often uses incoming orders with larger variance and not sales data from the retailer as a signal about the future product demand. Asymmetric information also produces problems of the vulnerability of opportunistic behavior. Specifically, adverse selection and moral hazard manifest themselves in the relationship between the supply chain members.

    The negative selection of adverse selection, for example, is that the member firms cannot optimize supply chain performance because they don’t possess the required capability to meet the predetermined customer service level. To explain this effect a very simple example of the two-tier supply chain, a retailer and a manufacturer, can be taken into account. The retailer observes customer demand and places orders to the manufacturer. For determination of the order quantity to place with the manufacturer, the retailer will use the observed demand data of customer and a demand forecasting technique. In the 2nd stage, the manufacturer plays his role of forecasting by observing the retailers demand to place the order with his suppliers.

    In many supply chains, the manufacturer doesn’t have access to customer’s demand data thereby making him rely on the retailer’s data to forecast. As the bullwhip effect implies (the orders placed by the retailer are significantly more variable than the customer demand observed by the retailer), the manufacturer’s forecasting and inventory control problem will be much more difficult than the retailer’s forecasting and inventory control problem. In addition, the increased variability will force the manufacturer to carry more safety stock or to maintain higher capacity than the retailer in order to meet the same service level as the retailer.

    What Contributes to the Bullwhip Effect?

    There are many factors said to cause or contribute to the bullwhip effect in supply chains; the following list names a few:

    • Free return policies: Customers may intentionally overstate demands due to shortages and then cancel when the supply becomes adequate again, without return forfeit retailers will continue to exaggerate their needs and cancel orders; resulting in excess material.
    • Demand information: Relying on past demand information to estimate current demand information of a product does not take into account any fluctuations that may occur in demand over a period of time.
    • Price variations: Special discounts and other cost changes can upset regular buying patterns; buyers want to take advantage of discounts offered during a short time period, this can cause uneven production and distorted demand information.
    • Order batching: Companies may not immediately place an order with their supplier; often accumulating the demand first. Companies may order weekly or even monthly. This creates variability in the demand as there may, for instance, be a surge in demand at some stage followed by no demand after.
    • Lack of communication between each link: in the supply chain makes it difficult for processes to run smoothly. Managers can perceive a product demand quite differently within different links of the supply chain and therefore order different quantities.
    • Disorganization between each supply chain link: with ordering larger or smaller amounts of a product that is needed due to an over or under reaction to the supply chain beforehand.

    Eliminating Bullwhip Effect in Supply Chain Management

    Following are a set of efficient countermeasures that were designed to minimize the negative effects of the Bullwhip effect;

    1. Avoid multiple demand forecast updates.
    2. Eliminate gaming in shortage.
    3. Stabilize prices, and.
    4. Break order batches.

    However, we have to admit that the above-mentioned measures of reduction of the Bullwhip effect are not exhaustive and cannot fully eliminate the existence of this effect.

    Countermeasures of Bullwhip Effect in Supply Chain Management

    Actual demand for a product is influenced by several factors such as competition, prices, weather conditions, technological developments, and consumers’ general confidence. These would be considered external and unmanageable factors. There are other uncertainties involved as well that can have an effect on the supply chain such as problems in delivery time due to production machine failures. Techniques to lessen or curtail the bullwhip effect would be to understand and recognize who or what is suggesting the variations in demand. Is it the retailer, manufacturer, the customer, or the distributor? The key element to eliminating this setback is being aware of where the demand changes are beginning. Techniques that can be used or put into place to reduce the bullwhip effect is sharing information along the supply chain, Vendor Managed Inventory (VMI), and managing e-business.

    The most obvious way to reduce the bullwhip effect is to improve communication and forecasting along the supply chain. Master Data Management (MDM) is can be looked at to integrate all data in an organization at the highest level, both internally and externally. One of the most notable examples of information sharing is between large manufacturers and retailers. Inventory if properly managed, it can increase profits and efficiency. The implementation of a Vendor-Managed Inventory (VMI) initiative would be a key factor in improving and controlling the bullwhip effect. VMI indicates that the vendor, usually a distributor, maintains the inventories for manufacturer or buyer and in turn will reduce warehouse costs for suppliers. VMI alleviates uncertainty of demand and replenishment decisions can be made according to operating needs, and also has heightened awareness of trends in demand. E-commerce brings about new opportunities to improve the performance of the supply chain. The primary advantages of internet utilization are speed, decreased costs, the potential to shorten the supply chain, and flexibility.

    Electronic marketplaces provide for more efficient resource allocation, better information flow, and dissemination on products and services in the supply chain. Electronic data interchange (EDI) can be implemented to help supply chain managers in reducing misleading signals sent from sales and marketing (distribution). Enterprise resource planning (ERP) is one of the most successful tools for managing supply chains. ERP is software that integrates the planning, management, and use of all sources in the entire enterprise. The major objective is to integrate all departments and functional information flow across a company onto a single computer system that can serve all of the enterprise’s needs.

    A plan created from an SCM system that allows companies to quickly assess the impact of their actions on the entire supply chain, including customer demand, can only be done with the integration of ERP software. ERP and SCM can help alleviate the bullwhip effect across the supply chain by having a shared understanding of what needs to get done, managing the variations in the organization, communication among all that are involved especially top management, and having single control of replenishment or VMI can overcome inflated demand forecasts. Long lead times should also be reduced where it is reasonably beneficial.

    Causes of Bullwhip Effect in Supply Chain Management

    There are four main causes behind building up of bullwhip effect in the supply chain.

    These causes are:

    1. Demand Forecasting.
    2. Order Batching.
    3. Rationing and Shortage Gaming, and.
    4. Price Fluctuation.

    From the above information, it is clear enough that all the factors or elements resulting in bullwhip effect originate from a common ground i.e. information sharing. Case Study of International Marketing Strategy in PepsiCo. It is evident enough that the lack of information and interaction between different stages evolve bullwhip in the system thereby plaguing the whole Supply Chain.

    Bullwhip Effect in Supply Chain Management
    Image Credit from ilearnlot.com.