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.
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.
