Production Management with it's objectives and functions

Production Management with it's objectives and functions

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  PRODUCTION MANAGEMENT A Presentation By: AbhijeetGupta (140110111001) Darshak Padsala (140110111008) Hiren Patel (140110111035) Prerak Trivedi (140110111045)
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  CONTENT ▪ Introduction ▪ Whatis Production Management? ▪ Objectives ▪ Why is Production Management required? ▪ Functions ▪ What does Production Management actually do?
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  WHAT IS PRODUCTIONMANAGEMENT? ▪ Production Management refers to the application of management principles to the production function in a factory. In other words, production management involves application of planning, organizing, directing and controlling the production process. ▪ Production Management 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. -Mr. E.L. Breech
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  WHY IS PRODUCTIONMANAGEMENT REQUIRED? ▪ Production Management is a necessity for every firm. It is so because:  Accomplishment of firm's objectives  Reputation, Goodwill and Image  Helps to introduce new products  Supports other functional areas  Helps to face competition  Optimum utilisation of resources  Minimises cost of production  Expansion of the firm
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  ▪ Accomplishment offirm's objectives ▪ Production management helps the business firm to achieve all its objectives. It produces products, which satisfy the customers' needs and wants. So, the firm will increase its sales. This will help it to achieve its objectives. ▪ Reputation, Goodwill and Image : ▪ Production management helps the firm to satisfy its customers. This increases the firms reputation, goodwill and image. A good image helps the firm to expand and grow.
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  ▪ Helps tointroduce new products ▪ Production management helps to introduce new products in the market. It conducts Research and development (R&D). This helps the firm to develop newer and better quality products. These products are successful in the market because they give full satisfaction to the customers. ▪ Supports other functional areas : ▪ Production management supports other functional areas in an organisation, such as marketing, finance, and personnel. The marketing department will find it easier to sell good-quality products, and the finance department will get more funds due to increase in sales. It will also get more loans and share capital for expansion and modernisation. The personnel department will be able to manage the human resources effectively due to the better performance of the production department.
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  ▪ Helps toface competition ▪ Production management helps the firm to face competition in the market. This is because production management produces products of right quantity, right quality, right price and at the right time. These products are delivered to the customers as per their requirements. ▪ Optimum utilisation of resources ▪ Production management facilitates optimum utilisation of resources such as manpower, machines, etc. So, the firm can meet its capacity utilisation objective. This will bring higher returns to the organisation.
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  ▪ Minimises costof production ▪ Production management helps to minimise the cost of production. It tries to maximise the output and minimise the inputs. This helps the firm to achieve its cost reduction and efficiency objective. ▪ Expansion of the firm ▪ The Production management helps the firm to expand and grow. This is because it tries to improve quality and reduce costs. This helps the firm to earn higher profits. These profits help the firm to expand and grow.
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  PRODUCTION MANAGEMENT ISFOR EVERYONE ▪ Production Management is not only for the firm. It is also beneficial for the customers and the society. ▪ This is how it is beneficial:  Higher standard of living  Generates employment  Improves quality and reduces cost  Spread effect  Creates utility  Boosts economy
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  ▪ Higher standardof living ▪ Production management conducts continuous research and development (R&D). So they produce new and better varieties of products. People use these products and enjoy a higher standard of living. ▪ Generates employment ▪ Production activities create many different job opportunities in the country, either directly or indirectly. Direct employment is generated in the production area, and indirect employment is generated in the supporting areas such as marketing, finance, customer support, etc
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  ▪ Improves qualityand reduces cost ▪ Production management improves the quality of the products because of research and development. Because of large-scale production, there are economies of large scale. This brings down the cost of production. So, consumer prices also reduce. ▪ Spread effect ▪ Because of production, other sectors also expand. Companies making spare parts will expand. The service sector such as banking, transport, communication, insurance, BPO, etc. also expand. This spread effect offers more job opportunities and boosts economy.
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  ▪ Creates utility ▪Production creates Form Utility. Consumers can get form utility in the shape, size and designs of the product. Production also creates time utility, because goods are available whenever consumers need it. ▪ Boosts economy ▪ Production management ensures optimum utilisation of resources and effective production of goods and services. This leads to speedy economic growth and well- being of the nation.
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  WHAT DOES PRODUCTION MANAGEMENTDO?
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  ▪ Selection ofProduct and Design ▪ Production management first selects the right product for production. Then it selects the right design for the product. Care must be taken while selecting the product and design because the survival and success of the company depend on it. The product must be selected only after detailed evaluation of all the other alternative products. After selecting the right product, the right design must be selected. The design must be according to the customers' requirements. It must give the customers maximum value at the lowest cost. So, production management must use techniques such as value engineering and value analysis. ▪ Selection of Production Process ▪ Production management must select the right production process. They must decide about the type of technology, machines, material handling system, etc. ▪ Selecting Right Production Capacity ▪ Production management must select the right production capacity to match the demand for the product. This is because more or less capacity will create problems. The production manager must plan the capacity for both short and long term's production. He must use break-even analysis for capacity planning.
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  ▪ Production Planning ▪Production management includes production planning. Here, the production manager decides about the routing and scheduling. Routing means deciding the path of work and the sequence of operations. The main objective of routing is to find out the best and most economical sequence of operations to be followed in the manufacturing process. Routing ensures a smooth flow of work. Scheduling means to decide when to start and when to complete a particular production activity. ▪ Production Control ▪ Production management also includes production control. The manager has to monitor and control the production. He has to find out whether the actual production is done as per plans or not. He has to compare actual production with the plans and finds out the deviations. He then takes necessary steps to correct these deviations. ▪ Quality and Cost Control ▪ Production management also includes quality and cost control. Quality and Cost Control are given a lot of importance in today's competitive world. Customers all over the world want good- quality products at cheapest prices. To satisfy this demand of consumers, the production manager must continuously improve the quality of his products. Along with this, he must also take essential steps to reduce the cost of his products.
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  ▪ Inventory Control ▪Production management also includes inventory control. The production manager must monitor the level of inventories. There must be neither over stocking nor under stocking of inventories. If there is an overstocking, then the working capital will be blocked, and the materials may be spoiled, wasted or misused. If there is an understocking, then production will not take place as per schedule, and deliveries will be affected. ▪ Maintenance and Replacement of Machines ▪ Production management ensures proper maintenance and replacement of machines and equipments. The production manager must have an efficient system for continuous inspection (routine checks), cleaning, oiling, maintenance and replacement of machines, equipments, spare parts, etc. This prevents breakdown of machines and avoids production halts.