Department of B.B.

Second year

Production and material management

Unit-1

Production

Introduction:-

Production is the process of combining various material inputs and immaterial inputs
(plans, knowledge) in order to make something for consumption (output). It is the act of creating an
output, a good or service which has value and contributes to the utility of individuals.

Principles of production:

6 Principles of Production Planning:

Customer Demand
Before you can plan to assign resources, you have to know how much to produce.
Production planning focuses on the principle of meeting the targeted customer demand rate in the
most efficient way possible while keeping open the capability to respond to variations in demand.

Materials
To fulfil your production target, the materials availability needed to produce
should be ensured. The most efficient production planning keeps the minimum materials as
standard inventory. Planners should evaluate how much material the company needs, the lead times
for orders, the delivery times for suppliers and the reliability of the supply.

Equipment’s
The production planner takes into account the capabilities of the equipment used
to produce the output. Basic stability of equipment comprising of availability (A), performance (P)
and quality (Q) parameters can be determined by Overall Equipment Effectiveness (OEE).

Manpower
Manpower planning requires accurately estimating the number of employees
required to do the work. The capacity of the workforce has to match the capabilities of the
equipment to plan for the highest efficiency.

Processes
Effective production planning makes sure that the processes used for the output
continue to operate efficiently and safely. Often the normal operation of a process requires
occasional testing and adjustments.

Controls
 A final production planning principle puts in place controls that detect problems
as soon as they occur. Verification of inventory, use of qualified suppliers and personnel,
standardization where possible. When controls are in place, it enables to take possible corrective
actions to minimize the effects and return production to the required levels.

The 5 P’s of management provide such a framework.

The 5 Ps are:

1) Plan,

2) Process,

3) People,

4) Possessions, and

5) Profits.

Planning is the key to the success of an organization.

Role of production manager:-

A Production Manager is a professional who oversees the production process and

coordinates all activities to ensure enough resources on hand. They can plan workers’ schedules,
estimate costs and prepare budgets to ensure workflow meets required deadlines.

Production managers ensure that manufacturing processes run reliably and efficiently.

Responsibilities of the job include:

*Planning and organising production schedules

*Assessing project and resource requirements

*Estimating, negotiating and agreeing budgets and timescales with clients and managers

*Ensuring that health and safety regulations are met

*Determining quality control standards

*Overseeing production processes

*Re-negotiating timescales or schedules as necessary

 *Selecting, ordering and purchasing materials

*Organising the repair and routine maintenance of production equipment

*Liaising with buyers and marketing and sales staff

*Supervising and managing the work of junior staff

*Organising relevant training sessions.

In larger companies, there may be close links between production management and general or strategic
management and marketing or finance roles.

Production management:-

INTRODUCTION

*It is defined as planning, implementation and control of industrial production

process to ensure smooth and efficient operation, production management techniques are used in both
manufacturing and service industries.

*Simply, production management is a process of planning, organizing, directing

and controlling the activities of the production function.

NATURE OF PRODUCTION MANAGEMENT:-

1. Results in Value Addition: Production management is a key tool

available with an organization which assist in value addition. It is
a process which enables in producing high-quality products by
purchasing raw materials from the right source, in right form, at
right price and in right quantity. These quality goods provide
better satisfaction to customers thereby improving goodwill of an
organization.
2. Inter-Disciplinary Approach: It is an inter-disciplinary approach
which is derived from several disciplines and subjects. Different
subjects like statistics, mathematics, economics, engineering,
sociology and human psychology have contributed toward the
development of production management approach.
3. Part of General Management: Production management is an
essential component of General management. It is a tool which
 assist managers in planning, organizing, coordinating and
controlling all activities related to the production of products and
services. 
4. Transformation Process: It is a process of transformation in
which raw materials are converted into finished products that are
ready for consumption by consumers.  Production management
focuses on economical production of products avoiding any
wastage of raw materials used.
5. Operative Function: Production management monitors day to day
operations of business for ensuring long-term continuity. It
supervises all production activities on daily basis for checking out
whether all resources are efficiently utilized.
6. Both Art and Science: It can be treated both as an art as well as
science. Production management is termed as art as it is the one
which assign, coordinates and monitors all work activities of an
organization. Whereas, it is a science as it manages all machines
and technical aspects helping in production activities.
7. Management of Service Sector: Production management not only
manages the activities related to production of tangible products.
It is a process which monitors the service sector also where
intangible products are provided to customers as per their needs

IMPORTANCE AND SCOPE OF PRODUCTION MANAGEMENT:-

IMPORTANCE OF PRODUCTION MANAGEMENT V

1. Efficient use of capital and resources

Production management minimizes the cost of production and enhances the use of resources to the
fullest. A concise blueprint enables proper use of resources and time, minimising disparity between
production process and output. Evaluation of production processes and maintenance downtime will
ensure processes can be managed efficiently optimising workforce efficiency. A well-thought-out
production function will result in high-quality products, a faster rate of production, and a lower cost per
unit.

2. Competitive edge

Production management can be a great tool for organisations facing competition in the market. A
smoother flow of processes increases efficiency whilst also allowing the company to provide quality
products and services. Production management techniques play a role in the effective innovation of new
products and facilitate research in developing new and quality products. It can aid organisations in
emerging as market leaders since less time spent for production processes means more resources to
spare for other domains that may need more attention.

3. Minimizes risk of product failures

Preparing a lucid roadmap and collating information and assumptions helps assess the market and
reduce chances of failure. Knowing the requirements and needs of the market will help reduce the
chance that a product will flop. Ultimately, product management, like everything else, cannot guarantee
success, but it does reduce it.

SCOPE OF PRODUCTION MANAGEMENT:-

4. Facility location: It involves selecting the right location for setting up production
facilities of business that affects its long term growth. This is an important decision to
be taken as it involves long term commitment and huge investments in land, building
and machinery. Location of facility should be appropriate from where raw materials,
labour and other factors of production are easily accessible by business.

5. Plant layout and Material Handling: Plant layout is concerned with physical
arrangement of facilities set up by business. It involves deciding departments, work
Centre’s, machines and necessary equipment’s within the facility for ensuring better
productivity. Material handling refers to managing the movement of materials from
storeroom to machinery and from machinery to another stage of production like
packaging and storing.
6. Product Designing: Product designing means giving shapes to ideas of products for
converting them into a reality. Every organization should come up with innovative
products in market after conceiving new ideas based on market requirements.

7. Designing of Process: Process design is an overall route followed by business for

transforming raw materials into finished products. It is a crucial decision to be taken
as it determines the efficiency of business. It involves choosing appropriate
technology, deciding sequence of production processes and facilities layout.

8. Production Planning and Control (PPC): It involves planning and controlling various
aspects of production activities. PPC is a process of deciding production in advance,
setting up the exact route for each item, deciding the start and finish deadline of each
product for directing production orders to shops and following product progress in
accordance with the order.
 9. Quality Control: Quality control is a process of checking and maintaining the required
quality standards of production activities within the organization. It ensures that
goods produced are of high quality by setting up check points and measuring
performance from time to time.

10. Maintenance Management: It refers to evaluation of all business activities for

identifying any deviations if there. Maintenance management involves taking all
corrective steps for removing these deviations. It focuses on keeping all the processes
on track in line with decided quality, pre-determined cost schedule and time range.
Taking care of all machinery repairs, replacement and servicing are included in this.

BASIC FUNCTIONS:-

Functions of production Management

Production management attempts to utilize 6M’s: Men, Machines, Money, Methods, Materials, and
Market in order to better serve consumer needs. Its fundamental goal is to produce products and
services in the right quantity, quality, on a schedule, and for optimum money. Production
management makes it simple to adopt various technologies and innovative changes in the workplace.
Production management is in charge of supervising and controlling all employees involved in the
company’s production processes in order to ensure that the target output is achieved.

Let’s discuss the functions of production management.

1. Selection of product and design

Production management helps the organisation select the right product for production and also
choose a relevant design for the product. This becomes imperative for the survival of organisations to
possess a good understanding of their consumers in order to create products that fully satisfy needs.
Products need to go through a detailed evaluation in order to meet customer needs while also
remaining cost-efficient.

2. Production planning and control

Choosing the correct production processes for a particular product also becomes important. Decisions
must be taken in order to choose the correct type of machines and technology, the capital investment
required, and so on. It entails planning prior to production. Decisions like the quantity of production,
the flow of processes, and so on are all planned out. Routing is the term used for charting out the
sequence of operations for a smooth workflow.
Production control is overseen by the production manager. The actual process is compared and
contrasted with the blueprint in place so that all necessary diversions from th original plan can be
mapped out and any loopholes in the original plan can be spotted and corrected.

Scheduling is done to set up benchmarks as to when starting and when to complete a particular
production activity. Inventory and cost control also need to be taken care of. The allocation of
materials, labour, and other processes is called the production schedule.

3. Machine maintenance and replacement

Production management takes care of the maintenance and replacement of machines and equipment
to ensure the efficient and smooth working of production processes. This is taken care of by the
production manager and the team to prevent speed breaks and halts in production.