Production and material

management

Name- Anushka Mishra

Semester – BBA 5 SEM
Roll no- 198016
 CONTENT

- Production Concept
- Products and Services
- Plant Location
- Production System
- Product Planning
- Inventory Control
1-Introduction of Production
Production is defined as the organized
activity of transforming resources into
finished products in the forms of goods
and services.

“the objective of production is to satisfy

the demand for such transformed
resources”.
TYPES OF PRODUCTION

Primary production

Secondary production

Tertiary production
PRIMARY PRODUCTION

Primary production is carried out by

‘extractive’ industries means natural
resources, the things which comes from
earth’s surface, and from the oceans.

Example: agriculture, forestry, fishing,

mining and oil extraction.
SECONDARY PRODUCTION

This includes production in

manufacturing industry, viz., turning out
semi-finished and finished goods from
raw materials and intermediate goods.

Example: cars, furnishing, clothing and

chemicals, as also engineering and
building.
TERTIARY PRODUCTION
Tertiary production means the commercial
services that support the production and
distribution process. The tertiary industry is a
technical name for the service sector of the
economy which makes no physical thing and it is
the creation of intangible goods.

Example: insurance, transport, advertising,

warehousing and teaching and health care.
 FACTORS OF PRODUCTION
There are main four types of factors of production
1). Land: Natural resources.
2). Labour: Human Skills and Efforts
3).Capital: Equipment and Material
4).Enterprise: Organization and Undertaking
Production

<Involvement of these four factors

produce the goods and services for
consumers.
2-PRODUCTS AND
SERVICES -
PRODUCT –
Product is the final production unit of the
production process.

SERVICES –
Services are known as non physical goods,
transfer from seller to buy as per the requirement
of the buyer.
 3- PLANT LOCATION
Location of an industry is an important
management decision, it is a two step decision
first, choice of area and second, the choice of site
within the area selected.

Plant Location referred as the location where the

owner is going to set up the plant or industry.

The Objective of plant location decision making is

to minimize the sum of all cost affected by location .
FACTORS AFFECTING
PLANT LOCATION -
There are some factors that affect the plant
location –

1-)Selection of region
2-) Nearness to Market
3-) Transport Facilities
4-) Supply of Labour
5-) Power and Fuel
6-) Financial and other aid
7-) Needy Facility
4- PRODUCTION SYSTEM -
Production System may be defined as “The
methods, procedure or arrangement which
includes all function require to accumulate or
gather the inputs, process the input and deliver
the output.
 Production System consist of three main
component viz,……
Inputs

Conversion
Process

Output
TYPES OF PRODUCTION
SYSTEM -
The normal way of classifying production system
is under four broad headings as follows –

1) Job Production
2) Batch Production
3) Mass Production
4) Process Production
JOB PRODUCTION -
This type of production system is concerned with making a
usually high price of products to an order which is not likely
to be repeated.
This production system calls for skilled workers, who can be
flexible in adapting their skills to producing just what the
customers require.
A crucial consideration in job production is the fact that
nearly all the production costs fall to the one job.
Since they can't be spread over a long run of production,
the fixing of a correct selling price is very important.

EXAMPLE – Designing and implementing an advertising

campaign.
Auditing the accounts of a large public limited company.
Building a new factory.
Installing machinery in a factory.
BATCH PRODUCTION -
This is the production of a given quantity of
goods- i.e. a number of units of a similar
specification.
There may be repeat orders for these goods, but
there is no continuous flow of production.
Batch Production made specialist goods to fit
customers requirement.

EXAMPLE – An example of batch production

might be air craft engines for a given type of
aeroplane.
MASS PRODUCTION -
This is the continuous output of uniform,
standardised products for a mass market (huge
market) which offers a regular, continuous
demand.
The goods are relatively low priced and are
produced by the use of machines and semi-skilled
and unskilled labour.
A sub-type of mass production is flow production.

EXAMPLES –
Cars,
Chocolate bars,
Electronic Goods
PROCESS PRODUCTION -
This refers to process used to extract products
such as oil and gas. It makes possible or
continuous flow of production using expensive
machinery, highly automated methods and a mass
marketing techniques.
Large capital investment is involved and a mass
market is needed to absorb the goods produced.

EXAMPLE –
Oil Refining
Cement
5-Production planning and control-
Production planning and control is an important task of
production manager. It has to see that production
process is properly decided in advance and it is carried
out as per the plan. Production is related to the
conversion of Raw material into finished goods. This
conversion process involves a number of steps such as …

Deciding what to produce,

How to produce,
When to produce, etc.
These decision are a part of production planning.

The whole process should be carried out in a best

possible way and at the lowest cost. This is a control
function and has to be carried as planning.
Objectives of production
planning and control-
Following are the objectives of production
planning and control-
1- Systematic planning of production activities
to achieve the highest efficiency in production of
goods and services.
2- To organize the production facilities like.
Machines, men, etc.
3- Optimum scheduling of resources.
4- Materials planning and control.
5- To be able to make adjustments due to
changes in demands and rush orders.
6- To confirm the delivery commitments.
Importance of production planning
and control-
The importance of production planning
and control are summarized below-

Better service to customers

Fewer rush orders
Better control of inventory
More effective use of equipment
Good Public image
Reduced idle time
Elements of Production planning and
control
The following are main elements of
production planning and control-

Routing
Loading
Scheduling
Dispatching
Follow up
Inspection
Corrective
6- Inventory control
Inventory control system is maintained by every
firm to manage its inventories efficiently.

Inventory control is the process of keeping the

right number of parts and products in stock to
avoid shortages, overstocks and other costly
problems.
Inventory control is the process of maintaining
a business’s stock level to meet customer
demand and minimize costs. Inventory control
is a part of the inventory management process.
 Objectives of Inventory control
These are the some objectives of inventory
control-

-To minimize capital investment in inventory by

eliminating excessive stocks.
-To provide a scientific basis for planning of
inventory needs.
-To minimize risk of loss due to obsolescence,
deterioration, etc.
- Maintain the cost of production.