Exotech | For beginners in business, do you understand the meaning of production management? Production management plays an important role in ensuring the business runs well on all fronts. Without production management that is carried out in a neat, orderly and planned manner, there is a risk of hampering the business. Especially for you, here is a complete review of production management from a business perspective.
What is the Meaning of Production Management?
Production management refers to structuring the process of converting raw materials into a product so that the product has sales value. As part of the field of management, production arrangements are needed so that companies can achieve business goals, especially to produce goods and services according to plan.
Read Also : Operational Management Functions for Effective Business and Directed
Through production management, the company seeks to apply management concepts to the production process. That way, the production process can produce goods and services according to specifications, time and targeted quantities, but at minimum costs.
There are two factors that influence production management. Among them:
- First, division of labor which means how a task is distributed appropriately. This is important to pay attention to so that the products produced are of high quality and can enter the market well. Apart from that, the division of labor also makes the production process tend to be effective and efficient.
- Then, there are industrial revolution factors that have an impact on human resource management. For example, replacing human labor with machines or robots to produce more goods. However, companies still need quality human resources to control and ensure the machines run well. So, employees also need to hone their skills so they can compete and keep up with changing times.
Another definition of production management focuses on a process consisting of planning, organization, targets or direction, and implementation of production activities. The final goal to be achieved is to convert raw materials into finished products with marketable value. You could say, production management unites 6M, namely men, money, machines, materials, methods, and markets.
Production Management Objectives
Every procedure must have a purpose. The objectives of production management are as follows, which include:
- Control resources to the maximum extent possible for the tasks at hand.
- Organize the workforce according to each individual's skills.
- Handle production equipment from acquisition to maintenance to prevent damage
Proper Production Methods
In carrying out production, a production manager is responsible for choosing which method is right for his business. It must take into account the nature of the product and the targeted production quantities. Some production methods that can be chosen include:
1. Order production
Making products based on customer orders so that the products produced tend to be diverse and not standardized. The characteristics of this production method are that there is a large supply of components to the factory, the availability of a certain production area on a large scale, or manufacturing using special materials or equipment.
2. Batch production
Relating to repeated manufacturing of products. Usually the production quantity of goods is known in advance. The batch system allows production work to be divided into several periods. One period focuses on one operation. Completed at one stage of operation, it continues to the next operation until the final product is completed.
3. Mass production
Mass production focuses on large-scale production activities to provide a sustainable supply of certain goods. Each process must be completed and immediately proceed to the next stage as soon as possible. Continuous production tends to be progressive, meaning the product continues to go through several stages until the final product is obtained.
Production Management Aspects
There are three things included in the production management aspect, namely:
- Production Planning: This planning is carried out to ensure the production process runs efficiently. Initial choices must be made before planning can begin. For example, choosing suppliers, quantities, raw materials and product quality.
- Production Control: The control phase is very important for the smooth operation of the production process. Three concepts are very important to understand in production control: planning, identifying market objectives, and creating work schedules. Control exists to ensure that the production process meets company goals.
- Production Supervision: In terms of production management, supervision is quite crucial. Industrial processes cannot run according to plan without adequate supervision. The purpose of this oversight is to ensure that the manufacturing process complies with the company's basic objectives, starting with the time allocated to the budget that the company has created.
What are the Functions of Production Management
Through neat production management, companies can create goods according to specifications, targeted quantities and time, and at minimum costs. So, what are the functions of production management? These include:
1. Determining the product and design
Production management begins with determining what kind of product and design will be produced. Product selection may require a detailed evaluation of the various alternative products available.
Likewise with designs that suit the target market. The key is how these products and designs can provide maximum value to customers, but are created at minimum cost.
2. Selection of production processes and capacity
In the production process, management needs to consider and decide what kind of procedures they want to carry out. It relates to machines, material handling systems, and technology.
Meanwhile, production capacity also needs to be prepared appropriately to match product demand. The use of break event point analysis can help capacity planning for short and long term production.
3. Planning
Routing and scheduling are an integral part of the production management planning function. The main goal of routing is to find out which sequence of operations is best and most economical so that the workflow runs smoothly.
Also Open : Understanding Distribution Strategy, Examples The type in Business
Meanwhile, scheduling will determine when production starts and is completed. With neat planning, it is hoped that production activities can take place with minimum costs. Companies can also set healthy prices and reap greater profits.
4. Production control
This function positions the production manager as a monitor and controller of the production process. He must check whether the production carried out is according to plan or not. For example, comparing actual production and production plans, as well as finding out and evaluating deviations that occur, along with solutions to overcome them.
5. Quality and cost control
The increasingly competitive market situation means companies have to think hard about controlling production costs without compromising product quality. That is why neat production management is needed so that customers can get good quality products at affordable prices.
6. Inventory control
Production management also focuses on inventory control. The stock must be just right, neither more nor less. Excess production can result in wasted working capital, damaged materials, or products that are wasted and misused because they cannot be sold. Inventory shortages can also hamper the production process, thereby affecting production, sales and distribution schedules.
7. Machine maintenance
Production management is not just about producing goods, but also how to build an efficient system related to maintaining production machines. Starting from routine inspections, cleaning, regular replacement of parts and machines. In this way, machine damage and production stoppages can be avoided.
Conclusion
After understanding the meaning of production management, knowing the types and functions of production, what is the scope of production management? Pay attention to the following points:
- Regarding design: In production management, determining design is a long-term decision. This decision covers many things related to the product to be made, including design selection, material procurement, manufacturing methods, and manufacturing location.
- Regarding transformation: Short term in nature, decisions related to transformation are closely related to operational activities in the field. Some things that are included in the scope of transformation are production schedules, work shifts, budgets, input delivery schedules, and customer output.
- Regarding improvements: Policies related to improvements generally take place continuously and continuously. Therefore, decision making for improvements is usually carried out routinely. Some of the activities included in this scope are continuous improvement of output quality, system effectiveness and efficiency, maintenance of machines and work facilities, employee capacity and competence, as well as continuous improvement in product workmanship or other methods.
The definition of production management is a process arrangement that focuses on converting raw materials into products, as well as providing selling value to these products.