Production is important. In fact, the fundamental reason why businesses exist is to make goods and services that meet consumers’ needs and wants. Without efficient production, producing products will not be successful; hence customers will not be satisfied; therefore leading to business not being sustainable in the long-term.
Specifically, Production Management deals with decisions regarding product design, production planning, location of production facilities, choosing appropriate production method, inventory management, quality checks, workforce issues and project management to achieve operations objectives.
Modern production uses a variety of advanced computer technologies, or information systems, to produce products effectively and efficiently (productively).
1. Production Planning
Production management looks at how scarce resources are managed to achieve the efficient production of goods and services – using inputs and manage business processes efficiently to produce outputs.
It includes establishing, managing and improving the local and global supply chain processes.
Other tasks include managing capacity utilization rate, measuring labor productivity and capital productivity, finding out defect rates, improving productivity rate and operating leverage.
Finally, Production manager need to decide whether it is better to buy the products from another supplier (Cost-To-Buy (CTB)) or make the products (Cost-To-Make (CTM)).
2. Location
This section includes location decisions of businesses and figuring out how organizations achieve the shortest supply chain. The reasons for a specific location of production need to be outlined, analyzed and evaluated.
The following ways of reorganizing production, both nationally and internationally include Outsourcing/Subcontracting, Offshoring, Insourcing and Reshoring.
3. Research and Development (R&D)
How important is Research and Development (R&D) for a business organization?
Indeed, it helps to develop goods and services that address customers’ unmet needs of which the customers may be aware or may completely not be aware. This section also involved intellectual property protection such as copyrights, patents and trademarks.
Innovation that can be either incremental or disruptive is an integral part of the research and development process.
4. Production Methods
This part focuses on the functional area of production – different methods of production and how to increase productivity.
The following operations methods are the most common such as job production, batch production, mass production/flow production and mass customization.
5. Inventory Management
Production manages need to make a decision whether to use Just-In-Case (JIC) or Just-In-Time (JI) inventory management systems.
They also need to compile appropriate stock control charts based on the following information to manage stock: lead time, buffer stock, reorder level and reorder quantity.
6. Lean Production
The concept of Lean Production is introduced here.
The following two main features of lean production include producing less waste and achieving greater efficiency. The most well-known methods of lean production are continuous improvement (kaizen) and Just-in-time (JIT).
The impact of lean production on an organization is introduced.
Features of cradle to cradle design and manufacturing are also introduced here.
7. Quality Management
The section includes methods of achieving quality in the production process.
The two main approaches to managing quality include Quality Control and Quality Assurance. The following methods of managing quality are Quality Circles, Benchmarking and Total Quality Management (TQM).
The impact of Total Quality Management (TQM) on an organization is introduced.
Following national and international quality standard is crucial for any business.
8. Project Management
Successful operations and Project Management (managing resources to successfully complete various projects) support effective manufacturing and service businesses in dynamic and volatile business environments.
9. Information Systems
The data from information systems is mainly used to monitor customers and manage employees, leading to so called Digital Taylorism. Therefore, the use of data mining to inform decision-making can be a valuable business asset.
Some people claim that Digital Taylorism, or a modern version of 'scientific management', threatens to dehumanize the workplace.
The main management information systems, or advanced computer technologies, include:
- Databases
- Data Analytics
- Customer Loyalty Programs (CLPs)
- Big Data
- The Internet of Things (IoT)
- Critical IT infrastructures including:
- Artificial neural networks
- Data centers
- Cloud computing
- Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR)
- Artificial Intelligence (AI)
- Cybercrime and Cybersecurity
There are obviously several benefits, risks and ethical implications of information systems and technological innovation on business decision-making and business stakeholders that need to be considered.
