Production Management: Definition, Function - Report Example

Production refers to application of resources, which encompass people and machinery, to convert raw material into finished good or service (Aveline). Likewise, the production management refers to a process of managing people and machinery in converting raw material into finished products and services (Simons and Dutton). The production process includes three steps namely Input, Conversion process and Output. Input refers to raw material, people, machinery, equipment, building and other essential resources needed to be processed. Conversion process refers to a systematic procedure of adding value in order to reach the desired output. Conversion process can have several steps which at each stage provide value to the prior step. Output is the final product or service provided to the worthy customers (Broom). Consider certain production system which will help us understand the production process effectively. For a factory which specializes in producing computers, the primary inputs will include hard drives, computer memory, chips, keyboards, monitors, and board of networks. These inputs will then be transformed through the conversion process (Moore). This step assembles components to meet customer orders, including specialized orders for hardware and software. After the conversion process, an output is produced in the form of desktop or laptop computers. Another example pertains to the service sector. The country’s police department can also be an example of the production system. Its primary inputs include personnel, police equipment, automobiles, office furniture, building and other utilities. These inputs are then taken to the conversion process where they are transformed to detect crimes and bring criminals to justice. Moreover, provide safety to the local residents and maintain proper law and order situation in the country. The output of this transformation is a decrease in the crime rate and increase in peaceful communities. The production management has strategic importance in providing value to the customers. It is considered a vital function which is necessary to generate money to pay all stakeholders including employees, lenders and stockholders. Moreover, effective production management can provide the company with the following benefits. Lower a firm’s cost of production Increase quality of goods Ability to respond to varying customer demand And enables the company to renew itself by providing innovative products. The production management system depends on the type of production. These types include mass production, flexible production and customer driven production (Lockyer). The mass production process specializes in production products in large amounts. This is achievable through standardized mechanism and specialized skills. An example of it could be the production of automobile manufacturing which has standard measures to produce each car. The second type is flexible production which includes producing smaller batches using advanced information technology, communication and collaboration among different parts of the firm. An example of it is the production CD/DVD. They are produced in small batches and change frequently with the constant flux of technology. The third type is customer driven production which evaluates customer demands linkage with manufacturer’s production. Customer’s demand change frequently for certain products therefore, it is advisable to refrain from producing large stock units and focus on customized productions which are linked to customer’s demand. A popular example of it is the manufacturing of garments. These products are made to order rather than made to stock (Kumar). As soon as the demand arises, the production facility starts functioning and production is made to meet the demand. Performance objectives of operation The performance objectives of operations differ at different levels in the organization. At the strategic level, the objective is to align the interest of all stakeholders. These include all major stakeholders such as customers, stock holders, suppliers and society in general (Stevenson). There are certain things that the production team needs to perform which has external and internal benefits. An explanation of each is given below: Doing things right: The core objective of performance is to increase the quality of the goods provided to customers. The external benefit of it would be satisfaction of customers. On the other hand, internal benefit is the reduction of cost as quality operations through efficient production reduces cost and increased dependability. Doing things fast: This will affect the speed of delivery of goods and services. Externally, it is an important aspect of customer service and will enhance customer loyalty. Internally, the speed will reduce throughput time along with the risk of delaying the commitment of resources. Increased speed will eventually lead to reduced inventory. Doing things on time: This performance indicator affects the dependability of delivery of goods and services. Externally, it adds value to customer service. Internally, it will increase operational reliability which will save time and money which could have been utilized in solving pertinent problems. Change what they do: This indicator reflects upon the flexibility with which the company can produce goods and services. Externally, it will help in providing new products, variety in product mix, meet different volumes and flexible timings. Internally, flexibility will help in boosting the response time. It will also help in saving time which would be wasted in changeovers and ultimately enhance dependability (Lewis and Slack). Lastly, doing things cheaply: operations hunt to influence the cost of company’s goods and services. The cost of goods sold constitute more than 70% of a company’s cost therefore, it is imperative that the production unit works to reduce the cost as much as they can. Externally, lower cost will enable the company to reduce prices and stay competitive in the market. Internally, cost performance is a result of good performance in other performance objectives. Conclusion In a nutshell, production management is a vital function in any organization which aspires to remain competitive in the market and eventually increase their revenue and market share. It will help a firm achieve lower cost, customer loyalty, customer satisfaction and dependability status. The management system depends on the type of production your product or service requires. These include mass production, flexible production or customer driven production. All of the types include advantages as well as disadvantages. Lastly, the several internal and external benefits of efficient production systems makes it one of the disciplines which is taken upon seriously by any growing firm in the global arena. Works Cited Aveline, Joe. Production management. Entertainment Technology, 2002. Broom, Halsey N. Production management. R. D. Irwin, 1967. Kumar, S. Anil. Production And Operations Management. New Age International, 2006. Lewis, Michael and Nigel Slack. Operations Management: Critical Perspectives on Business and Management. Routledge, 2003. Lockyer, K. G. Production management. Pitman, 1983. Moore, Franklin G. Production management. R. D. Irwin, 1973. Simons, Algie Martin and Henry Post Dutton. Production management. American Technical Society, 1940. Stevenson, William J. Operations Management. McGraw-Hill Higher Education, 2008. Read More