March 17, 2015

Scope and Definition of Manufacturing - Production Management



Manufacturing creates man-made goods from various materials. The goods, more specifically called finished  goods are created through manufacturing processes. Modern manufacturing employs machines to produce goods. Manufacturing management plans, organizes, acquires resources required for manufacture, allocates those resources to various departments, directs and controls manufacturing activity.The aims of manufacturing management are producing goods according to the specifications of the customer or of the product design department if it is made to stock product developed by the company, in amounts and by the schedule demanded at minimum cost. Manufacturing is carried out in factories or manufacturing plants. A manufacturing plant and the various activities carried out in it can also be described as a manufacturing system. Modern manufacturing systems have machines, methods, men, material, motive power, money and management essential components of the system. In terms of assets used in accounting terminology, we can say manufacturing system has both long term assets (fixed assets) and current assets (short term assets).

Manufacturing management involves plans and  decisions regarding long term assets and short term assets, manufacturing methods and manpower.

We can say the long term decisions are in the areas of design, installation and improvement of specified products, manufacturing processes to produce those products, equipment for production, transportation, inspection etc., industrial buildings, location of the plant, layout of the plant. recruitment of permanent manpower and training to develop them into skilled operators in the processes employed by the organization etc. Manufacturing management has to be effective and efficient. Effectiveness refers to producing what customers want in quantities according to the delivery time requested. Efficiency refers to the cost dimension and wastes that occur in manufacturing systems if special attention is not paid to eliminate them.  Industrial engineering is a specialized discipline providing efficiency improvement service at design, installation and improvement stages of manufacture.  

The short term decisions of manufacturing are related production quantities in year, quarter, month etc., inventories, temporary increases or reductions in manpower, overtime decisions to take care of sudden increases in demand, or some exigencies, short term cost budgets, and other incidental  day to day activities. Production planning and control, inventory planning and control, cost control, quality control, maintenance planning and control etc. are some of the well known short term manufacturing management areas that are well developed as independent subjects in manufacturing management degree curriculums. Similarly, new product development, process planning, facilities planning, manufacturing strategy, industrial engineering etc. are well developed subjects dealing with long term aspects of manufacturing management. Industrial engineering became a degree level curriculum as number of methods were developed in this area providing a scope for specially educated and trained professionals in this discipline. Value engineering, Methods Efficiency Engineering, Motion Study, Work Measurement, Ergonomics, Operations Research, Engineering Economics, Applied Statistics, Six Sigma, SMED, Poka Yoke Design etc. are full subjects in industrial engineering curriculums apart  from the basic engineering knowledge in various engineering branches, knowledge of business processes and managerial processes.

Manufacturing managers at various levels are responsible for both effectiveness and efficiency. But they can employ industrial engineers in their department either on full time basis or on assignment basis from their organization industrial engineering department or on consultancy basis from outside industrial engineering organizations.

Elwood S. Buffa, well known author of Modern Production Management first published in 1961 included the following topics to introduce the scope of production management. 

Long Term Decision Areas

Production processes
Automation and Use of Computers (Presently CAD-CAM or CIM)
Design of Jobs and Work Methods
Design of The Working Environment
Production Design of Products and Process Planning
Plant Location
Layout of Physical Facilities

Short Term Decision Areas

Inventory and Production Control
Maintenance
Control of Quality
Production Standards and Work Measurement
Wages and Labor Costs
Control and Improvement of Production Costs.


It is important to state that managerial skills are classified as business conceptual skills, people related skills and technical skills. So manufacturing managers need to have the knowledge to conceive a business opportunity to their department assets and people, knowledge to manage people related to the supply chain that starts  from suppliers of materials and ends with the customer, and technical skills in various methods involved in the manufacturing establishment to plan them, organized them, acquire resources, allocate resources, and direct and control the activities.

References

Elwood S. Buffa, Modern Production Management, John Wiley and Sons, New York, 1961.

Related Article
Manufacturing Management - Introduction


Planned Revision of Operations Management/Production Management Book Chapters  - March Month

1 comment:

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