PRODUCTION PROCESS

Production

The production process combines different inputs, both material and immaterial, to produce output. Ideally, this output will be a valuable good or service that contributes to people’s utility.

Production Management

Production management is the process of directing a company’s operations in order to provide the services and products it desires. It consists of organizing, carrying out, and managing processes that convert raw materials into finished goods and services.

Nature of Production Process as a system

A system is an arrangement of components designed to achieve a specific goal (or goals) as planned. The components can be physical, conceptual, or both, but they all have a unique relationship with one another and with the overall goal of the system. A health care delivery system, for example, includes doctors and physical facilities, as well as conceptual operating policies, all of which work together to provide patients with a certain level of medical care.

Our cultural environment contains a plethora of economic and social systems, many of which are interconnected and operate concurrently for the benefit of society as a whole. We have a national monetary system, for example, that facilitates the exchange of goods, as well as a transportation network that can move these goods quickly and efficiently to any part of the country.

Individual companies and governments are essentially subsystems of larger social systems. They, in turn, are typically composed of their own sub­systems that, in theory, function for the benefit of their respective organizations. Organisation focuses to proceed with their Production Process to enhance their value. Production, marketing, and finance are traditional subsystems of a firm’s formal organization.

Many businesses, however, are reorganizing their formal structures to better account for the interdependence of such subsystems. As a result, business systems that are based on information flows and decision responsibilities rather than strict functional lines are emerging.

A systems approach to operations management problems emphasizes the integrative nature of management responsibilities, acknowledging both the interdependence and hierarchical nature of subsystems. In essence, systems theory emphasizes the understanding and relationships of the entire system, acknowledging that the combined effect of components can be greater than the sum total of individual effects, that is, synergistic.

This synergy enhances the production process to inculcate quality in the products or services. Problems must first be abstracted from their larger (macro) context before being broken down into parts (micro), analyzed, and solutions proposed. However, the components must eventually be restructured or synthesized (macro) in order to discover and evaluate the impact of new interrelationships that arise from proposed system changes.

Of course, an organized enterprise does not exist in a vacuum. It is rather dependent on its surroundings; it is a component of larger systems such as the industry to which it belongs, the economic system, and society. As a result, the enterprise takes in inputs, transforms them, and exports the outputs to the environment in order to carry their best production process.

This simple model, however, needs to be expanded and developed into an operational management model that shows how the various inputs are transformed through the managerial functions of planning, organizing, staffing, leading, and controlling to focused production process. Clearly, an open system model that includes interactions between the enterprise and its external environment must be used to describe any business or other organization.

Inputs and Claimants

This is the first step in the production process. People, capital, and managerial skills, as well as technical knowledge and skills, are examples of external inputs. Furthermore, various groups of people will place demands on the company. Employees, for example, want higher pay, more benefits, and job security. Consumers, on the other hand, expect safe and dependable products at reasonable prices. Suppliers want to know that their products will be purchased.

Stockholders want not only a high rate of return on their investment, but also financial security. Federal, state, and local governments rely on the enterprise to pay taxes, but they also expect the enterprise to follow their laws. Similarly, the community expects businesses to be good citizens, creating as many jobs as possible while emitting as little pollution as possible. Other enterprise claimants may include financial institutions and labor unions; even competitors have a legitimate claim for fair play.

Many of these claims are clearly incongruent, and it is the manager’s responsibility to integrate the claimants’ legitimate objectives.

The Managerial Transformation Process

Managers are responsible for converting inputs into outputs effectively and efficiently. It is core to carry the best production process. Of course, the transformation process can be viewed from various angles. Thus, one can concentrate on various business functions such as finance, production, personnel, and marketing. Management writers examine the transformation process through the lens of their own management approaches.

Human behavior school writers, in particular, focus on interpersonal relationships, social systems theorists analyze transformation by focusing on social interactions, and decision theory advocates see transformation as a set of decisions. However, using managerial functions of planning, organizing, staffing, leading, and controlling as a framework for organizing managerial knowledge may be the most comprehensive and useful approach for discussing the job of managers.

The Communication System

For two reasons, communication is essential at all stages of the production process. For starters, it integrates managerial functions. For example, planning objectives are communicated so that an appropriate organizational structure can be devised. Communication is critical in selecting, evaluating, and training managers to fill the roles in this structure.

Similarly, effective leadership and the creation of a motivating environment are dependent on communication. Furthermore, communication is used to determine whether events and performances are under plan. Thus, communication is what enables management to ease their production process.

The second goal of the communication system is to connect the enterprise to its external environment, which is home to many of the claimants. For example, one should never forget that the customer, who is the reason for almost all businesses’ existence, exists outside of a company.

Customers’ needs are identified through the communication system; this knowledge enables the firm to provide products and services at a profit. Similarly, an effective communication system alerts the organization to competition as well as other potential threats and constraining factors.

External Variables

Effective managers will scan the external environment regularly. While managers may have little or no control over the external environment, they have no choice but to respond to it. External variables are always checked to get best out of production process.

Outputs

Managers are responsible for securing and utilizing inputs to the enterprise, as well as transforming them through managerial functions — with due consideration for external variables — to outputs. Output is the end product that will be delivered to the customer in the cycle of the production process.

Although outputs vary depending on the enterprise, they typically include many of the following: products, services, profits, satisfaction, and integration of the goals of various claimants to the enterprise. Only the last two will be discussed because they require no elaboration.

If the organization hopes to retain and elicit contributions from its members, it must provide numerous satisfactions. It must contribute to the satisfaction of not only basic material needs (for example, employees’ need to earn money for food and shelter or to have job security), but also affiliation, acceptance, esteem, and possibly even self-actualization so that one can use his or her potential at work.

Goal integration is another result. As previously stated, the various claimants to the enterprise have very different — and often directly opposing — goals. Managers are responsible for resolving conflicts and integrating these goals. These are some dynamic factors among the Production process that comes under the management checks.