In a dynamic but not yet regulated market environment, the increased interest in production management is understandable.
The emerging companies are influenced by the many mechanisms operating in this environment, quality and competition, technological renewal, price, tax and inflationary policies.
Survival opportunities are many and many. Economists advise making investments, but where from? Designers and technologists advise on more research, but that is why resources are also needed. Human relations advocates say that the approach to managing people should be changed, but is this the most manageable resource with its unpredictability?
As a result, it comes down to organizing the production of goods and services that meet the needs of customers. It is the managers who can put into practice the best ideas. But the difficulties come from the fact that production in many areas has stopped and if it starts to develop, the driving force must be Production Management.
Tracking the development of the world industry – steel, automotive, electronics and more. it is recognized that low levels of labor productivity are one of the major problems in the economy of many countries in the world. Even countries like the United States have not held back competition in their core industry from countries such as France, Japan and Germany. It is also reported that some business activities have been concentrated in the agile advertising, financial and product tricks, without paying due attention to production management. This has led to a critical business situation in many companies and countries.
In a country like Bulgaria, which is just starting out in the market and economic environment, the focus should be on working with new technologies. Establish productions ensuring high productivity and modern management of production and human resources. This is a necessary and important condition for the international competitive position of the country as a whole and its companies.
Manufacturing management is an opportunity, an important tool for increasing the efficiency of the company (revenue compared to costs). Production management influences the improvement of the technical and economic characteristics of the company and has a positive impact on the following important indicators:
- Compliance with the agreed deadlines, through the uniform and rhythmic fulfillment of the production tasks;
- Full load and use of available equipment;
- Reduction of labor absorption of production;
- Reducing the volume of work in progress – (production in which labor and materials are invested but not yet ready for sale);
- Improving the quality of production;
- Reducing the cost of products.
Revealing the essence of Production Management
Revealing the essence of Production Management (PM), the following main tasks can be outlined:
Production management must ensure the production and delivery of production in accordance with the forecasts provided in the forecasts and/or with the contracts concluded with the customers for volumes, nomenclature, quality and terms; Reference: Britannica
Production management must ensure the necessary commitment in the work of the individual units in time and the saturation of all phases of production with the required quantity of stocks (stocks);
Production management must ensure uniform work and a high degree of loading of equipment, areas and manpower;
Production management must ensure maximum continuity in the flow of material flows in the phases of the production process, thereby increasing the speed of the process;
Manufacturing management must ensure continuity in the management of production at its hierarchical levels, ie. in space and for each planned time interval, i. in the time.
The increased interest in production management can be outlined in the following several areas:
Emphasizing quality, recognizing that not many costs create a high-quality product. Leading companies have even proven that we need to cut costs on a high-quality product as long as we can manage to reduce mistakes. (Japanese experience). It is also known that quality is key in non-price competition and is an advantage in many industries. Reference to Japanese management methods.
Much attention is paid to production and inventory monitoring systems. Computer Inventory Monitoring Systems (MRPs) and Principles of Secure Time Delivery (JIT) are used. These approaches are integrated into many production systems.
Introducing new unique technologies using computer technology, robotics, automated offices, laser processing, non-waste technologies and more. Managers are leading the development and implementation of these technologies.
The market, involving consumers of goods and services, forms the company’s corporate strategy. The marketing strategy is the subject of entrepreneurship. It provides a reliable search forecast and answers the questions: What ?, From what ?, How much ?. Marketing informs the production of any emerging consumer claim to quality, delivery time, etc. Based on needs and capabilities, make the product subject to production. It deals with packaging, advertising and is looking for a buyer with the main economic purpose – maximizing the turnover (highest sales volume).
The logistics strategy answers the question- How will we act ?, always aiming at minimal cost and delivery just in time. While marketing seeks to shape product demand, logistics are focused on meeting that demand. The process of satisfaction consists in reducing the time for physical delivery and the cost of doing so.
Management implements the ideas set out above, as well as the organization of live work, management, personnel policy and more.
And if marketing and logistics can be summed up to be concepts of a global company strategy, the organization and implementation of those concepts are the subject of management, and that of Production Management. Seeking his place in this variety of activities, he describes himself by transforming the input resources into a finished product. This transformation is a major goal of the production process. From the point of view of transformation, great importance is attached to the basic technological processes. They are directly related to the impact on resources to create a finished product or service.
In many industries, the products are multi-part and the technological processes are very complex. Organizing them is about solving a set of problems, sometimes difficult to solve. So if we have to answer the question Why is Production Management being studied? The answer is Production Management is one of the three main functions in any organization, integrated with all other business functions and gives knowledge about it:
how to manage production technology
how to organize people (human resources) in a manufacturing enterprise,
how to increase the efficiency (productivity) and profitability of the organization.