Concept of Production
Production function is ‘the part of an organization, which is concerned with the transformation of a range of inputs into the required outputs (products) having the requisite quality level’.
Production is defined as ‘the step-by-step conversion of one form of material into another form through chemical or mechanical process to create or enhance the utility of the product to the user’. Thus production is a value addition process. At each stage of processing, there will be value addition.
Edwood Buffa defines production as ‘a process by which goods and services are created’. Some examples of production are: manufacturing custom-made products like, boilers with a specific capacity, constructing flats, some structural fabrication works for selected customers, etc., and manufacturing standardized products like, car, bus, motor cycle, radio, television, etc.
The production system is ‘that part of an organization, which produces products of an organization. It is that activity whereby resources, flowing within a defined system, are combined and transformed in a controlled manner to add value in accordance with the policies communicated by management’.
The production system has the following characteristics:
- Production is an organized activity, so every production system has an objective.
- The system transforms the various inputs to useful outputs.
- It does not operate in isolation from the other organization system.
- There exists a feedback about the activities, which is essential to control and improve system performance.
The objective of Production Management is to produce the desired product or specified product by specified methods so that the optimal utilization of available resources is met with. Hence the production management is responsible to produce the desired product, which has marketability at the cheapest price by proper planning, the manpower, material and processes. Production management must see that it will deliver right goods of right quantity at right place and at right price. When the above objective is achieved, we say that we have effective Production Management system.