The problems that a manager faces in various organization are more or less similar to that of production department, just that these are of smaller nature in production. The knowledge of production management will help any manager tackle to problem easily.
Scope of production management considers the below three
Manufacturing system often produces standardized products in large volumes. The plant and machinery have a finite capacity. The facilities constitute fixed costs, which are allocated to the products produced. Variable costs, such as, labour cost and materials costs. While manufacturing the product use value and economic values are added to the product. Hence the product is a store of values added during manufacture. Because the input costs and output costs are measurable, the productivity can be measured with certain degree of accuracy. Product can be transported to the markets and stored physically until it is sold.
Service system present more uncertainty with respect to capacity and costs. Services are produced and consumed in the presence of the customer. We cannot store the service physically. Because of this the service organizations, such as Hotels, Hospitals, Transport Organizations and many other service organizations the capacity must be sufficiently or consciously managed to accommodate a highly variable demand. Sometimes services like legal practice and medical practice involve Professional or intellectual judgments, which cannot be easily standardized. Because of this the calculation of cost and productivity is difficult.
Project system does not produce standardized products. The Plant, Machinery, Men and Materials are often brought to project site and the project is completed. The project is of big size and remains in the site itself after completion. As the costs can be calculated and allocated to the project with considerable accuracy, Productivity can be measured. Once the project is completed, all the resources are removed from site.
Benefits derived from Production Management
The efficient Production Management will give benefits to the various sections of the society. They are:
Consumer benefits from improved industrial Productivity, increased use value in the product. Products are available to him at right place, at right price, at right time, in desired quantity and of desired quality.
Investors: They get increased security for their investments, adequate market returns, and creditability and good image in the society.
Employee gets adequate Wages, Job security, improved working conditions and increased Personal and Job satisfaction.
Suppliers: Will get confidence in management and their bills can be realized without any delay.
Community: community enjoys Benefits from economic and social stability.
The Nation will achieve prospects and security because of increased Productivity and healthy industrial atmosphere.