Production managers are involved in many diverse areas

Products can be classified in many ways and their distribution can take many forms. But the essence of production management is that the factors of production--land, labor, and capital-- are transformed by management from raw materials into something finished, something to be used, or something to be sold profitably in order to keep the business in operation.

Before production can be started, the firm must determine what kind of product it can profitably produce. Management must decide what markets the product will satisfy, what materials it will contain, what processes will be required to form it, by what means it can be transported, and what quality and quantity of labor will be needed to produce it. Knowledge of all this provides direction to the planning and organization of manufacturing.

Once the firm has decided on the basic product or service to produce, design and development can begin. Planning the product involves all parts of the business system. The marketing department may discover the need for a new or improved product, and the production department may then determine whether it can manufacture the product for sale at a given price. The finance department then decides whether the venture will be profitable and whether financing is available to cover the costs of development, manufacturing, and distribution. Such product planning determines whether development and design will go forward.

The process of refining a product to a finished form sheds further light on the problems of manufacture: the equipment, raw materials, and fabricated parts that will be required, as well as the flow of production. Planning for production actually starts as soon as the decision is made to develop and design a product.

Production management makes suggestions for manufacturing that will save time, effort, and money without impairing the design of the product. Production management is very complex. Decisions must be made about labors, money, machinery, and materials. Inventories of parts must be maintained, and proper machinery and equipment must be combined with labor. All these activities, although performed within the production system, must be closely coordinated with the overall system of the firm.

Questions

1.What are the ten decision areas of operations management?

2. Discuss the role of a production manager in the organization.