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When it comes down to it, manufacturing is all about sourcing raw materials and turning them into finished products. In other words, manufacturers impart value on raw materials, making a final product that can be used or consumed by an end customer.
To ensure that the customer gets exactly what they want the way they want it, manufacturers take a deep interest in the systems and processes involved in producing items in their facility. This is known as production management.
What is Production Management
Simply put, production management is the process of effectively managing the resources required to turn raw materials into finished products, focusing on the entire product lifecycle. Of course, these resources vary, including everything from people and materials to the various types of equipment used across facilities.
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Production management versus operations management
Another concept that often comes up when discussing the management of production activities is operations management. Despite being similar, production management and operations management differ distinctly.
As earlier defined, production management is a well-balanced act that involves efficiently utilizing necessary resources to create products for customers.
Operations management, on the other hand, is a broader concept, extending to the wider manufacturing enterprise and even across industries. In other words, operations management involves not only production-centric activities, but also the day-to-day business dealings of an industrial organization.
Production management concerns itself with ensuring that the correct quantity of high-quality products is made to meet the needs of consumers at the lowest cost possible. In a manufacturing context, operations management concerns itself with using business principles to ensure that resources are appropriately utilized to ensure customer satisfaction and keep the business running.
With this in mind, it’s clear that operations management is an all-encompassing concept of which production management is but an essential component.
Why is production management important?
Because production management hones in on factory-level activities, it is an essential aspect for manufacturers to embrace. Therefore, it’s vital for a manufacturing business to pay close attention to all activities involved in associated processes. Some of the key elements of why production management is important are as follows:
To reduce manufacturing costs
If a manufacturing operation injects too many financial resources into producing goods for customers, it might fail to make sufficient profits. In such cases, the business will often become unsustainable, leading to its downfall.
Therefore, it’s prudent for manufacturing business owners to embrace production management. It can help them to analyze their processes for improved optimization. Proper management results in less input and more output, resulting in reduced manufacturing costs and wider profit margins.
To ensure proper and optimal use of resources
Production management enables businesses to analyze the resources required in the manufacturing process. For example, manufacturers must manage inventory and raw materials, track their workforce, and monitor the equipment and machinery used in the production process.
This assessment allows manufacturing businesses to optimize their resource deployment, ensuring that they use the right inputs to make the final product. In addition, this helps to eliminate waste, making for a leaner and more profitable operation.
To improve competitiveness in the market
In manufacturing, competitors are always trying to make their mark in any given target market. And if your company isn’t able to compete with competitive offerings, it’ll fade away.
Manufacturers undertake production management to ensure that they consistently turn out high-quality products to meet the demands of consumers. As a result, consistency makes the business better equipped to remain competitive against rivals.
Furthermore, the brand’s standing grows among consumers, placing the business on a trajectory to a more prominent market presence.
To meet set business targets and objectives
As earlier discussed, production management falls under operations management. The latter contains executive-level activities that analyze market situations to determine what targets and objectives the business needs to meet to remain viable.
Production management takes over at the ground level to optimize the manufacturing operation to meet those set goals. With proper management, the organization produces high-quality goods – at lower costs – that meet or exceed customers’ expectations.
This improves satisfaction, leading to repeat business that increases the lifetime value of customers over an extended period. Such an operation ultimately ticks all the boxes set by executives in charge of operations management.
Benefits of a production management system
The longstanding importance of production management holds true in the modern industry 4.0 age of manufacturing. However, the practice and implementation differ significantly with the dynamic factory outfitting found in today’s marketplace.
Using a production management system or platform like Tulip provides some crucial advantages to modern manufacturers, including:
Intuitive user interface: Intuitive systems save businesses the time needed to train employees to use the software. Additionally, the straightforward features allow supervisors and managers to easily schedule activities, eliminating the need for frequent manual checking throughout the day.
Detailed customization: Manufacturers can modify a production management system to fit their unique needs. The now-bespoke digital tool lends itself well to the manufacturer’s distinct production management requirements.
Comprehensive analytics: Managing production requires different kinds of data, giving managers the necessary information to make decisions. But with modern factories, the sheer amount of data generated needs significant analysis.
A production management system is equipped with powerful analytics that provides detailed insights into the production situation, allowing managers to make informed decisions.
Shared access: Modern digital production management tools do away with the traditional methods that were highly siloed. Instead, the new iteration is cloud-based, ensuring that relevant entities can access data from anywhere.
This allows for better collaboration among the various departments, enabling better planning and management.
If you’re interested in learning how Tulip can help supervisors manage the production activities happening across your shop floor, a member of our team would be happy to help—reach out to learn more!
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