Production management, or production control, is an essential task for the manufacturing industry. In this blog, we’ll cover the meaning and purpose of production management as well as the importance, specific examples of tasks, common challenges manufacturing companies face with production management, and how those challenges are solved.
Why is production control important in the manufacturing industry?
It’s no secret; production control is extremely important for the manufacturing industry. But, why? Let's consider the meaning and purpose of production management.
Meaning of production control
Production control is not simply the management process of making things. Manufacturing organizations manage a variety of processes ranging from the preparation and productions of materials to the shipment of completed products. This essentially means managing the entire process from the manufacturing of a product to selling it.
As companies in the manufacturing industry secure profits by manufacturing and selling, production control – which is involved in the entire manufacturing process – can be considered the backbone of the industry.
Why do you manage production?
So, what are the effects of performing production management tasks and why is it necessary? Production management aims to maximize profits that can be secured by efficiently managing the overall operations for manufacturing and selling.
To maximize profits, it is important to balance factors such as product quality, manufacturing costs, and time. The process of production control is optimizing the balance of these factors. QCD, or quality of products, costs, and time – or delivery, are considered the three key elements of production control.
- Q: Quality
- C: Cost
- D: Delivery
The purpose of production management is to establish a system of "manufacturing and selling" by optimizing the balance of quality, cost, and delivery.
Importance of production control for the manufacturing industry
The goal of many businesses is to maximize profits. Production control is deeply linked to this purpose, especially in manufacturing.
Most of the critical operations performed by manufacturing relate to efficient production control, which proves how crucial it is to optimize QCD through production management.
What tasks are included in production control?
Let's take a look at the specific examples of tasks related to production management.
Examples of production management tasks
Production management includes the following tasks:
- Demand forecast:
When making a production plan, a demand forecast predicts how much demand there will be based on past sales data and market research.
- Production planning:
Determine the production volume and make a comprehensive plan related to all things production, including materials and material arrival, production numbers, schedules, and more.
- Procurement of materials:
Procure materials for manufacturing, including the selection of materials, where to procure them, what price point, and more.
- Development of production system:
Prior to the start of production, prepare personnel, work locations, necessary equipment and tools, etc. so production can be carried out efficiently and according to plan.
- Production schedule management:
Once production starts, there is an adjustment to work procedures in the manufacturing process, the number of people involved in all processes, the production speed and schedule, etc. each time.
- Outsourcing management:
For outsourced work, manage the quantity and timing of requests, shipping, and receiving.
- Quality control:
Manage the quality of the manufactured products to ensure that the specified quality is maintained.
- Inventory management:
Manage inventory shortages and excesses.
- Shipping management:
Manage the quantity and schedule of product shipments, arrangements for means of transportation, and more.
Utilization of a production control system
Production control operations cover a wide range of areas, with each operation intricately related to another.
For large manufacturing organizations, production management work can be more difficult with just human abilities alone. Because of this, it’s crucial to leverage a production management system to help manage large production volumes and varieties.
A production management system has functions to support production planning, procurement management, manufacturing management, and inventory management.
Challenges faced by production management operations and how to solve them
Production management is complex and covers a wide range of operations, so many companies have chosen to introduce production management systems. Even with a system in place, organizations still face operational challenges.
Common challenges include:
Inability to collaborate between departments or systems
Without communication or information synchronization between departments, or if systems are disparate and not linked, production management becomes more complicated and it becomes difficult to carry out operations effectively.
In some cases, one system is introduced with limited functions. Because of the limited functionality, that system could be unable to integrate with others necessary for production control, for example just an inventory management system alone.
Legacy systems
When different systems are introduced in different departments, some of the legacy systems become outdated without regular updates. When that system cannot be integrated with others, it often is not updated.
Inability to manage operations due to situational circumstances
In manufacturing operations, planned production may not be possible due to various factors.
Organizations may need to change production plans due to factors such as sudden leave of workers, equipment failure, shortage of materials, continuous defects, etc. Companies must respond by changing the production system on a case-by-case basis.
Failure to do so will lead to quality deterioration, cost increases, delivery delays, etc., and the balance of QCD will collapse.
Employee responsible for production control work
It’s no secret; production control work is complicated. This means there is a lot to learn, and it tends to be left to a specific person in charge.
As a result, the burden of work on the person in charge increases, and adverse effects occur when that person is absent.
Planning based on intuition and experience
In some cases, certain workers have been responsible for production management for a long time, and before they know it, production plans are made based on demand forecasts that depend on intuition and experience.
Even if intuition and experience of an expert are leveraged to carry out the work, without a system making objective decisions based on data, the work cannot easily be handed over to another person in charge. With Japan's declining birthrate and aging population, the retirement of skilled workers and labor shortages are becoming more serious, putting production management at risk due to the difficulties of passing on crucial information to the younger workforce. Technology makes this more feasible. It’s essential to standardize production based on data and aim for the optimal QCD balance.
Human error
With a wide range of complicated tasks associated with production management, there’s an increased chance of mistakes occurring.
As production management manages overall production – from procurement to manufacturing and shipping – the impact of these mistakes is increased.
It’s important to set specific rules, comply with them, and devise systems to prevent human error.
Solving challenges by introducing a new production management system
System coordination is required for all operations when it comes to production management. It’s essential to keep an eye on changes in needs and internal resources, and then in turn respond flexibly. To carry out business during ever-changing situations, it’s necessary to keep a critical system up to date.
To solve the challenges above, users must check that each system across departments are linked, or integrated. It’s also essential to make sure all updates are completed.
Additionally, the demand forecast included in production management work is crucial as it directs subsequent work. Increasing the accuracy of demand forecasts will improve the accuracy of all operations.
A production management system that leverages artificial intelligence (AI) is a useful tool to enable highly accurate demand forecasting. Utilizing AI also prevents increased burdens on personnel due to personalization and reduces human error.
Production control crucial for the manufacturing industry
Production management, or production control, is essential as it manages all aspects of manufacturing and selling, which is considered to be the work of the manufacturing industry itself. Many organizations that leverage production management systems manage many operations, and the information for each operation must be integrated.
However, there is a possibility that the operational efficiency of production management will decrease due to the legacy system and lack of interlocking. By updating the production management system and introducing a new system that utilizes AI, issues can be minimized, and the efficiency of production management operations will be improved. This will lead to an improvement in the efficiency of the entire production operation.
