Read this article to learn about the objectives and intermediate objectives of production management.
Objectives of Production Management:
The objective of the production management is stated as:
To produce goods services of right quality and quantity at the predetermined time and pre established cost.
Thus the objectives of production management are reflected in:
1. Right Quality
2. Right Quantity
3. Predetermined time
4. Pre established cost (Manufacturing cost)
1. Right Quality:
The quality of the product is established based upon the customers’ needs. Customer’s needs are translated in to product specifications by the design or engineering department. The manufacturing department then translates these specifications in to measurable objectives.
Thus the cost quality trade off decides the final quality of the product. Thus a proper balance must be obtained such that the product quality offered to the customer should be within the pre-established manufacturing cost.
2. Right Quantity:
The manufacturing organisation should produce the products at the right number.
If the products are produced in quantity excess of demand the capital will block up in the form of inventory and if it is produced in quantity short of demand, there will be shortages of products. Thus a decision is to be taken regarding how much to produce. (Right quantity)
3. Manufacturing Costs:
Manufacturing costs are established before the product is actually manufactured. The manufacturing department has to manufacture the products at the pre-established cost. In any case, any variation between the actual costs and the standard (pre established) should be kept at minimum.
4. Manufacturing Schedule:
Timeliness of delivery (schedule) is one of the important parameter to judge the effectiveness of production department. There are many reasons like non-availability of materials at right time, absenteeism, machine break down etc. Which affect the timely completion of the products. So the manufacturing department should organize its activities in such a way that the products will be manufactured as per schedule.
To achieve the above objective, the manufacturing/production department has to make the optimum utilization of various inputs like men, material and machine. So to have a better utilization of resources, the production department has to achieve the other objectives, which are lower in the hierarchy. These objectives are called intermediate objectives and are going to optimize the utilization of resources.
The intermediate objectives can be stated in terms of:
1. Machinery and Equipment’s:
The objective concerned to these areas is that the machine and equipment should be such that they should be able to produce the products as per the specifications and accuracy required. The total cost of procurement and running cost should be minimum. Once the machines are procured and put to productive use, then the next objective is to utilize these resources to the maximum extent.
The materials should be made available when required as per the specifications (shape, size, quality etc.) and at the most economical price. The production department should aim at maximum utilisation of the material with minimum wastage and scrap.
Manpower is an important resource or input to production and the success of production depends to a greater degree upon the type of manpower an organisation possesses. Thus, there should be a perfect matching between the workers & jobs and the manufacturing department climate should be such that the potential skills and energies of the workers should be channelized in to constructive outputs. The objectives are set with respect to productivity per worker labour turnover rate, safety and industrial relations etc.
4. Supporting Services:
This helps indirectly to achieve the other objectives and adequate provision of the services helps to utilize other inputs effectively. The objectives should be set for each of the services like water steam, power, material handling, etc. Thus intermediate objectives are supporting to the primary objectives. The achievement of these objectives helps the company to satisfy the customer needs and increase the market share resulting in increased profitability.