BCom Notes Part I Business Creating Goods and Services

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Creating Goods and Services

Production Control Production control consists of a well defined set of procedures that has its objective, the coordination of all the elements of productive process men, machines, tools and materials into a smoothly flowing whole, which results in the fabrication of products with a minimum interruption.

Management is responsible to see that all business plans are properly adhered to and the standard sets are attained. Production control therefore involves in control of cost, quality, and time of production. An effective system of production control minimizes the idleness of men and machines, optimizes the number of setups required, keeps in process inventories at a satisfactory level, reduces material handling and storage costs and consequently permits good quality and sufficient quantity of production at low unit cost.

Steps in Production Control

The basic steps in production control, in occur in which they occur are:

(a) Planning

Planning is the part of production control that determines which materials and work are needed in order to produce the products offered from the manufacturing division. Each order is broken down into its basic parts on a bill of materials, which lists all the materials, parts and sub assemblies needed to complete that order. The time needed to supply all required materials must be determined, and thus must be indicated to other production control personnel. Further, the production controller has to determine whether the required equipment and trained employees are available for the job at band.

(b) Routing

Routing is the part of production control that determines which route, or path the work will take through the factory and where and by whom the processing shall be done. This requires the production controller to know in detail how each machine operation or work process is performed. Route, sheets are prepared to show the sequence of operations for all parts and materials and for all activities. Route charts are constructed to indicate the production processes. A route file is constructed that consists of all the necessary job tickets required to move the materials out of stock to the various machine positions.

(c) Scheduling

Scheduling involves the getting up o the time tables that will govern the movement of the work, which is subjected to the various fabricating processes. For this, the production controller ha to understand the nature of work and workload capability of each department. After reviewing them he prepares a master schedule, which indicates the number of finished products that will come off the assembly each month or weak until the order is completed. When the job on hand involves several departments, a weekly departmental schedule is used to show the expected production from each department for each week of the total production period. Finally load ahead schedule is prepared to indicate the amount of back work that must be processed in each department before it can handle new work.

(d) Dispatching

dispatching is that part of production control that releases final work orders to the operating departments. it is the step where work order spell out which work is to be done and the amount of time estimated for its completion. Besides authorizing the department to proceed with work on the job, the work order states the priority of the work and gives necessary instructions about it.

(e) Performance Follow-up and Control

Lastly, the production controller must verify or assess the performance results. for this purpose elaborate control boards are some time set up, utilizing various printed forms that show the progress of the work section wise or department wise and serve as indicators of satisfactory or unsatisfactory performance. Many managements use schedule performance reports for this purpose. These reports are issued by the production controller, but the information on them comes from the operating departments. The report compares what was accomplished with, what was assigned and scheduled. Additional follow up control is achieved through scrap reports. They show which work was rejected by inspectors, and why and what is to be done with rejected products.

The Emerging Service Industry

Service industry has gained prominence during the last two decades. Principles of production management applicable to manufacturing industry apply to service industry also. The difference between the two types of industries is of nature of product. One producers goods (tangible) whereas the produces services (intangible). Banking, insurance, transportation, hotels and motels are engaged in production of services for customers. As such, planning is as important in banking a in steel industry. Routing must be of a major concern to a taxi driver. Scheduling should be important for doctors for listing patients.

The characteristics of most of the service industries are as follows:

1. There is no inventory of completed products in stock. It is so because an unsold airline seat cannot be restored for the future.
2. Preferably operated under single ownership, because the initial investment involves small capital.
3. Operation area usually remains limited because it needs personal attention and supervision.
4. In a service industry, skill is more important than capital.
5. Labor is the largest expenditure because of the smaller investment and importance of skilled personnel.
6. The product is often intangible and consists of maintenance. Haircuts, health care and entertainment need to be replaced on a regular basis.