Production

Introduction to Production and Materials Management

INTORDUCTION 

This is one of the major branches of ERP, which handles diverse aspects involving production planning and implementation. The range of topics includes forecasting, scheduling, ordering, and quality control.

PRODUCTION MANAGEMENT 

According to Wikipedia –

“Product management is an organizational lifecycle function within a company dealing with the planning or forecasting or marketing of a product or products at all stages of the product cycle”. 

Production management concerns the manufacturing of goods. Product management applies the same concept of product marketing. These two branches share the same goal. This results in producing a product.

Producing a product as per the goals will maximize company’s profit. However, several subtle differences exist. 

One of them is product management. Product management deals with how the company operates when it comes to producing the product. This primarily focuses on how the product is being sold to the public. 

On the other hand, product marketing is all about how the product is selling in the public. 

Product marketing focuses on the ways how the product can be successful in the market. A business can deploy means of making the product successful in the market. The range of activities involve advertisement, promotions and even gifts. 

Business owners notice a direct relationship between product management and product marketing. This is a very important task for the manager in production management. It is because they have to communicate with product marketing.

Business owners have to determine out what the market is seeking. This is likely to translate the idea of the type of product to be produced.

Many well-known software applications support product management. Some of the examples of software applications for product management are 

  • Oracle 10g database produced by Oracle 
  • SAP R/3 ERP made by SAP AG, etc. 

These software applications will help a company in understanding how the product can market better and produce a successful product.

MATERIALS MANAGEMENT 

Materials management is different from production management. This primarily focuses on mainly with tangible components. Based on Wikipedia, materials management can be defined as follows:

“Materials management is the branch of logistics that deals with the tangible components of a supply chain. Specifically, this covers the acquisition of spare parts and replacements, quality control of purchasing and ordering such parts, and the standards involved in the ordering, shipping, and warehousing the said parts.”

This management plays a crucial role for companies especially in manufacturing companies. Materials form the major components in production. If company can’t manage their inventory, a higher profit is likely to be yielded. 

Companies can purchase the most beneficial amount of materials. As a result, they stand to obtain a higher profit. 

This is because insufficiency of materials that make products will result in inefficiency. Companies will be unable to sell desired amount of products. Too large number of materials in access can lead to high amount of inventory cost, which will also lead to decrease in profit. 

Thus, the flow of the materials in the production cycle plays an important role in obtaining high profit. Moreover, companies are able to well manage their business and derive high profit.

One example of material management is MAX material manager. Manufacturing Applications eXperts, Inc., produce MAX Material manger. A company can manage its materials through material management. 

The company will be able to keep track of their inventory. Tracking inventory reveals how many goods go into inventory and used in production.

There are several product cycles that determine how the company supports itself. There are some of the links that will direct us to the understanding of the cycle. 

MATERIALS MANAGEMENT 

Materials management is a function. This type of management facilitates an integrated approach towards the management of materials in an industrial undertaking. 

This type of management is aimed at cost reduction and efficient handling of materials. This movement has to be ensured at all stages and in all sections of the undertaking. 

Its function takes several important aspects into consideration. The aspects are connected with the material, such as inventory control, material handling, purchasing, storage, standardization etc. Materials management is defined as

“the function responsible for the coordination of planning, sourcing, purchasing, moving, storing, and controlling materials in an optimum manner so as to provide a pre-decided service to the customer at a minimum cost”.

From the definition, business students will find the scope of materials management vast. The functions of materials management can be categorized in the following ways:

  • Material Planning and Control
  • Purchasing
  • Stores Management
  • Inventory Control or Management
  • Standardization
  • Simplification
  • Value Analysis
  • Ergonomics
  • Just-in-Time (JIT)

The above-mentioned functions of materials management play an important role in management.

MATERIALS PLANNING AND CONTROL 

Sales forecast and production plans determine how the materials planning and control is being done. This involves estimating the individual preparing materials budget, scheduling the orders, requirements of parts, forecasting the levels of inventories, and monitoring the performance in relation to production and sales.

OBJECTIVES

Assimilate production and materials management implementing a World Class Manufacturing strategy.

Ensure all organization levels understand in order to increase the production performance and enforce materials management practices.

Determine production rates and material flows by creating a single, integrated process.

Production management requires complete coordination in all aspects. A rate-based and due date-driven method makes sure such management system in place. So, make sure your business establishes such a system.

SUMMARY 

Production and materials management plays an important role in all aspects of production planning and management. Business owners will be able to forecast, schedule, and quality control through production and materials management. 

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