Functions of Production Management

Selection of Product and Design:

• Actually this is the phase in which the consumer needs are studied and are evaluated by marketing department. A product which satisfies the need of the customer is decided. A existing product in market is selected or Research and development division develops a complete new product from scratch or modifies the existing product so that the consumer’s need are satisfied. After selecting a product a right design is selected. Satisfaction of consumer’s need is the criteria for selection of product and its design and at lower cost. At this level techniques such as value engineering and value analysis are used. At this stage involvement of production management is less. Because launching a product is a strategic decision, hence top management (board of directors and owners) are involved in this stage.

Selection of Production Process:

• Process selection refers to the strategic decisions of selecting the kind of production process to have in a manufacturing plant. The process flow in an organization refers to how a factory organizes material flow using one or more of the process technologies including the job shop, batch shop, assembly line, and continuous flows. They must decide about the technology to be used , machines and equipment required, and material handling system, etc. The process chosen depends on the customization of the product as well as the volume required in the market.
• As the production volume of project increases specialized equipment and standardized material are used to minimize cost. The evolution in the process structure is often related to the product’s life cycle stage.
• In this stage flow of raw materials, sub assemblies is decided.

Selecting Right Production Capacity:

• Production manager decides the right production capacity to match the demand for the product as per marketing department. Excess capacity will make machinery and labour idle, while insufficient capacity will not be able to match the demand. The production manager must plan the capacity for both short and long term’s production.
• Capacity selection involves break even analysis.

Production Planning:

• In this stage the production manager decides about the routing and scheduling.
• Routing: Routing can be defined as the process of deciding the path (route) of work and the sequence of operations. It ensures smooth flow of the work and optimum utilization of resources during production. It decides in  advance, the quantity and quality of product, the men, machines and materials to be used, the types and number of processes to be used, the sequences in which the processes or operations to be arranged. the place where the production is to be done.
• Scheduling: Scheduling fixes the amount of work to do. It arranges the different manufacturing operations in order of priority. It fixes the starting and completing, date and time, for each operation. For this different charts and control techniques are used.

Production Control:

• The production manager has to ensure that the production is per the plans. If he finds any deviation in the production, he has to take corrective actions.

Quality and Cost Control:

• To remain competitive in a market the good quality products should be produced at the lowest possible cost. Hence qality and cost control is one of the important function of production management.
• The cost can be controlled by optimum use of resources, minimizing cost of inventory and cost of holding finish goods.
• The quantities of the product  at every stage in production have to be assessed for procurement, storage, quality, and receipt. Information flow at every stage helps to identify the value additions that are taking place. A trustworthy record of the various stages, the time consumed, costs involved, and their impact on other processes helps in identifying the bottlenecks and also the opportunities for improvement.

Inventory Control:

• The production manager must monitor the level of inventories. Due to overstocking the working capital of the firm gets blocked while due to understocking the production schedule is disturbed and delivery of finished products gets affected. Hence the production manager has to maintain proper level of inventory which is neither overstocking nor understocking.
• The concepts of Just-In-Time (JIT) and lean manufacturing are applied to utilize the resources to the best advantage and also to minimize or eliminate inventories.

Maintenance and Replacement of Machines:

• To obtain uninterrupted production the machines and equipments used should be in good conditions. Preventive maintenance is better than break down maintenance, hence preventive maintenance schedules should be prepared. These schedules should not affect the production schedule.
• Continuous inspection (routine checks), cleaning, oiling, maintenance and replacement of old machines, equipments, availability of spare parts, etc. is a task of production manager.

Other Functions:

• Training and deploying the workforce, implementing the procedures for systematic loading of machines, packaging the products for safe distribution and dispatch.

The post Production Management appeared first on The Fact Factor.

What is a Statistic?

• Statistics has been defined differently by different authors and each author has assigned new limits to the field which should be included in the scope of statistics
• Seligman, defines “It is a science which deals with the method of collecting, classifying, presenting, comparing and interpreting the numerical data to throw light on inquiry.
• Horace Secrist defines “It is the aggregate of facts affected to mark extent by the multiplicity of causes, numerically expressed, enumerated or estimated according to a reasonable standard of accuracy, collected in a systematic manner for the predetermined purpose and placed in relation to each other”.
• Prof. Boddington defined “It is the science of estimates and probabilities”.
• Croxton and Cowden define “ It is the science of collection, presentation, analysis, and interpretation of numerical data from logical analysis”.
• A.L. Bowley defines, “It may be called the science of counting and may be called the science of averages”.
• According to King, “It is the method of judging collective, natural or social, the phenomenon from the results obtained from the analysis or enumeration or collection of estimates”.
  We can see that the definition given by Boddington is complete and covers all characteristics of Statistics.

Components of Statistics:

• Collection of Data
• Presentation of Data
• Analysis of Data
• Interpretation of Data

Importance of Statistics in Business and Management:

Accounting:

• Statistical sampling techniques are used during the conduction of audits for clients. It also helps in detecting the trend and make a projection for next year.

Finance and Investments:

• Statistical information can be used to study the trend in securities and that can be used to provide investment recommendations. Statistical methods help in selecting securities which are safe and have the best prospects of yielding a good income.

Marketing:

• Statistical analysis is frequently used in for making a decision in the field of marketing it is the first step to find out what can be sold and to whom. Then using statistical methods a suitable strategy is formulated. A statistical analysis of data on production purchasing power, manpower, habits of competitors, habits of consumer, transportation cost can be done before entering a new market.
• Nowadays electronic scanners at retail checkout counters are used to collect data and to study the buying behavior of the customer. The data obtained in this procedure is used to analyze it to formulate future marketing policies.

Production:

• Statistical methods are used in quality control during the production process. It is also used to control and manage the flow of production. Statistical methods are used in the scheduling of men and machines.

Banking:

• Statistical data gathering and analysis of the information, help banks in their own business and also give an idea of the general economic situation of every segment of business in which they may have interest. Using this analysis they can formulate their lending policies.

Control:

• The management control process combines statistical and accounting method in making the overall budget for the coming year including sales, materials, labor and other costs and capital requirement.

Purchase:

• Purchase department can fix their schedule of purchasing orders depending upon the trends in consumption of raw materials and inputs. Thus they decide what to buy? When to buy? And how much to buy?

Economics:

• Statistical techniques and analysis are used for forecasting the future of the economy. Time series like moving averages, indicators like inflation index are statistical methods. We can consider statistics as the backbone of economics.

Categories of Statistics:

• Statistics is broadly categorized into two parts based on their functions a) Descriptive and b) Inferential.

Descriptive Statistics:

Descriptive Statistics is the term given to the analysis of data that helps describe, show or summarize data in a meaningful way.

• Descriptive Statistics involves collecting, organizing, summarizing, and presenting data.
• It is useful in clinical research while communicating the results with experiments.
• The methods used in statistics are preparing tables, drawing graphs, measuring central tendency, and the variation of the data from the central value.

Characteristics of Descriptive Statistics

• Descriptive statistics do not allow us to make conclusions beyond the data we have analysed or reach conclusions regarding any hypotheses we might have made.
• They are simply a way to describe our data.
• It enables us to present the data in a more meaningful way, which allows simpler interpretation of the data.
• There are two general types of statistic that are used to describe data: Measure of central tendency (mean, median, and mode), and Measure of spread (range, quartiles, absolute deviation, variance, and standard deviation).
• The data is represented by tables, graphs, and charts.
• This provides a quick method to make comparisons between different data sets and to spot the smallest and largest values and trends or changes over a period of time.

Limitation of Descriptive Statistics:

• They only allow us to make summations about the people or objects that we have actually measured.
• We cannot use the data we have collected to generalize to other people or objects. Thus no general inference can be obtained.

Inferential Statistics:

Inferential Statistics are techniques and methods that allow us to use samples to make generalizations about the populations from which the samples were drawn.

• Inferential Statistics involve making an inference, hypothesis testing, relation determination, and making predictions.
• The data obtained in descriptive statistics are analyzed and a valid inference is made out of it for effective decision making for managers and professionals. In this type deductions and conclusions are made regarding the population under study by collecting a sample from the population.

Characteristics of Inferential Statistics:

• They are produced through complex mathematical calculations that allow scientists to infer trends about a larger population based on a study of a sample taken from it.
• Scientists use inferential statistics to examine the relationships between variables within a sample and then make generalizations or predictions about how those variables will relate to a larger population.
• Techniques that social scientists use to examine the relationships between variables, and thereby to create inferential statistics, include linear regression analyses, logistic regression analyses, ANOVA, correlation analyses, structural equation modeling, and survival analysis.
• Scientists used techniques like chi-square and t-test  which tell them the probability that the results of their analysis of the sample are representative of the population as a whole.
• Inferential statistics start with a sample and then generalizes to a population. This information about a population is not stated as a number. Instead, scientists express these parameters as a range of potential numbers, along with a degree of confidence.

Limitation of Inferential Statistics:

• It depends on the data provided (sample selected) and therefore, we cannot ever be completely sure that the values/statistics calculate are correct. There will always be a degree of uncertainty in this study.
• The inferential tests require the user to make educated guesses (based on theory) to run the inferential tests. Again, there will be some uncertainty in this process, which will have repercussions on the certainty of the results of some inferential statistics.

Hypothesis:

The idea you are testing is called the hypothesis. Statistics is used to confirm or refute some idea. Often in statistics, we confirm or refute the null hypothesis, denoted as H0. It is the hypothesis that essentially the results we get are random and are not due to some real relationship. In other words, if the null hypothesis is true, then the apparent relationship is really simply a random coincidence.

Now Watch the Following Video

Next Topic > Characteristics, Functions and Limitations of Statistics

Management > Managerial Statistics > Introduction to Statistics

The post Introduction to Statistics appeared first on The Fact Factor.