Project management in production

Production management refers to the application of project management principles to the production process in factories.

Production management, also called operational management, is based on the planning and control of industrial processes, in order to ensure their smooth movement at the required level. Production management techniques are used in the service and manufacturing industries.

It is a responsibility similar in level and scope as other specialties such as marketing or human resource and financial management.
In manufacturing operations, production management includes responsibility for product and process design, planning and control, including capacity and quality, and workforce organization and supervision.

According to E.L. Brech:

 "Production management is the process of effectively planning and regulating the business of that part of the company that is responsible for the actual transformation of materials into finished products."

Background and related areas

Modern project management theory and techniques began with Frederick Taylor and Taylorism Scientific Management in the early 20th century, the emergence of mass production.

It was further perfected in 1950s, with techniques such as the critical path method (CPM) and program evaluation and review techniques (PERT). The use of CPM and PERT became more common as the computer revolution progressed.
As the field of project management continued to grow, the role of project manager was created and certification organizations such as the Institute for Project Management (PMI) emerged.

Operations management is a field of science that originated in the modern manufacturing industry and focuses on modeling and controlling actual manufacturing processes. The practice is based on the definition and control of production systems, which usually consist of a series of input data, transformation activities, inventories and results.

Production management applies the theory and results of various disciplines known as operational management, operational research, waiting theory, and industrial engineering to project management and execution.

Six “M’s”

Production management includes planning, organizing, directing and executing production activities. The ultimate goal of any production management solution is to turn raw materials into a finished product.

Some call production management a 6 "M" merger:

  • Men
  • Money
  • Machines
  • Materials
  • Methods
  • Markets

“Men” refers to the human element in operating systems. Since the vast majority of production staff work in the physical production of goods, “managing people” is one of the most important responsibilities of a production manager.

The production manager must also select the machinery and methods of the enterprise, first selecting the equipment and technology to be used in the production of the product or service, and then planning and controlling the methods and procedures for their use. Flexibility of the production process and the ability of workers to adapt to equipment and schedule are important issues at this stage of production management.

The responsibility of the production manager for materials includes the management of flow processes - both physical (raw materials) and information (paperwork). The smooth movement of resources and data flow is largely determined by fundamental choices in the product design and process to be used.

Caring for money or expenses explains the importance of financing and using assets for most manufacturing organizations. A manager who allows the creation of surplus inventory or who achieves a level of production and continuous operation by sacrificing good customer service and timely delivery risks that excessive investment or high running costs will erase any temporary competitive advantage that may have been gained.

4 key phases of production management

The goal of all manufacturing companies is to maximize profits. This happens through a well-designed manufacturing process that continuously strives for improvements and achieves efficiency. This process requires sound production management to achieve these gains and apply them in all areas.

As an integral part of overall business management, production management is the process of converting raw materials or components into finished products. Management of physical materials, compliance with project specifications, use of equipment, performance and manpower to implement the company's production strategy.

Production management requires coordination and supervision of people, materials and equipment.

This requires managers to continuously make decisions in four key areas:

Production planning

Production planning is the phase in which the main schedule is made. It requires managers to decide where production will begin. For example - which machines or which object.

It is also necessary to decide when production will begin. Different products are made at different speeds and require numerous inputs to complete the process, so the timing decision is based on the overall product range.

Production control

Production control is the application of design specifications at the production level of the hall. Here, much like a traffic officer at a traffic intersection, managers direct staff and equipment to take steps to complete their part of the finished product.

This also includes active management according to quality standards, as well as close monitoring of production speed according to established, predetermined working hours.

Process improvement

All production managers are responsible for monitoring and continuously initiating improvements. Many companies can use methodologies like Lean or Six Sigma to formalize efforts, but even without such methodologies no process is static, and production management requires reliance on purification and approval of equipment and production activities at the production hall level.

Equipment maintenance

Just as production managers must supervise and train staff to perform tasks effectively, so equipment must be managed to keep it in optimal condition.

Maintenance costs are usually inserted into finished products at cost, especially for manufacturers who use a cost system to determine costs and prices. Therefore, overall equipment efficiency (OEE) is vital.

What changes does production management bring?

Applying management theory to the production process itself brings some of the key changes in such an organization.

Toyota is one of the companies whose example we can show you some of the key changes and features of the introduction of production management:

Shorter setup times

By their nature, all installation procedures result in waste; connect work and equipment without adding value. Training, improved efficiency, and giving workers responsibility for their own tasks have enabled Toyota to shorten setup time.

Employee empowerment

Dividing the workforce into small teams and giving responsibilities for maintenance and various other tasks have been shown to improve efficiency.

Teams are assigned to leaders, and workers in those teams are trained on maintenance issues - allowing them to deal immediately with delays in the production process.

Equipment maintenance

Workers on the line are in the best position to deal with mechanical failures and subsequent repairs. They can react quickly and often to problems without supervision, allowing the production process to begin much faster after shutdown.

Pull Production

In an effort to reduce inventory costs and delivery times, Toyota has launched a system whereby the amount of materials, labor and energy consumed at each stage of the process relies solely on demand for products from the next stage of production.

It was often called Just in Time (JIT), and this principle aimed to produce goods solely according to the demand for them at any given time, thus eliminating unnecessary costs.

Supplier involvement

Toyota has shown that dealing with suppliers of components and raw materials as part of its own manufacturing process has led to a number of benefits.

Suppliers are trained in Toyota processes, machines, inventory systems, and setup procedures. As a result, their suppliers were able to respond positively and quickly when problems arose.

Why is production management important?

Without effective management of production processes at the production hall level, errors and inefficiencies would be more common in the factory. There are other reasons why production management is important for business:

Reduces production costs - by maximizing results while minimizing input, production management reduces the costs required to produce finished products. This can be used to improve the profit margin or it can be passed on to the customer to ensure a competitive advantage.

Improves competitiveness - Knowing that the right products are available on time and will be delivered on schedule means that the company is always competitive in any market.

Meets business goals - production management helps companies to produce finished products efficiently. Because these finished products are always made with high quality and delivered as needed, companies can take advantage of these things to grow their business, provide capital to improve and increase customer satisfaction.

Improves brand image - Many manufacturing companies today are fully active in D2C production - Directly to the customer. As a result, branding and brand image have become important. Good production management means that customers rely on products and can have confidence in their quality and availability, thus improving the brand image. Overall, a good brand image is important whether your products are Engineer-to-Order (ETO), Make-to-Order (MTO) or Make-to-Stock (MTS).

Optimizes resource use - production management means that work, equipment and resources are optimized in the production effort. This can reduce waste levels and create a positive and balanced environment for employees. With an emphasis on today’s work-life balance and green carbon reduction initiatives, efficient production management that optimizes resource use can help achieve both of these trends.

Advantages of production project management

Effective production management is crucial in today’s production environments. Without this, production processes cannot meet the company’s goals. But with good production management, companies can reap several benefits regardless of their size.

These benefits include:

  • Better quality - products made on well-maintained equipment, with the help of trained workers, will result in finished products of higher quality. This requires a balance between all of these variables and others to help managers, supervisors, technicians, and operators notice deficiencies before they occur. The systematic program will create standard operating procedures (SOPs), standard working documentation, and built-in audit procedures for doing so.
  • Lower levels of waste - waste is hazardous in any process. However, efficient production management enables the development and application of procedures that reduce waste to the lowest possible level. Without it, rejection, waste and over-processing will increase production costs and reduce profitability. But waste is not just physical rejection. Waste may also include unnecessary or unnecessary operator movement. Production management relies on principals who also reduce these types of waste.
  • Lower operating costs - Regardless of the costing method, cost reduction is always high on the list of priorities of managers and business owners. Efficient production management techniques and systems reduce costs by providing mechanisms and methodologies to identify, analyze, and change processes to make the production method as cost-effective as possible. Applying these techniques to all variables reduces costs cumulatively.
  • Better decision making - A healthy production management system involves the use of data to help managers assess factory progress. This includes things like operator output, equipment performance and efficiency, quality monitoring methods and others. With these tools, managers can identify differences that could affect quality, production time and deficiencies and proactively address them.

Production management software

Although the concept of systematized production management is not new, with the advent of the digital age, companies have at their disposal tools that were not possible before.

Production management software can take the system described above to the next level, by further focusing on improving all areas by identifying deeper levels of data that can be translated into improvements. It also automates many functions by reducing time and human error.

Here are some benefits that production management software can provide:

Working in the Cloud 

Most software solutions available today are cloud-based. This means that vendors using these platforms do not need to have a strong infrastructure or IT presence to set up.

This is especially important for SMEs that may not have internal knowledge of IT and may not be able to afford a traditional enterprise-level system. It also means companies always have access to the latest version of software - eliminating the need for expensive and time-consuming occasional upgrades. The MachineDesk SaaS cloud system provides access to all data in real time, no matter the location, all you need is Internet access.

Easy to use

The software is also easier to use with intuitive dashboards, drop-down features, and drag-and-drop features to simplify tasks. This can be in the form of drag and drop or perhaps in the automation of the purchase process.

In cases like these, rule-based logic can automate these and other tasks to eliminate the need for manual monitoring.

And since the data being analyzed is real-time, that means those functional areas are optimized. Finally, intuitive and user-friendly platforms reduce training time and costs associated with steep learning curves.

Analytics

Today's production management software uses deep analytics to automate and create more accurate displays of workflows and overall production operations. This includes inventory reporting, work and labor utilization, equipment loading, and more.

It adapts the material proposal to the direction of production and uses real-time production performance data to maintain compliance with standards and enable managers to make real-time decisions with accurate data.

With the help of the MachineDesk production management system, all phased production data, machine status, plans, etc. are available in one place and provide key introductions for making timely and accurate decisions.

Interoperability

One of the traditional obstacles to better production management has been the existence of isolated data. Because each individual department and area of support maintained its own data management system and software, the data was not real-time and had to be reconciled before it could be acted upon at higher levels.

Today, production management software can be integrated through APIs with other third-party programs. This allows it to become part of an end-to-end ecosystem for managing business practices.

Its real-time flow and integration of production data can be linked to financing systems, billing systems, quality management and others to ensure seamless integration and more complete visualization of production and its overall impact on business.

Flexibility

Agility and flexibility are important in today’s hypercompetitive markets. And production management software is customizable to allow companies to take advantage of flexibility and use only those features they need.

This allows manufacturers to use only the features they need, reducing clutter in the user experience and improving efficiency. It can be used specifically for manufacturing but is flexible and agile for CRM module engagement, inventory control, supply chain management and procurement.

This is very valuable for SMEs whose staff often perform tasks and duties in several departments or functional areas and who need a comprehensive production management system linked to a larger set of functions. The MachineDesk system in its modules includes all departments of the production company - from warehousing and inventory management, production and machinery, to employee and customer management.

Conclusion

For production, project management is the systematic use of techniques and methods that allow managers to control the production and delivery of products at the lowest price and high quality and the implementation of business objectives. It can be implemented in any factory, regardless of the size of the company, and improved by the use of production management software.

There are countless benefits from applying the basic principles of production management; they include a good reputation in a particular market and the ability to develop new products and bring them to market quickly.

Reducing costs at each stage of the production process provides the main benefit of reducing a company’s total costs. Manufacturers do not want to create costs when there are no orders, and an effective production management solution should not make this an achievable goal.

Because companies that adopt production management principles can firmly manage their costs, they have a competitive advantage in the market, and this can allow them to grow faster than would otherwise be the case.

Klara Markotić
Content Creator at MachineDesk with a particular interest in marketing and social media.
marketing@machine-desk.com