Production management subject is being studied under many different headings such as; the production and planning control, the production and inventory control, the production and operational control and much more. Depending on the subject, the content issues on many production and management cases are more or less the same. We first have to look at the idea of the product, production and the management (William 1987, Pp 82).
The product, through various authors, has been described through many angles since it is essential to understand the core subject of production and management. From the consumer perspective, a product is basically the combination of or the optimal mixture of the potential utilities. For instance, the soap can be identified by its complexion, the body cleanliness, the freshness or fragrance of health. Due to this reason, many producers of these products advertise that they are indeed selling health, selling cleanliness or even selling freshness and so on.
The product from the manager’s perspective is basically a combination of various surfaces and processes. The reason for this is because the production manager is responsible solely for producing the whole product. He or she, therefore, has to think of the various ways for which the product can be made so that a concrete plan can be arrived at for undertaking the processes by which a particular model can be manufactured so as to fit in with the required capacity (William 1987, Pp 65).
Production from the financial manager’s perspective is considered as a mixture of various cost elements of which he or she is responsible in terms of the profitability of that product. On the other hand, the personal manager perceives production as a mixture of various skills, they form the people who are responsible for the selection of the personnel and in turn subject these employees to the strenuous conditions in order to meet the demand skills required to produce the product.
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Management is a term that explains the art of science whereby things are done by the stipulated personnel who are involved with planning, coordinating, organizing, directing and controlling of the activities with the aim to meet the specified goals through the process of following the agreed policies. Nowadays, managers require scientific skills as well as the personal abilities and skills in order to manage the employee under them for the purpose of achieving the desired goals (Sun 2008, Vol.2).
The operation management is, therefore, the conversion of the inputs into the required outputs through the use of physical resources in order to provide the desired utilities of forms, places, possessions or the state in a bid to satisfy the customers through efficiency, effectiveness and adaptability. Operation management distinguishes itself from the other functions such as the personnel and marketing. More situations arise that requires complying with the activities of operations and management in order to reach the required goals. Some of these activities include:
- The distribution of items physically to the users or the customers
- The arrangements for the collection of the marketing information
- The actual selections and the recruitment processes
- Flow of the papers and also the conversion of data into information that is essential for the judgment in the court of law.
The scope of production and effective management is measured through various aspects such as the ones discussed below:
- The product – Manufacturing systems always produce standardized products in large volumes. Most plants set finite capacities which are not expected to be exceeded. These facilities constitute mainly the fixed costs that are allocated to the products being produced. The variable costs constitute the activities of labor costs and the material costs. Since the input costs and the output costs are measurable, the effective productivity can thus be measured with certain degree of accuracy. The products can then be transported to the market and stored well until they are sold.
- The services – These activities present more uncertainties with respect to their capacities and costs. The services are therefore produced and consumed in the presence of the consumers or customers. Organizations that deal with large service activities such as the Hotels, Hospitals and the Transport organizations are expected to possess higher capacities which are sufficient enough to accommodate highly viable demands. Some services like the legal practice firms do require professional and intellectual judgments hence making it difficult to standardize the costs (Russell 1987, Pp 45).
- Project – Most of the project systems do not produce standardized products. The machinery, men and the materials are often brought to the project sites so that they can, in turn, be completed. Thus, the costs are calculated and allocations distributed to certain projects for the considerable accuracy, the productivity can thus be measured. Once all the projects are dully completed, all the recourses are then removed from the sites (Carey, 1986. Pp 44).
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There are various benefits associated with the efficient production and operation management issues. Some of them are as stated below:
- The customer – He or she benefits from the improved industrial productivity and hence the increase in the use of the value. The products are readily available for them at the right price, right place, right time, and right quantity as well as in their desired quantitative nature.
- The investor – In most cases, the investors enjoys the increased security for their respective investments, adequate market returns and also the credibility of the good image in the society in general.
- The employee – He or she is able to get the adequate wages and also the improved job security. Improved working conditions are also an added advantage as well as the personnel job satisfaction.
- The suppliers – In most cases benefits from gained confidence due to good management since their goods are realized without any delays.
- The community – In most cases the community enjoys the benefits from the economic and social stability. This, as a result, enhances a manageable economy.
- The Nation – It enjoys the benefits of improved trade relations and the more revenue collected from good improved business relations. Prospects and security are also some of the more added advantage. This indeed increases the productivity and hence the healthy business environment (Resa 1988, Pp. 66A).
In as much as we want our businesses to grow and continue making huge profits, there are some key issues which prove to be the key stumbling blocks in the success of business operations. Some of these problems are reviewed in details by the operations management. Below are the major key problems associated with the effective production and operation duties:
- Wrong selection of materials: The production managers are given the mandate to select the effective materials that are easy to get and within the reach of the company. However, most managers opt for cheaper deals thus end up picking low-quality materials with the pretext of cost leadership. Cost leadership should be aimed at reducing the production costs in as much as possible while ensuring the quality is maintained. These cheap deal transactions, however, reduce the company’s reputation and hence reduction in the volumes of sales (Cynthia 1986, Pp 20).
- Wrong choice of methods: when unqualified staff are given the mandates to conduct both the operation and production duties, cases of poor methods beings used in the company’s activities, never cease to replicate altogether. These methods are most dangerous since they cannot be easily detected.
- Biasness in the award of credit: Every organization which has the desire to meet the high goals set for the purpose of growth is expected to be the major motivation factor to its customers as well as for its workers. Most organizations however use the tribal and relational motives when awarding the gifts and promotions. Since no credit is considered when giving out promotions, the brilliant and creative minds opt to quit or keep a low profile.
- The machines and equipment: These are the key essentials in the production and marketing of the business activities. Lack of enough machines and the required equipment standards makes it hard for businesses to produce quality goods while at the same time limiting the chances of expansion (Ralph 1987, Pp. 1).
- Poor marketing strategies: Any successful business should embark on deploying qualitative marketing strategies. Lack of the advanced technology needs such as the internet and media is the key cause of this problem.
- Poor Estimations: These are the approximate figures that are given to the management on behalf of the business for the purpose of future expenditure planning. When poor estimations are given, there are high chances that more products will be produced in the long run thus leading to the pulling of the products in the stores (Michael 1988, Pp 30).
- Poor record keeping: It is essential for any organization to have very qualified staff to do the activities or record keeping. This is where the successful businesses make decisions from before deciding on the spending capacities. Lack of accurate records will lead to poor decisions concerning the management hence affecting the business as a whole.
The Case Study
The Hudson’s Alpine Furniture is a strategic company that is situated in the perfect business environment. This is because of its strategic location. The Company is situated near the required resource materials since most of these materials are the timbers which are sourced from the local area. It is also a perfect business in the sense that they are the pioneers in the furniture business industry since there are no stiff competitions. The market is also readily available since the ski lodges were the only target market and were located in the near locality. In as much as the company is making quite adequate sales and continues enjoying the market, the company is not giving good returns. This information is sourced from the auditing performed by the firm’s accounting information. These are caused as a result of poor management as the ones discussed in the literature review. The company is for sure enlarging and making more sales but the returns are not what they should be because of the following reasons:
- Different Locations and Independent Production: Most of the production equipment is stored at different areas. This is stipulates a much higher cost to the Hudson’s Alpine Company. Extra costs like transportation of the products to various areas where the necessary material are positioned for completion. The employees at these companies are independent and the entire work on the furniture products are done individually. This as a result can cause low quality work and hence piling of stock in the pretext of making more profits.
- Poor Planning and Lack of Expansion Plan: This is the main reason behind the excess piling of products. It is because the company is concentrating more on the expansion of the amount of custom products while at the same time, the operations in charge of marketing cease from conducting an effective job to ensure the manufactured furniture are sold. The business is incurring more expenses on hiring privately owned warehouses to stock these excesses of furniture manufactured. Any business is expected to have adequate space for expansion in their strategic plans. The Hudson Alpine Furniture seems to be lacking efficient planners in the management strategies (John 1988, Pp. 45).
- Increased Demand and Price Standardization: In the Hudson’s Alpine Furniture case, there is a readily available market. This is evident since the Hudson’s Alpine sells its product to the new private business cartels. This, as a result, enhances the chances of the company selling low quality products since there are no strict standard measures which are required by their customers. Although sales are reported to be increasing, these figures do not really reflect on the final balance sheets. The reason might be some of the sales made are sold at losses since the type of transactions which are being offered are based on the lack of adequate restrictions between the trading partners. The managers in charge of production as well as the operations. In this case there are no panels or rather departments set aside for the purpose of establishing the prices for various products and determine ways through which tenders are allocated.
- Finally, the company is perceived to have placed so much attention on the production of commercial products overlooking the initial objective for serving the customized products clientele. This phenomenon has limited the Company bulky sales and which enhances the respective errors which are normally prone from the calculations made on small scale transacts. It is also essential since the future market can be predetermined and hence curb the problem of excess piling of stock (Eugene 1987, Pp 37).