The Importance of Production

Management
Manufacturing is a wealth producing sector of an economy. In the last
decades there has been a tendency to outsource manufacturing to
countries with lower labor costs and fewer regulations. But these trends are
changing, particularly because developing countries have increased their
labor costs, introducing more and more environmental and labor laws.
Even if they are not at the level of developed countries yet, the tendency to
adopt these regulations is there. Production in the US is a realistic option
now. However, as a small business owner with manufacturing in the US,
you have to manage your production process very carefully.

Todays manufacturing process requires:

Improve productivity
Use of industrial symbiosis
Avoiding physical hazards to the employees
Eliminating harmful materials

In addition, environmental law, labor laws and other restriction have a huge
impact on the cost and efficiency of manufacturing.

An important tool is Manufacturing Process Management, a collection of

technologies and methods used to define how products are to be
manufactured.

Production process planning

This is an important tool for the production process which can have a major
impact on productivity. It is the process of arranging, controlling and
optimizing work and workloads in a production or manufacturing process.

Scheduling is used to allocate plant and machinery resources, plan human

resources, plan production processes and purchase materials.

Usually there is either forward or backward scheduling.

Forward scheduling: Planning the tasks from the date resources become
available to determine the shipping date or the due date.
Backward scheduling: Planning the tasks from the due date or required-
by date to determine the start date and any changes in capacity required.

Production scheduling brings many benefits such as inventory reduction,

increased efficiency, optimized labor, accurate order and delivery date
quotes.

Production Organization Systems

Two of the most effective systems on the market are Kaizen and Six
Sigma.

Kaizen is Japanese and means change for better. Transferred to a

business sense it means continuous improvement. In a production
process it means a permanent improvement along the whole production
process, including connected processes like purchasing and logistics. This
system leads to lean manufacturing. The Kaizen methodology includes
making changes and monitoring results. Basically the Kaizen process
never ends. Toyota is one of the most famous practitioners of the Kaizen
process.

Six Sigma is a set for techniques and tools for process improvement,
developed by Motorola in 1986. Jack Welch took it for his central business
strategy at General Electric in 1995. Six Sigma improves the output quality
of the process, by identifying and removing the causes of defects and
minimizing variability in manufacturing and business processes. It uses a
set of measurement methods, most of which are statistical. Additionally, it
creates experts in the use of these methods (Champions, Black Belts,
Green Belts etc.) within the organization. Each Six Sigma project carried
out within an organization follows a defined sequence of steps and has
qualified value targets.

Today the tendency is to combine Kaizen (lean management) with the Six
Sigma (production measurement) methods.

Alliance SBDC Business Consultants can provide guidance and support

to help you implement this type of advanced production management and
planning