The production management is concerned with the effective management of resources used to provide goods and services. This manager will therefore make decisions that will affect the management as follows:
• Planning decisions
a) Product: The production manager is concerned with the design, quality, quantity, reliability, selection, forecast, selling price and delivery of the product to the target market and will take decisions and activities such as
– Planning and designing new products
– Planning the network of the production department to determine the level of production processes in future.
– Determine the expected product demand.
– Draw up production specifications which includes operations that are to be performed in producing the products so as to fulfill the expected demand.
– Identify the resources that will be required i.e. plant facilities, labour, time, materials and how the work is to be assigned to different machines or departments in advance.
– The manager must decide on the appropriate stock levels to be maintained so as to ensure no shortages while at the same time minimizing costs.
– He must also make decisions regarding the expected quality levels to be maintained in the organization.
b) Plant: The manager will also make decisions regarding the location of the plant and other capital expenditure plans such as expansion or modernization of facilities. He will also make decisions regarding the utilization of the plant capacity to meet forecasted sales demand.
c) Other decisions will be made regarding staff in the production department, when to hire additional staff and their training.
• Operating decisions are concerned with the actual work of the department and include putting the plans into effect as well as control decisions. Some of the decisions the production manager will make include:
a) Product: He will decide on when production will be undertaken. During the production process, he will monitor and ensure that nothing goes wrong e.g. if there is a breakdown in machines, he must decide on repairs and ensure production continues.
b) Plant: the manager makes decisions on the maintenance of machines – when they are to be undertaken, purchases of spare parts etc.
c) Technology: this is the actual process used to transform raw materials to finished goods. Will it be labour or capital intensive?
d) People: the manager will decide who to promote, replacement of employees, overtime, recruit etc.
e) Other operational decisions include investigating variances from plans and instituting corrective action.