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Operations Management - Introduction to Operations Management

Objectives of Production Planning - Introduction to Operations Management

   Posted On :  22.06.2018 07:07 am

The need, main functions or objectives of production planning in any organisation could be:

Objectives of Production Planning
 
 
The need, main functions or objectives of production planning in any organisation could be:
 
1. Effective utilization of all the resources in the organisation
 
2. Steady flow of production process without any hurdles / bottlenecks
 
3. Estimate the resources – men, machinery and material requirements for the future
 
4. Ensures optimum inventory level, without blocking the organization’s resources

5. Co-ordinates activities of various departments
 
6. Minimize wastage of raw materials
 
7. Improves the labour productivity
 
8. Helps to capture the market
 
9. Provides a better work environment
 
10. Facilitates quality improvement
 
11. Results in consumer satisfaction
 
12. Reduces the production costs
 
13. Now let’s discuss each objective of production planning one by one
 
We will give a brief introduction about these points in the following paragraphs.
 

1. Effective utilization of resources

 
 
Production planning results in effective utilization of resources, plant capacity and equipments. This results in low-cost and high returns for the organization. Thus, the operations manager in charge, need to have discussion with various departments – such as purchases, inventory, sales and human resources to arrive better utilization of all the resources.
 

2. Steady flow of production

 
 
Production planning ensures a regular and steady flow of production. Here, all the machines are put to maximum use. This results in a regular production, which helps to give a routine supply to customers. Moreover, to ensure the steady flow, the plan should include an element of human resource plan to maintenance of all the equipments.
 

3. Estimate the resources

 
 
Production planning helps to estimate the resources like men, materials, etc. The estimate is made based on sales forecast. So production is planned to meet sales requirements.
 

4. Ensures optimum inventory

 
 
Production planning ensures optimum inventory. It prevents over-stocking and under-stocking. Necessary stocks are maintained. Stock of raw material is maintained at a proper level in order to meet the production demands. Stock of finished goods is also maintained to meet regular demands from customers.
 
 
 

5. Co-ordinates activities of departments

 
 
Production planning helps to co-ordinate the activities of different departments. For instance, the department has to coordinate with marketing department to set the targets / goals for production department to sell the goods. This results in profit to the organization.
 

6. Minimize wastage of raw materials

 
 
Production planning minimizes wastage of raw materials. It ensures proper inventory of raw materials and materials handling. This helps to minimize wastages of raw material and ensures production of quality goods. This will result in minimum rejections; thus, proper production planning and control results in minimum wastage.
 

7. Improves the labour productivity

 
 
Production planning improves the labour productivity. Here, there is maximum utilization of manpower. Training is provided to the workers. The profits are shared with the workers in form of increased wages and other incentives. Workers are motivated to perform their best. This results in improved labour efficiency.
 

8. Helps to capture the market

 
 
Production planning helps to give delivery of goods to customers in time. This is because of regular flow of quality production. So the company can face competition effectively, and it can capture the market.
 

9. Provides a better work environment

 
 
Production planning provides a better work environment to the workers. Workers get improved working conditions, proper working hours, leave and holidays, increased wages and other incentives. This is because the company is working very efficiently.
 

10. Facilitates quality improvement

 
 
Production planning facilitates quality improvement because the production is checked regularly. Quality consciousness is developed among the employees through training, suggestion schemes, quality circles, etc.
 

11. Results in consumer satisfaction

 
 
Production planning helps to give a regular supply of goods and services to the consumers at far prices. It results in consumer satisfaction. If the product / brand are not available regularly in the market, it will create lot of chaos in the market and in the consumer mind. Also, there is a scope for the firm to lose the market share to the competitors.
 

12. Reduces the production costs

 
 
Production planning makes optimum utilization of resources, and it minimizes wastage. It also maintains optimum size of inventories. All this reduces the production costs. Thus, in the planning, elements of financial implications are also involved.
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