The need, main functions or objectives of production planning in any organisation could be:
Objectives of Production
The need, main functions or objectives of production
planning in any organisation could be:
utilization of all the resources in the organisation
flow of production process without any hurdles / bottlenecks
the resources – men, machinery and material requirements for the future
optimum inventory level, without blocking the organization’s resources
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.
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
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.
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.
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.
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.
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.
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.
Tags : Operations Management - Introduction to Operations Management
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