Production Management

1. Production Management How to guide production management for SMEs?

2. Definition of Production • Process of transforming inputs into required outputs in form of services or products • So is not necessarily only manufacturing • Can be construction or transport, health or office services • Transformation requires decision making • Quality • Quantity • Cost • Delivery

3. Three P’s of production • Product(s) • What is the business making? • Process (or method of operation) • Organization of work • People • Skills level required • Training • Work safety • Motivation

4. Product - parts • How many parts make up the product? • Can some parts be eliminated with better design? • Remove unnecessary features • Standardization/rationalization • what parts can be used in other products? • Use of jigs, tools & fixtures • Replacement of parts • Use cheaper parts • Same performance

5. Product - machinery • Matching product with machinery • Dimensions, precision, productivity & cost • Utilization of materials • Main materials used in product • Packaging materials • Fuel & lubricants • Paint • Waste & improving yield • Re-working waste • Utilization of by-products • Selling waste & scrap

6. Product – quality assurance • Product quality • Appropriateness of tolerance levels set • Frequency of inspection • Identify new points • Abolish points which do not make sense • Sampling methods & sampling adequacy • Quality consciousness • Training in Quality Assurance

7. Product - Safety • Does your product meet international safety standards? • Can you get it certified? • Does it meet food safety & hygiene standards? • Is it electrically & mechanically compliant? • If machinery, are moving parts guarded? • Is it free from toxic chemicals? • Does it comply with environment standards? • Do your production methods comply with international standards? • Are safety interests of workforce considered?

8. Product - planning • Long range planning • Establish objectives – determinewhat is to be accomplished. • Programme – determine how objectives should be accomplished • Schedule – determine when each activity in plan should be done • Budget – determine how much manpower, money & resources needed & how supplied

9. Process – work flow • Work flow & plant layout • Bulky items versus smaller or lighter items • Working space – cramped or wasted space • Backtracking or cross flows • Congestion points or bottlenecks • Housekeeping – tidy workspace • Clearly marked aisle & lanes with flow • Stores & over head utilization of space • Cost savings • in space, labour & equipment

10. Process - handling • Materials Handling • Degree of manual handling & re-handling • Temporary or disorderly storage • Damage or breakage through handling • Commercial Considerations • item size & speed of handling • versatility of equipment use • use of gravity

11. Process - maintenance • Maintenance • Basic maintenance frequency • Planned maintenance & inspection schedules • Repairs & cost estimate schedules • Machine down time • Emergency Maintenance • frequency – increasing or decreasing? • Machinery component re-design • Off-line maintenance • Company closure • Seasonality of product demand

12. Process – work study • Job & work methods • Study of performance of methods used • Use of computerization & charts • operation • flow charts • man-machinery • activity • Critical path analysis • Suggestion box • Use of operators ideas

13. Process - performance • Performance Standards • Work sampling • Stop-watch time & motion study (Methods-time measurement (MTM) • Predetermined time standards (PTS) • Production planning • Production line • Batch production • Jobbing

14. Process - inventory • Inventory Control • 20/80 principle • Few items but higher value • Ordering strategies • Minimum stock levels • Two - bin approach versus computerized ordering • Opportunity cost of lost sales • Cost of holding stock

15. People – environment • Physical working conditions • Consider working environment • Temperature & humidity • Noise & lighting levels • Dust & dirt • Chemical usage • Machine guards • Electrical & fire safety • Health care • Drinking water & sanitation • First Aid points • Health education (HIV/AIDS awareness) For further information use Bureau of Safe Work (BSW) Checklists – BSPS Component 2.1

16. People - safety • Know the Occupational Health & Safety (OHS) regulations • These are mandatory • Try to achieve more than mandatory standards • Workers safety makes sense • Protects workforce • Maintains healthy & safe working environment • Improves workers morale & motivation • Increases production, reduces down time For further information read: MoLISA: Policy Development & Implementation of Labour Protection in SMEs. Bureau of Safe Work (BSW) Checklists - BSPS Component 2.1

17. People – Safety (cont) • Owners & managers must comply with national & international standards • Many just assume (hope) they comply • Must have OSH Policy & de facto action plan • Developed jointly by management & workforce • protects health & safety of workers & staff • Complies with OSH laws & regulations • Follows codes of conduct For further information read: MoLISA: Policy Development & Implementation of Labour Protection in SMEs. Bureau of Safe Work (BSW) Checklists - BSPS Component 2.1

18. People - motivation • Productivity factors which contribute to work satisfaction • Process design • Method of work • Arrangement of work space • Organizationof work groups • Job enlargement & job enrichment • Making jobs more enjoyable • Less tedious For further information use Bureau of Safe Work (BSW) Checklists – BSPS Component 2.1

19. People - involvement • More people involved the better the productivity • Joint OHS action plan • Joint diagnosis of problems & solutions • Extensive consultation with workforce

20. Production “Audit” • All businesses need to be efficient & effective • Maximum utilization & efficiency of labour, machinery & resources • Maximum quality standards with zero rejects & customer complaints • Minimal waste of materials & components • These need to be measurable • To be managed

21. Measurement of Production Management • A well managed production unit requires standards for • Labour & machinery utilization & productivity • material quantities & rejects • workshop space utilization

22. Production ratios • Utilization • Efficiency labour or machine time __________________ total production time available space utilized __________________ total space available units produced __________________ time available sales per salesperson __________________ standard sales

23. Production ratios • Quality • Wastage units rejected __________________ total units produced number of returns/ complaints __________________ total sales material used __________________ materials bought goods sold __________________ goods bought

24. Potential Production Problems poor flexibility poor planning machine breakdown poor supervision poor layout inadequate reward old technology lack of training poor product mix LOW MORALE poor materials poor stock control poor OHS

25. Problem identification • Is the problem being addressed the real problem? • Is problem cause or affect of poor production? • There is likely more than one cause • Beware not to solve a problem that does not exist • but solution is your speciality!

26. Discussion Points • Which of the 3 Ps of production management do you make a priority? • How much time and budget do you allocate to OSH? • How do you recruit, motivate and retain your skilled workforce? • How important is skills training? • What role should government play in labour policies related to skills? • What role should trade unions play? • What is the most effective measure of production performance?