Production management: step-by-step guide to effective implementation


Production management


How’s the production management going in your company? That’s a question every entrepreneur must answer to really gauge if their business is efficiently delivering results.

There are various factors, such as bottlenecks, unnecessary costs, and rework, that can undermine your product’s competitiveness in the market, ultimately driving up your price compared to a more efficient competitor.

Production management identifies all production stages and determines the solutions that contribute to process improvement.

If you’re seeking to boost your productivity and expand your company’s market share, this article is tailored for you. Keep reading to gain a solid understanding of production management and learn how to optimize it to the fullest.

What is production management?

Production management is a crucial practice that aims to oversee all processes within the production chain, encompassing:

  • rigorous control and handling of raw materials;
  • efficient production of the final product;
  • transportation between production stages;
  • quality management.

A primary point of this management approach is to establish process standards that eliminate bottlenecks and enhance operational efficiency, leading to heightened productivity and reduced production costs.

In a fiercely competitive market, any avoidable expenses incurred throughout the production stages can result in budgetary losses or a decline in product margins during sales.

Moreover, challenges like rework and bottlenecks can directly impact the company’s deadlines, potentially leading to customer attrition due to delays in product and service delivery.

What is the purpose of production management?

The core objective of production management is to determine the optimal and most cost-efficient approach to carrying out tasks. This entails eliminating unnecessary expenses and establishing streamlined process logistics within the organization.

To accomplish this, investing in machinery and technology that simplify process management is essential, along with critical analysis from both managers and supervisors.

Effective production management yields heightened competitiveness in the market and potentially enhances the profit margin of specific products.

Ckeck out the principals of Production Management:

principals of production management Production management: step-by-step guide to effective implementation
Source: WinMan

Main components of production management

Successful production management encompasses multiple stages that function as an interconnected cycle, progressing synchronously in an interdependent way.

In this regard, we can identify key elements for achieving efficient production management, including:

  • strategic planning;
  • efficient organization;
  • ongoing monitoring;
  • effective leadership;
  • rigorous control;
  • flawless execution.

Strategic planning

Production planning is the first stage of the process, when the sales team will either make sales projections or, depending on the company, forward orders to the planners.

Using these orders or projections, they analyze the best production plan to optimize time and avoid any unnecessary interruptions.

Coordination with the finance team is crucial as certain orders may require priority due to payment deadlines and potential cash flow issues.

Efficient organization

Organization entails assessing production processes and, if needed, reconfiguring them to meet monthly demands, striving for increased productivity.

In simpler terms, it’s a means of structuring production to optimize the use of material, technological and human resources, sketching out a production roadmap.

Leadership and ongoing monitoring

Once planning and organization are set, it’s time to kick off the execution, which requires strong leadership and constant monitoring of the whole process.

The manager takes the reins in organizing the team on the production line, addressing any issues, tracking progress, and keeping the team motivated. In this context, the RACI Matrix becomes a vital tool to ensure everyone knows their roles and responsibilities for a particular task.

Therefore, it’s up to the production manager to quickly deal with any potential interruptions and issues that may arise during the production process.

Execution and rigorous control

Production execution is driven by the goals established during planning, which can span daily, weekly or even monthly periods.

Control involves assessing the individual performance of each employee and resource allocation during peak demand times.

It also entails optimizing waste, occupancy rates, and material handling to ensure goal achievement.

Curious about calculating your employee’s productivity? Read the following article and find out how to do it!

Step by step on how to manage production

Production management requires logical alignment, meticulous organization, and material control to achieve maximum productivity in the shortest timeframe.

Moreover, the production manager must be mindful of minimizing material and human capital waste to ensure timely delivery and top-notch quality.

Below, we have provided a complete step-by-step guide for your company to effectively implement production management.

Step 1: Stay ahead of demand

The production planning and control team must be at least one month ahead of the actual production schedule.

Therefore, maintaining a constant alignment between the sales team and production planning is vital to ensure timely production of marketable items.

During the planning process, it is crucial to synchronize the company’s financial and logistics sectors to manage cash flow and ensure on-time delivery.

This proactive approach helps avoid delays, excess inventory, and other unexpected issues that may affect the company’s overall performance.

Step 2: Align demand with production

Once the planning is complete, it’s important to evaluate whether the company has the necessary production capacity. This requires considering several factors, including:

  • raw materials;
  • workforce;
  • capital;
  • machinery;
  • physical space.

These components are vital in preventing production setbacks. Therefore, it is important to ask questions like: Do we have enough raw materials? If not, will the supplier’s delivery time cause disruptions in production?

Moreover, it is essential to assess workforce adequacy, available machinery, and storage space for the items in production until they are ready to be delivered to customers.

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Step 3: Create a productive strategy

Once it is confirmed that there will be no supply shortages during production, it is time to devise the most effective production strategy.

This entails analyzing production logistics, each employee’s role, material transportation throughout the production process and the company’s daily capacity.

This is the moment to establish goals. Usually, the manager gathers with the production team to coordinate deliveries and assign tasks for the upcoming month.

Step 4: Address the urgencies before execution

Once everything is aligned, it is important to guarantee no plan changes during the process. Thus, assessing urgencies before execution becomes crucial.

Ensure that the top-selling products have enough stock to handle potential demand surges, avoiding the need for complete production replanning throughout the month.

Evaluate if the production deliveries will be enough to meet customer orders on time and prevent product shortages for them.

Step 5: Execute and control the production

It is time for production to shift into high gear. The production department operates continuously, simultaneously handling previous stages while fulfilling orders from previous months.

Hence, planning goes into action on the first day of the month, ensuring smooth production, meeting delivery deadlines, and adapting to new demands that have emerged.

During this phase, the production manager closely monitors machine performance, employee productivity, and raw material requests for the warehouse, all to ensure goal achievement.

They bear the responsibility of maintaining rigorous control and promptly addressing any issues that may arise, such as a machine breakdown during the day, for example.

Step 6: Track the outcomes and motivate the team

Finally, monitoring the results is absolutely indispensable. It is essential to emphasize the significance of machinery maintenance to avoid any unwelcome surprises.

A skilled manager capitalizes on production downtime, like during the night shift or scheduled breaks in 24-hour operations, for proactive machinery maintenance.

This prevents any unforeseen interruptions during production that could cause delays in deliveries. With thorough monitoring, results can be closely observed.

During this stage, bottlenecks are identified and resolved, while the team remains motivated to achieve daily goal fulfillment.

Benefits of effective production management

Effective production management brings numerous benefits to your business, such as enhanced agility, productivity, and cost reduction, which lead to higher profits. Additionally, it includes:

  • streamlined activities execution;
  • deliveries ahead of schedule;
  • improved financial management;
  • enhanced order control;
  • maximum productivity.

A key outcome of good management is delivering products to customers with top-notch quality in the shortest time possible. This results in customer satisfaction-driven management. 

Satisfied buyers not only become returning customers but also refer the company to other retailers.

Avoidable Mistakes in Production Management

To ensure that production management truly achieves its goals, certain mistakes must be avoided as they can negatively impact the overall performance of the organization. Some of the key errors include:

  • inaccurate demand forecasting;
  • conflicting information;
  • inadequate team training;
  • neglecting preventive machinery maintenance;
  • insufficient investment in technology.

When demand calculation errors occur, the company commits to tasks it can’t fulfill, resulting in delayed deliveries to customers and damaging the brand’s reputation.

Additionally, conflicting information can result in more significant issues, such as prioritizing the production of one batch over another that requires immediate attention. Therefore, clear and precise communication is essential for everyone.

Another common mistake is inadequate team training. Smaller companies facing employee turnover often make rushed hires for production line positions without providing proper training.This leads to production bottlenecks, as not all employees can maintain the same pace as the rest of the team.

It is also essential to allocate time for maintenance during production planning. If production is not 24/7, setting aside extra time for maintenance becomes more manageable.

Lastly, the primary and most significant error is the failure to continuously invest in technology.

Why invest in production technology?

Investing in technology is crucial to ensure production gains greater efficiency and control. And we are not just talking about state-of-the-art machinery, although that is also necessary in a competitive landscape. 

We mean having a management system that streamlines the entire process and aids in preventing potential errors. With a robust system in place, the production manager can:

  • identify potential bottlenecks;
  • anticipate machine defects;
  • improve production planning;
  • establish clear and smooth communication.

Moreover, machine performance is constantly measured. By proactively identifying potential defects, it becomes easier to address and rectify them promptly.

The most effective way to anticipate and tackle such problems is through a project management software that provides a comprehensive overview and seamless management of your entire portfolio; and  also enables a constant monitoring of project timelines.

By integrating performance indicators within this business management system, decision-making becomes centralized, streamlining the process of continuous performance improvement.

One standout software in the market is Stratws One, which empowers you with more time for planning, managing, and engaging your team towards a results-driven culture.

In essence, this software enhances planning and fosters clearer communication, ensuring greater productivity and profitability for your business. Request a free tryout today:

demon Production management: step-by-step guide to effective implementation