What is Production Management?
Production management and Operations are two interrelated concepts. Operations Management deals with the decision-making related to production processes to ensure that the resulting goods and services produced are by the quantitative specifications and demand schedule with minimum cost.
Production is a process by which goods or services are created.
Hence, the design and control of the production system are the two main functions of production and operations management. Production management is the application of management principles to the production process. The firm you intend to start or are operating will generate profits by producing goods and services. Hence, looking at the production/operations process and making plans for the future.
Types of Production
- Intermittent production
- Unit Production
- Batch or quantity production
- Continuous or mass production
- Flexible manufacturing system
Functions of Production Management
- Production planning
- Production control
- Factory building
- Provision of plant services
- Plant layout
- Physical Environment
- Inventory control
- Quality control
- Product department
The Production management in the Business Plan section comprises the below;
- Production SWOT analysis
- Overview of Productive Assets
- Managerial expertise
- Production/Operations Performance
- Regulatory consideration
- Production/Operation strategy
Production SWOT Analysis
Summarize the SWOT analysis for production/operations.
We advise you to do this with the employees who are likely the most closely associated with daily production. Talk about the Strengths, Weaknesses, Opportunities, and Threats surrounding your production.
Overview of Productive Assets
Talk about the productive assets needed to make your product or service. They can be any or all of the below;
- Land
- Buildings
- Other Facilities (especially if on-farm processing is included)
- Equipment and Machinery
- Materials and Supplies
Talk about what the firm currently owns, how quality those assets are, and how others will be obtained if needed. Only discuss the resources needed for the production, and the detailed discussion of the financing of the assets should instead appear in the Financial Management section.
Managerial Expertise
Talk about that particular expertise held by management in production/operations.
For example, is the farm manager or technician trained in pig production?
How many years of experience in this type of position does the person have?
Production/Operations Performance
What are your current production practices?
How much do you produce?
When do you produce it?
We advise that you use a visual approach to tell your story. A timeline can assist in describing when products are made, or services are sold. The complexity of the visual representation will depend on how complex the business is.
Regulatory Considerations
Production is affected by Government regulations in many industries, especially in agriculture.
Talk about how you will or already comply with relevant regulations when producing agricultural products.
It may be but not be limited to
- Manure management
- Soil conservation
- Worker Safety
- Zoning
- Inspections of the product and the production facilities
We advise that you talk to consultants, Cooperative Extension, agricultural cooperatives, and government agencies for more information on relevant policies and regulations.
Production Management/Operations Strategy
Talk about your production/operations-related plans. Talk about your specific production goals, outline some of the potential changes or production practices, and describe how you plan to locate and purchase your inputs for production.
Answer the below in your production management section also;
- How long will your current productive assets be of use?
- When do your leases on land and equipment expire?
- How soon can you expect to replace the necessary machinery and equipment?
- Where can you find other inputs, such as feed, in the future?
- Will you consider hiring a custom operator to carry out a portion of the production tasks?
- Are there new production practices you should consider adopting?
- How many units of product do you want to sell over your planning period?
- If appropriate, provide specific targets and a timeline for your production activities.
- Are there other environmental plans that should develop?
- When expanding, how will the new construction or other changes affect output?
- Will you be able to operate promptly without affecting the quality of your products or services?
More Resources
- Pig Farming Business Plan: A Complete Guide 2022
- How to write the Introduction of a business plan with these 6 powerful steps
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- Agric. Business Promotion: 4 Free Package For You
