Production management means planning, organising, directing and controlling of production activities. Production management deals with converting raw materials into finished goods or products. It brings together the 6M's i.e. men, money, machines, materials, methods and markets to satisfy the wants of the people.
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In production management, productivity tells how efficiently inputs are converted into output. A firm may have good demand, but if productivity is low, costs rise, delivery becomes slow, and profits reduce. Therefore, organizations continuously work on productivity improvement using methods like work study, standardization, lean, 5S, Kaizen, and quality improvement.
Operations strategy connects the production system to the overall business strategy. It decides what the operations function will compete on—cost, quality, delivery, flexibility, and service—and how resources will be arranged to support those priorities.
Productivity is the measure of output produced per unit of input. Why it matters:
In business, productivity improvement is usually achieved by:
Productivity based on one input at a time:
Output compared to total inputs combined (in value terms):
Output compared to a group of inputs (e.g., labour + capital). It is more realistic than partial measures in many cases.
If a factory produces 500 units using 250 labour-hours:
If 1,000 kg of material produces 800 good units:
Important: Always measure productivity using good output, not total output, because defects are waste.
Internal factors:
External factors:
Common methods (exam-friendly list):
Lean focuses on eliminating waste (Japanese: muda)—activities that do not add value to the customer.
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In production management, productivity tells how efficiently inputs are converted into output. A firm may have good demand, but if productivity is low, costs rise, delivery becomes slow, and profits reduce. Therefore, organizations continuously work on productivity improvement using methods like work study, standardization, lean, 5S, Kaizen, and quality improvement.
Operations strategy connects the production system to the overall business strategy. It decides what the operations function will compete on—cost, quality, delivery, flexibility, and service—and how resources will be arranged to support those priorities.
Productivity is the measure of output produced per unit of input. Why it matters:
In business, productivity improvement is usually achieved by:
Productivity based on one input at a time:
Output compared to total inputs combined (in value terms):
Output compared to a group of inputs (e.g., labour + capital). It is more realistic than partial measures in many cases.
If a factory produces 500 units using 250 labour-hours:
If 1,000 kg of material produces 800 good units:
Important: Always measure productivity using good output, not total output, because defects are waste.
Internal factors:
External factors:
Common methods (exam-friendly list):
Lean focuses on eliminating waste (Japanese: muda)—activities that do not add value to the customer.
Common types of waste (easy to remember):
Lean idea:
Kaizen means continuous improvement through small, regular improvements by everyone.
Benefits:
5S is a workplace organization method:
5S improves productivity by reducing searching time, improving safety, and preventing defects.
OEE measures how effectively a machine is used compared to its full potential.
Basic formula: Interpretation:
OEE is useful because it points to where productivity is being lost.
Operations strategy is a long-term plan for designing and managing operations to support business goals.
Major decision areas:
Competitive priorities are the dimensions on which operations competes:
Trade-off idea:
Example:
Measure productivity → Find losses (waste, defects, downtime) → Select methods (work study / lean / 5S / maintenance) → Implement → Standardize → Review and repeat (Kaizen)
From this topic
Types of productivity measures:
Thus, total and multifactor measures give a broader view than partial measures.
Factors affecting productivity (any four):
Hence, productivity depends on people, process, equipment and quality.
Productivity improvement means producing more output with the same resources (or the same output with fewer resources) while maintaining quality.
Techniques (any six):
Mini flow:
Measure → Identify losses (waste/defects/downtime) → Improve (lean/work study/maintenance) → Standardize → Review
Conclusion: Systematic improvement reduces cost, improves delivery and raises competitiveness.