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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Production does not happen inside the factory alone. It depends on timely availability of materials, reliable suppliers, smooth transportation, and coordination across departments. Materials management and supply chain management (SCM) ensure that the right material reaches the right place at the right time at minimum total cost.
In exams, questions typically test:
SCM is the coordination of activities from suppliers to manufacturers to distributors/retailers to customers. It includes purchasing, production, inventory, transportation, warehousing, information sharing and customer service.
Materials management focuses on planning, sourcing, purchasing, storing and issuing materials required for production.
Simple relationship:
Objectives:
Purchasing is the function of procuring materials, components and services needed by the organization.
Objectives:
Functions:
Typical steps:
Common selection criteria:
Vendor rating (basic idea):
Make-or-buy decides whether to produce a part in-house or purchase it outside.
Factors:
MRP (Material Requirements Planning) is a planning system that calculates what materials are needed, how much, and when—based on the master production schedule.
Key inputs:
Outputs:
MRP is helpful for dependent-demand items (components).
Many firms use both:
Logistics includes transportation, warehousing, material handling, packaging, and distribution.
Warehousing basics:
Good logistics reduces lead time and damage, improving delivery reliability.
Lean supply focuses on eliminating waste (non-value-added activities) across the supply chain:
Lean supply needs:
Requisition → Vendor enquiry/quotes → Evaluation & negotiation → Purchase Order → Follow-up → Receiving & inspection → Payment & review
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Production does not happen inside the factory alone. It depends on timely availability of materials, reliable suppliers, smooth transportation, and coordination across departments. Materials management and supply chain management (SCM) ensure that the right material reaches the right place at the right time at minimum total cost.
In exams, questions typically test:
SCM is the coordination of activities from suppliers to manufacturers to distributors/retailers to customers. It includes purchasing, production, inventory, transportation, warehousing, information sharing and customer service.
Materials management focuses on planning, sourcing, purchasing, storing and issuing materials required for production.
Simple relationship:
Objectives:
Purchasing is the function of procuring materials, components and services needed by the organization.
Objectives:
Functions:
Typical steps:
Common selection criteria:
Vendor rating (basic idea):
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Objectives of materials management (any four):
Thus, materials management balances availability of materials with minimum total cost.
Hence, purchasing is a strategic function that impacts cost, quality and delivery performance.
Concept: MRP is a planning system that determines what materials are required, how much, and when, based on the master production schedule. It is best suited for dependent-demand items (components and subassemblies).
Table:
Conclusion: MRP improves material availability and reduces shortages by converting the production plan into time-phased material plans.