Optimizing Production Processes and Subsystem Objectives

Main Activities of the Production Process

• Purchase of materials: Involves the selection of suppliers and the establishment of purchase agreements.
• Stock inventory of materials: Required to determine the volume of materials needed, establish inventory control methods, decide on store location, size, and organization, and maintain a safety stock to ensure production continuity.
• Manufacturing: Requires planning production operations, determining the machinery to be used, and organizing the distribution of equipment and personnel within the factory.
• Finished goods inventory: Required to make demand forecasts, establish procedures for receiving and delivering orders, and maintain safety stock.

Production Subsystem Objectives

• Cost reduction: Maximizing efficiency by producing as much as possible with available resources.
• Quality improvement: Ensuring the product meets all necessary requirements demanded by consumers.
• Increased flexibility: The company's ability to produce new products, adapt or modify existing products to customer requirements, and adjust production volume.
• Delivery fulfillment: Refers to the time required to deliver the product to the customer.
• Customer service: Products offered for sale are generally associated with services that add value, such as reducing client risk or providing product information.

The direction of operations should ensure that the product is high-quality, cost-effective, and available to consumers when needed.

Production Processes

A production process is a set of people, materials, equipment, and procedures used for the production of goods and services.

Production processes based on labor input

This consists of comparing the amount of labor employed in the process with the amount of capital employed:

• Manual process: Performed entirely by people.
• Mechanical processes: Work is done by people using tools or machines.
• Automatic processes: Work is done almost entirely by machines, where people only control or perform maintenance functions.