In a Nutshell

The focus is on optimizing production processes
Production management can be divided into: strategic - tactical - operational
There are a variety of methods that can form the basis for production management
The main challenges are complex processes, digitalization and scarce resources
MES solutions can be valuable enrichments for processes

What is Production Management?

Classic production management typically comprises the areas of planning, organization, management and control. It is particularly relevant for companies that produce goods. Good production management aims to design these manufacturing processes in such a way that minimum input (resources) results in maximum output (goods) with consistently high quality.

The focus of production management is therefore the continuous optimization of production processes. In order to achieve the greatest possible efficiency and maximum productivity, all resources and raw materials must be available in optimum quantities and clearly defined quality throughout the entire production process.

This means that such a system in companies inevitably has points of contact with a large number of other planning systems and work areas. These include the areas of procurement and logistics (supply chain management), personnel management, process management and quality management.

Types of Production Management

When dealing with the topic of production management, it is important to differentiate between the various types. The main difference between these levels is the respective planning horizon.

Strategic Production Management

What role should production play in the company in the future? Which markets should be developed with which products in the future? What directional decisions need to be made in terms of technologies or locations? Strategic production management deals with fundamental and long-term questions about production, competitiveness and the future viability of a company.

Planning horizon: long-term / 5-10 years

Tactical Production Management

The long-term ideas from strategic planning are transferred and concretized into concepts that can be implemented in the medium term as part of tactical production management. Binding figures on production volumes are formulated here, technologies / systems to be purchased are defined for implementation and targeted optimization key figures in production are defined for the coming years.

Planning horizon: medium-term / 1-5 years

Operational Production Management

Operational production management covers all production processes that are part of the extended day-to-day business. Everything that has been defined at the tactical level must now be turned into reality by setting the right course in the areas of intelligent demand determination, machine allocation and production planning.

Planning horizon: short-term / 0-1 year

Production Management Methods

In the field of production management, companies can also draw on a variety of methods to achieve the desired efficiency gains and optimizations in practice. These are the most important examples.

Lean Production

Lean methodology, or “lean production”, is about reducing waste (of time, materials and resources) to a minimum. The main aim is to achieve fast throughput times. With the customer in mind, the system is continuously adapted and improved in stages (value stream mapping).

Six Sigma

The Six Sigma approach is very strongly data based. Statistical methods and data analyses are used to uncover possible errors, inefficiencies and other fluctuations in production processes. This improves the quality of processes and products (DMAIC - Define, Measure, Analyze, Improve, Control).

Total Quality Management (TQM)

TQM involves all employees of a company in order to work together on the continuous improvement of production processes. This means that every employee plays their part in improving product quality. This production management method aims to achieve satisfied employees and customers.

Theory of Constraints (TOC)

The focus of this method is on identifying, prioritizing and thus resolving the most important bottlenecks within the production process. Once one bottleneck has been eliminated, the next one is identified. The efficiency of the entire process is continuously improved through targeted optimization at these critical points.

Advantages of Production Management

If companies consistently implement the possibilities of production management in their operations, experience has shown that this has a number of positive effects in the short and long term:

Increased Efficiency
The planned use of available resources makes all production processes more efficient. This increases production output.
Reduction of Costs
The optimized use of resources (raw materials / manpower) and better utilization of machines reduces the production costs per unit.
Minimization of Risks
By taking a holistic view of production, bottlenecks, surpluses or other risks can be identified at an early stage and taken into account in the process.
Increasing Product Quality
Clear production processes and fixed production standards help to maintain or even improve the quality of our own products.
Optimizing the use of resources
Good production management helps to obtain a clear overview of the resources available in the company. In the next step, this enables the optimized distribution of resources to the most important areas.

A management system that is carefully integrated into the company's own processes can also offer benefits that go far beyond direct production. For example, the reduction in unit costs represents a lasting competitive advantage. At the same time, the particular efficiency in personnel deployment makes a company potentially more interesting for qualified employees. At best, these advantages can be extended over many years.

Challenges in Production Management

It always makes sense for manufacturing companies to look into the possibilities of production management. This is especially true as many industries are facing considerable challenges with regard to their production.

Complexity

In modern production operations, many processes are extremely complex and granular across the entire supply chain. This complexity makes proper optimization difficult and requires a deep understanding of the processes in order to ultimately increase the efficiency and profitability of the processes.

Digitalization

In the course of digitalization, production processes have been undergoing radical change for a number of years. Under these circumstances, business decisions - especially at a strategic level - must provide clear guidelines as well as sufficient flexibility to adapt to new developments and technologies.

Scarcity of Resources

Many industries, especially in the industrial sector, are already struggling with a blatant shortage of skilled workers. But it is not only from a personnel perspective that resources are scarce. The lack of security of supply of critical raw materials, for example, is just as problematic in several branches of industry. All of these aspects make it difficult for companies to plan their economic activities.

Expenses / Profitability

Many companies are confronted with rising costs - these range from employees, rent, energy and materials to national / international regulations. Examples of this include strict environmental regulations or the obligation to carry out comprehensive checks along the supply chain. In some cases, this involves considerable expense - a production-specific management solution is often associated with the hope of offsetting this to some extent.

MES and Production Management - Synergies in Production

The use of Manufacturing Execution Systems (MES) is of central importance for professional production management. After all, an MES helps to keep an eye on a wide range of machine data, statuses and more in real time.

This allows companies to view their production processes, quickly identify problems and inefficiencies and take corrective action. The following MES modules are particularly important for production management:

Machine Data Acquisition

An MES helps to record all data from machines and production lines centrally and automatically. Machine data acquisition software provides managers with the information they need to quickly intervene in processes and make adjustments if necessary. This ensures efficient plant operation at all times.

Maintenance

In order to avoid long downtimes or expensive machine failures, it is important to precisely plan the intervals for servicing and maintaining individual systems. Maintenance software as part of an MES solution enables such “predictive maintenance”, which schedules machines for repairs when their utilization is minimal.

Quality Management

Using an MES makes it much easier to trace products and batches. This makes it possible to identify and resolve quality problems in the process at an early stage. This seamless quality management ensures the quality of current and future batches.

This is a small selection of the modules that we make available to our customers. Use our GFOS.Smart Manufacturing MES software and benefit from a fully modular system that equips your production for the future.

Production Management in Transition - Trends in the Industry

Wie in anderen Branchen lassen sich auch im Bereich des Produktionsmanagement einige Trends beobachten.

Integration of AI Solutions

When it comes to improving the efficiency of processes, artificial intelligence (AI) is inevitably a major topic. The ability of AI systems to recognize patterns, make predictions and analyze processes holistically means that potentially unprecedented efficiency gains can be achieved in the context of production management.

It will be important for artificial intelligence in production to work side by side with the specialists on site. The professional use of AI is expected to provide companies with significant competitive advantages and relieve employees of avoidable routine tasks.

IoT in Production

The Internet of Things (IoT) connects machines, devices and sensors with each other, efficiently creating an intelligent production environment. By collecting and transmitting data from various production areas in real time, companies can monitor and control their processes better.

IoT solutions offer the opportunity to continuously monitor machine statuses for optimal operating times. At the same time, IoT solutions facilitate the traceability of goods and resources along the entire value chain.

Cloud Computing

Access to powerful cloud environments offers companies flexible and scalable solutions for storing and processing data. The cloud is particularly interesting for in-house production management due to its location-independent access - ideally, all process data from all production facilities worldwide is available in real time.

Companies also benefit from the enormous cost efficiency of modern cloud solutions, which are purchased from selected providers as required and do not have to be maintained in-house. If companies handle their production management via the cloud, they can secure clear competitive advantages over the competition.

Sustainability

The trend towards sustainability affects society as a whole - and industry is no exception. Sustainability here means both lower energy and resource consumption as well as a stronger focus on recycling and the recovery of resources.

Many companies that already practice active production management can easily adapt this trend to a large extent. After all, the optimized use of resources is already part of their own strategy. Companies that take the next step and adopt a “cradle to cradle” approach to their production will therefore benefit from both improved competitiveness and a potential boost to their image.