Production and Manufacturing Management is the planning, execution, monitoring, and accounting of transforming materials, machine capacity, manpower, energy, and time into a product using a defined method, at a defined quality, and at a defined cost.
Production is the most resource-intensive and data-generating area of a business. It's also the least visible: sales figures are on everyone's mind, but why a particular machine stopped working, how much waste occurred in each batch, or the actual cost of a particular product is not clearly known in most organizations.
The questions this discipline needs to answer are:
What will we produce? Demand, inventory, and strategic priorities will be translated into a production plan.
How will we produce it? Defining the product tree, route, work center, and process parameters.
When and where will we produce? Scheduling with capacity, shift, line and plant selection.
What actually happened? Collection of actual consumption, duration, waste, and downtime data from the field.
How much did it cost? A comparison of the planned cost with the actual cost, and an explanation of any discrepancies.
These five questions form a cycle . The answer to the last question is the input for the next round of the first question. When the cycle doesn't close, production management is reduced to a planning activity; the difference between the plan and reality is never learned, and the same mistakes are repeated.
One-sentence definition
Production management is a system that combines engineering data defining how a product will be made and planning determining when it will be made, with actual data from the field, to translate this into cost analysis and decision-making .
Three layers
Engineering data: Product tree, route, business center, recipe. What and how. Planning: Demand, master plan, materials and capacity plan, schedule. When and how much. Execution: Work order, field data collection, quality and cost recording. What actually happened.
When the three layers aren't working on the same data, production management becomes a guessing activity.
ERP and MES boundary
Enterprise resource planning (ERP) manages what to produce and how much it costs, while the production execution system (PECS) manages exactly what happens in the field. In highly functional systems, these two layers are not separate software programs, but two views of the same database .
The structure of this document
The document is structured around five widely accepted main blocks of the production field. The table below shows the document's definition of these blocks.
Main block
Topics covered
Document sections
1. Production Approach
Production visibility, panel management and scorecards, product cost visibility, manufacturing intelligence, performance management, production tracking, key performance indicators, and production analytics.
Chapters 5, 6, 7
2. Production Resource Management
Facility and management organization, work schedule, production network, production engineering (product tree, work centers, routes, production lines, integrated product and process engineering), and production document management.
Chapters 8–13
3. Production Planning
Production requirements planning, master production planning, material requirements planning, capacity planning, shift planning, production and work order planning, subcontracting planning.
Chapters 14–20
4. Production Processes
Production execution models (made-to-order, repetitive, flow, workshop, lean, process, batch) and outsourced production (subcontracting, network inventory, work order process)