Production Function and Sustainable Business Practices
Production Function
The production function is the transformative function of manufactured goods, services, or products. The generic objective of a company is the organization, management, and control of the processing of inputs into outputs, in order to make arrangements with maximum economic efficiency and thus contribute to the overall objective of the company.
The production function is in competition with the department of production (logistics, manufacturing, operations). In the production process, it is necessary to have productive factors (capital, labor, and natural resources) with which the production management will plan the production activities, taking into account some factors:
- Productive Capacity: Maximum production the company can achieve in terms of resource constraints.
- Demand for the Product: The amount needed by the market.
- Production System Design: The structure of the production process.
- Economic Environment: Influence of the external situation on the company.
Production planning manages the production system with effectiveness and efficiency criteria in order to manufacture a product in the quantities needed and at a specific time.
Internal Logistics
It is a management system of production that aims at meeting the needs of customers by interacting with suppliers and customers so that the different areas involved in this cycle help make the process of production and reduce costs as a tool for improving the competitiveness of the enterprise through:
- Strategic Plan: Long-term forecast on business objectives, taking into account the productive capacity and investment plans.
- Sales Forecast: Potential sales level to satisfy.
- Master Production Plan: Structure and material requirements of manpower in relation to the costs of the company.
- Production Program: Determination of production orders in the short term.
This could complement system control in two areas: operational control of production and economic control of production.
Material Requirements Planning (MRP) System
It helps to determine what to produce and when, bills of materials (material components that make up the product), availability of inventory (stock materials that are in storage), open purchase orders (which have been requested from suppliers and have not yet come to the store), and lead time (time required to achieve each material).
Production Planning
- Define the project and all the significant acts that form it.
- Determine relations between the acts and the order of precedence.
- Assign the duration of each act.
PERT-CPM Method
Diagrammed by the technique of conducting a graphic production project in its different situations, it allows knowing at any particular moment whether deadlines are being met or if there are delays.
Gantt Chart
It is the graphical representation in which all project activities are simultaneously controlled, and their degree of achievement is assessed.
Quality
The set of features and technical specifications that define a product, taking into account the capacity it has to meet user needs and determining the level of compliance with the use for which it is intended.
Process Reengineering
It is adapting the production processes of the company with the objective of ensuring optimal quality. Thus, quality management originates a variable that contributes to improving the competitiveness of the company.
Quality Management
It allows the company to control the quality of its products and achieve the level of quality required by a process with these steps:
- Identify the elements that characterize the quality of the product.
- Assign an objective system for measuring the quality.
- Determine what the quality of the products is.
- Implement quality control systems.
- Control the causes of poor quality.
This can be done by management through inspection techniques, process control, integrated quality management, and total quality. All of this is about prevention costs, appraisal, and failures.
Quality Certification
It allows an officially recognized governing body to determine the conditions that a quality system must meet for such an undertaking to be recognized.
Environmental Protection
It is necessary that the company systematically integrate responsible environmental management into its strategy and organization.
Sustainable Production
It is one that uses renewable natural resources and generates no pollution or alteration of the environment. Sustainable production can involve a source of competitive advantage for the company.
Environmental Management
It is implemented if the company develops production processes and products that are environmentally friendly, and contributes to the maintenance of natural resources, in order not to damage nature.
It includes regulations, society, business ethics, and the economy. It also involves the behavior of an ecological impact reduction industry and environmental protection.
Critical Path
It is the longest path between the initial situation and the final situation, and it coincides with the minimum length of the entire project implementation.