Manufacturing management, as the term is commonly understood is like any other function of business like the management of selling, finance, engineering or insurance company investments. But the principles of production must be a serious concern of top management in any business that produces or distributes physical goods. For in every such business the ability to attain performance goals depends on the ability of production to supply the goods in the required volume, at the required price, at the required quality, at the required time or with the required time or with the required flexibility. In any manufacturing enterprise ability to produce physically has to be taken into account when setting business objectives. Managementâ€™s job is always to push back the limitations set by the hard reality of physical production facts. It must so manage its business as to convert these physical limitations into opportunities.
There is, of course, nothing new in this. But traditionally management reacts to the physical limitations of production by putting pressure on its manufacturing function: there are few areas in which â€œmanagement by driverâ€ is as common. And production people themselves see the answer in a number of techniques and tools, ranging from machine design to industrial engineering.
Neither, is the key. To push back the physical limitations or to convert them into opportunities requires first that management understand what system of production its operations require and what the principles of that system are and second that it apply these principles consistently and thoroughly. Production is not the application of tools to materials. It is the application of logic to work. The more clearly, the more consistently, the more rationally the right logic is applied, the less of a limitation and the more of an opportunity production becomes.
Each system of production makes its own demands on the management of the business in all areas and on all levels. Each requires different competence, skill and performance. One set of demands is not necessarily â€œhigherâ€ than another, any more than non-Euclidian geometry is higher than Euclidian geometry. But each is different. And unless management understands the demands of its system of production, it will not manage well.
This is particularly important today when many businesses are moving from one system of production into another. If this move is considered a mere matter of machines, techniques and gadgets, the business will inevitably reap only the difficulties of the new system. To reap its benefits management must realize that the new system involves new principles, and must understand what these are.
There are three basic systems of industrial production known to us so far: unique-product production, mass production and process production. We may perhaps count four systems; for mass production â€œold style,â€ that is, the production of uniform products, is different from production â€œnew style,â€ which manufactures uniform parts but assembles them into diversified products.
Each of these systems has its own basic principles; and each makes specific demands on management.
There are two general rules for advancing production performance and pushing back limitations: (1) Limitations of production are pushed back further and faster, the more consistently and thoroughly the principles pertaining to the system in use are applied. (2) The systems themselves represent a distinct order of advance with unique product production the least advanced, process production the most advanced. They represent different stages of control over physical limitations. This does not mean that opportunities for advance lie everywhere in moving from the unique product system to the process-production system. Each system has its specific applications, requirements and limitations. But it does mean that we advance to the extent to which we can organize parts of production on the principles of a more advanced system and learn, at the same time, how to harmonize the two systems within the business.
There are also two general rules concerning the demands on management competence made by each system
1. The systems differ not just in the difficulty of their demands, but in the variety of competence and the order of performance. Management, in moving from one system to another, has to learn how to do new things rather than learn to do the old things better.
2. The more we succeed in applying consistently the principles of each system, the easier it becomes for management to satisfy its demands.
Each management has to meet the demands of the system it ought to have according to the nature of its product and production, rater than those of the system it actually has. Being unable or unwilling to apply what would be the most appropriate system only results in lack of performance; it does not result in lower demands on management. Indeed, it inevitably increases the difficulties of managing the business.