UNIT III

Objectives of Production Management

Objectives are the foundation of production management without which the production cannot get
completed. Production management deals with decision-making related to production processes so
that the resulting goods or service is produced according to specification, in the amount and by the
schedule demanded, and at minimum cost.

Definition

“The set of interrelated management activities, which are involved in manufacturing certain products,
is called Production Management.

“Production management deals with decision-making related to production processes so that the
resulting goods or service is produced according to specification, in the amount and by the schedule
demanded and at minimum cost.”

1. Right Quality

The quality of the product is a very important parameter for every organization without quality the
product cannot establish itself in the competitive market. Today’s market is a buyer’s market so one
has to be very conscious about the quality aspect.

2. Right Quantity

The manufacturing organization should always be in the position to produce the product in the right
number to the required quantity to satisfy the customer’s needs

3) Right Time

The time factor is very important in business timeliness of delivery is an important parameter as it
judges the effectiveness of the production department.

4) Right Manufacturing Cost

Manufacturing cost is established before the product is actually manufactured because it can be a
major distinguishing feature of the product.

A production is an intentional act of producing something in an organized manner. It is the fabrication

of a physical object through the use of men, material, and some function that has some utility e.g.
repair of an automobile, legal advice to a client, banks, hotels, transport companies, etc. The main
inputs are information, management, material, land, labor, and capital.
Functions of Production Management

Functions of production management are depicted, listed & explained below.

The components or functions of production management are as follows:

Selection of Product and Design,

Selection of Production Process,

Selecting Right Production Capacity,

Production Planning,

Production Control,

Quality and Cost Control,

Inventory Control, and

Maintenance and Replacement of Machines

The above functions of production management are briefly discussed below.

1. Selection of Product and Design

Production management first selects the right product for production. Then it selects the right design
for the product. Care must be taken while selecting the product and design because the survival and
success of the company depend on it. The product must be selected only after detailed evaluation of
all the other alternative products. After selecting the right product, the right design must be selected.
The design must be according to the customers' requirements. It must give the customers maximum
value at the lowest cost. So, production management must use techniques such as value engineering
and value analysis.

2. Selection of Production Process

Production management must select the right production process. They must decide about the type
of technology, machines, material handling system, etc.

3. Selecting Right Production Capacity

Production management must select the right production capacity to match the demand for the
product. This is because more or less capacity will create problems. The production manager must plan
the capacity for both short and long term's production. He must use break-even analysis for capacity
planning.

4. Production Planning

Production management includes production planning. Here, the production manager decides about
the routing and scheduling.

Routing means deciding the path of work and the sequence of operations. The main objective of
routing is to find out the best and most economical sequence of operations to be followed in the
manufacturing process. Routing ensures a smooth flow of work.

Scheduling means to decide when to start and when to complete a particular production activity.

5. Production Control

Production management also includes production control. The manager has to monitor and control
the production. He has to find out whether the actual production is done as per plans or not. He has
to compare actual production with the plans and finds out the deviations. He then takes necessary
steps to correct these deviations.

6. Quality and Cost Control

Production management also includes quality and cost control. Quality and Cost Control are given a
lot of importance in today's competitive world. Customers all over the world want good-quality
products at cheapest prices. To satisfy this demand of consumers, the production manager must
continuously improve the quality of his products. Along with this, he must also take essential steps to
reduce the cost of his products.
7. Inventory Control

Production management also includes inventory control. The production manager must monitor the
level of inventories. There must be neither over stocking nor under stocking of inventories.

If there is an overstocking, then the working capital will be blocked, and the materials may be spoiled,
wasted or misused.

If there is an understocking, then production will not take place as per schedule, and deliveries will be
affected.

8. Maintenance and Replacement of Machines

Production management ensures proper maintenance and replacement of machines and equipments.
The production manager must have an efficient system for continuous inspection (routine checks),
cleaning, oiling, maintenance and replacement of machines, equipments, spare parts, etc. This
prevents breakdown of machines and avoids production halts.

Objectives of Marketing Management

Management is the process of getting things done through other people. Following are the five key
objectives of marketing management:-

Generate customer base

The responsibility of the marketing manager is to attract new customers and retain old customers for
the business enterprise. Thus, to create product awareness among people many promotional activities
viz. advertisement, distribution of samples, display of goods, etc. are carried out, which in turn increase
sell of goods and services and generate profit for the firm.

Customer Satisfaction

The basic priority of the modern marketing is the satisfaction of the customer (or consumer). Thus, the
marketing manager scientifically studies the needs and demands of the customers before offering
them any goods or services. Here, satisfying customers does not simply mean matching products with
customers’ needs. It also requires regular supply of goods and services of reasonable quality at fair
prices.

Market Share

The purpose of business activity is to increase its market share i.e. the ratio of its sales to the total
sales in the economy. For this, companies may adopt all means of sales promotion viz. discounts, sales
promotion, gifts, gift coupons, etc. to create awareness of its product in the market.

Profit Maximization

Without earning profit, no firm can survive in the market. Thus, profits are also needed for the growth
and diversification of the firm. Hence, for maximization of profit, the marketing manager tries to satisfy
the needs and wants of customer and maintains the regular supply of goods and services at fair prices.
Earn goodwill for the business

To build up the public image of the firm, the marketing management provides good quality products
to the customers at reasonable rates and thus creates its positive image among the customers. The
role of marketing manager is to sustain and raise the goodwill of the business through sales promotion,
publicity, advertisement, high quality and reasonable prices of products, convenient distribution
outlets, etc. If a firm enjoys goodwill in the market, it would increase the morale of its’ sales-force,
which in turn increases profit.

Increases living standard among people

The marketing management attempts to increase the quality of life of the people by providing them
better goods and services at reasonable rates. It facilitates production and distribution of a wide variety
of goods and services for use by the customer.

Functions of Marketing

Marketing is a very broad term and cannot be explained in a few words. Marketing is an essential
business function that helps in making the customers aware of the products or services that are offered
by a business.

The definition of marketing as defined by the American Marketing Association is as follows.

“Marketing is the process of planning and executing conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.”

Functions of marketing are those aspects that define the practice of marketing and are being discussed
in detail in this article.

The following are the functions of marketing:

1. Identify needs of the consumer: The first steps in marketing function is to identify the needs and
wants of the consumer that are present in the market. Companies or businesses must therefore gather
information on the customer and perform analysis on the collected information.

By doing this they can present the product or service that matches closely with the customer needs
and wants.

2. Planning: The next step in marketing function is planning. It is considered very important for a
business to have a plan. The management should be very clear about the company objectives and
what it wishes to achieve from the created plan.

The company should then chalk out a timeline that is essential for achieving the objectives.

3. Product Development: After the details are received from the consumer research, the product is
developed for use by the consumers. There are many factors that are essential for a product to be
accepted by the customer, a few factors among the many are product design, durability and cost.
4. Standardisation and Grading: Standardisation refers to the process of ensuring uniformity in the
product which means that a product developed by a business shall be standard for every consumer
with the same quality and design and this is one of the key aspects that needs to be maintained by the
business.

Grading is referred to as the process of classifying products that are similar in quality and
characteristics. Grading helps in making the customer know about the quality of the product offered.
It helps in making customers understand that the products conform to highest quality standards.

5. Packing and Labelling: The first impressions of a product are its packaging and the label attached to
it. Therefore, packaging and labelling should be looked after very well. It is a well known fact that a
great packaging and labelling goes a long way in ensuring product success.

6. Branding: Branding is referred to as the process of identifying the name of the producer with the
product. Certain brands are there in the market which have a lot of goodwill and any product coming
from the same brand will be accepted more warmly by the consumers. Although, having a separate
identity for the product can be helpful.

7. Customer Service: A company has to set-up various kinds of customer service based on their
product. It can be pre-sales, technical support, customer support, maintenance services, etc.

8. Pricing: It can be regarded as one of the most important parts of marketing function. It is the price
of a product that determines whether it will be successful or a failure. Some other factors are market
demand, competition, price of competitors.

The company or business should understand clearly that bringing about frequent changes in the price
of a product can lead to confusion in the minds of consumers.

9. Promotion: Promotion is the process of making the customers aware of the product by presenting
it to customers across various channels of promotion and entice them to buy the product.

The major channels of promotion are: advertising, media, personal selling and promotion (publicity).
An ideal promotion mix will be a combination of all or some methods.

10. Distribution: Distribution refers to the movement of consumer goods to the point of consumption.
A company must ensure that the correct channel of distribution is selected for the product.

The mode of distribution is dependent on the factors such as shelf life, market concentration and
capital requirements. Proper management of inventory is also essential.

11. Transportation: Transportation is defined as the physical movement of goods from one place to
another. In other words, it is the movement of goods from the place of production to the place of
consumption.

Also, the correct mode of transportation can be selected based on the geographical boundaries of the
market.

12. Warehousing: Warehousing of products creates time utility. It is often seen that there is a gap
between the time a product is produced and the time when it is consumed. Companies like to maintain
the smooth flow of goods even when the products are of seasonal nature. Warehousing and storing
provides the opportunity to provide goods during off season also.

Objectives of Human Resource Management

Below are 8 primary objectives of human resource management with in-depth elaboration
respectively:

Achieve Organizational Goals

Work Culture

Team Integration

Training and Development

Employee Motivation

Workforce Empowerment

Retention

Data and Compliance

1. Achieve Organizational Goals

HRM function starts here. One major HRM objective is to fulfil organizational goals. Utilizing human
resources to achieve business requirements and goals is very important for an effective HRM.
Organizational objectives include workforce handling, staff requirements like hiring and onboarding,
payroll management, and retirement. To succeed at the organizational objectives, HR requires efficient
planning and execution. Without a set parameter for goals and mission and resources, HRM is
incomplete. After you know your resources and planning at the place, achieving HRM objectives is not
so difficult. Some more objectives are explained further.

2. Work Culture

When it comes to handling HRM effectively and following objectives, employee and work environment
are the prior factors. Work culture plays an important role in defining HRM and business performance.

An HR manager needs to be active while calling for strategies to foster better work culture. Automated
activities like leave approvals, reimbursement request acknowledgement, etc. can help you. Quick
operations and empowerment to employees help in creating positive vibes at the workplace.

Developing and maintaining healthy and transparent relations among team members and teams
contribute to building a good example of work culture. Adopting the right solutions like employee
management system can solve more than half of your job. Small steps like short and sound onboarding
processes can help build a good image of the workplace.

3. Team Integration

One of the prime roles and objectives of HRM is to make sure the team coordinates efficiently. Easy
communication is the need for teams at an enterprise. An HR here must ensure a tool to assist in
making the integration easier and smooth.

The proper connection between individuals is a must to ensure productivity. To make human capital
management successful, you need to search for better integration portals to make data availability
easier for people. Functional objectives like team integration are to produce streamlined operations
and tasks. A right tool like the self-service portal can bring employees closer to HR folks.

4. Training and Development

Workforce being effective and performing are two important and basic elements to work upon for
achieving your basic objectives at an organization. With proper training and providing future
opportunities, employees feel safe and organized. Effective employment is highly dependent upon the
training practices. Providing opportunities to employees is one great step to ensure workforce
management.

There might be difficulties such as planning, scheduling, training sessions, and evaluation of each on-
boards. To lessen the pain, solutions like training management software can help you with auto-
reminders, easy scheduler, reporting, and tracking capability. The HR manager can ensure effective
training practice at the firm.

5. Employee Motivation

The prime objective of HR folk is to keep things on the right path. Keep distractions and negative vibes
away. For this, the employees need to be attended to and kept motivated throughout. How can HR
motivate employees?
Give powers to them. Take their views on things. Involve them in weekly meets or decisions. Even if it
is a fresher, let them join. Keep the morale always high. Employee recognition like yearly appraisal
based on their performance can too help.

An automated feedback system for performance appraisal management can keep your employees
motivated and ensure productivity throughout the service. When the employees are satisfied and
fulfilled, nothing else can prevent you from losing your objectives and goals.

6. Workforce Empowerment

Talking about employee motivation, nothing can work better than empowering them. Empowering
them with tools like ESS portal can help save HR efforts too.

With the portal, employees can themselves apply for approvals and track them through their mobile
phones. Be it leave request, generating payslip, checking PF account, remaining leaves, upcoming
holidays, manager details, or anything, HR intervention is least required. Now, you no more need to
knock on HR’s desk for small queries.

What else could empowering workforce take? How would you ensure the right workforce
engagement? Effective HRM measures can definitely help. Look for easy employee management tips.

7. Retention

Providing leadership qualities and opportunities, a healthy working area, and employee retention are
some prime objectives and deliverables of the HR managers. Keeping employees retained and
motivated needs to be a top priority for HRM.

Other than employee hiring, onboarding, and training cycle, keeping the employees retained for long
is the biggest challenge AKA objective of the HR people. It often occurs that employees leave the
organization within 2 months of onboarding. It can be due to ineffective training management or a
rough hiring process.

Employee experience needs to be carefully attended. Keeping your employees retained can help
maintain a good state of employee turnover. To keep it stable, the HR manager needs to learn the best
retention tips for business.

8. Data and Compliance

Functional and organizational objectives also include managing company/ employee data and
managing compliances. Managing payroll compliances and keeping the company out of any penalties
or fines is a huge challenge for HR people and managers.

Even a small error or miscalculation can owe you huge penalties and even may lose respect. When
committing to tasks like employment and payroll, you need to be careful about laws and regulations.
The objective here is to keep any unwanted claims at bay for smooth functioning.

Automated software like the HRMS system can help you keep errors at the side and leave no window
for owing any penalty from IRS. It is the responsibility of HR to follow IRS guidelines and standards for
effective employment at the company. Stay assured of all the legalities.

Functions of HRM:
Job design and job analysis

Employee hiring and selection

Employee training & development

Compensation and Benefits

Employee performance management

Managerial relations

Labour relations

Employee engagement & communication

Health and safety regulations

Personal support for employees

Succession Planning

Industrial Relations

1. Job design and job analysis

One of the foremost functions of HRM is job design and job analysis. Job design involves the process
of describing duties, responsibilities and operations of the job. To hire the right employees based on
rationality and research, it is imperative to identify the traits of an ideal candidate who would be
suitable for the job. This can be accomplished by describing the skills and character traits of your top-
performing employee. Doing so will help you determine the kind of candidate you want for the job.
You will be able to identify your key minimum requirements in the candidate to qualify for the job.

Job analysis involves describing the job requirements, such as skills, qualification and work experience.
The vital day-to-day functions need to be identified and described in detail, as they will decide the
future course of action while recruiting.

2. Employee hiring and selection

Recruitment is one of the primary functions of human resource management. HRM aims to obtain and
retain qualified and efficient employees to achieve the goals and objectives of the company. All this
starts with hiring the right employees out of the list of applicants and favourable candidates.

An HRM helps to source and identify the ideal candidates for interview and selection. The candidates
are then subjected to a comprehensive screening process to filter out the most suitable candidates
from the pool of applicants. The screened candidates are then taken through different interview
rounds to test and analyse their skills, knowledge and work experience required for the job position.

Once the primary functions of HRM in recruitment are completed, and the candidate gets selected
after rounds of interviews, they are then provided with the job offer in the respective job positions.
This process is important because these selected employees will, after all, help the company realise its
goals and objectives.
3. Employee training & development

Imparting proper training and ensuring the right development of the selected candidates is a crucial
function of HR. After all, the success of the organisation depends on how well the employees are
trained for the job and what are their growth and development opportunities within the organisation.

The role of HR should be to ensure that the new employees acquire the company-specific knowledge
and skills to perform their task efficiently. It boosts the overall efficiency and productivity of the
workforce, which ultimately results in better business for the company.

HRM plays a very crucial role in preparing employees for bigger tasks and responsibilities, which leads
to the holistic development of employees at work. And an organisation which provides ample growth
and development opportunities to its employees is considered to be a healthy organisation.

4. Compensation and Benefits

Benefits and compensation form the major crux of the total cost expenditure of an organisation. It is
a must to plug the expenses, and at the same time, it is also necessary to pay the employees well.
Therefore, the role of human resource management is to formulate attractive yet efficient benefits and
compensation packages to attract more employees into the workplace without disturbing the finances
of the company.

The primary objective of the benefits and compensation is to establish equitable and fair remuneration
for everyone. Plus, HR can use benefits and compensation as a leverage to boost employee
productivity as well as establish a good public image of the business.

Therefore, one of the core HR department functions is to lay down clear policies and guidelines about
employee compensation and their available benefits. One of the functions of HR manager is to ensure
the effective implementation of these policies and guidelines. This creates equality and builds
transparency among the employees and the management within the organisation. After all, the level
of employee satisfaction at work is directly proportional to the compensation and benefits they
receive.

5. Employee performance management

The next activity on HR functions list is effective employee performance management. Effective
performance management ensures that the output of the employees meets the goals and objective of
the organisation. Performance management doesn’t just focus on the performance of the employee.
It also focuses on the performance of the team, the department, and the organisation as a whole.

6. Managerial relations

Relationships in employment are normally divided into two parts — managerial relations and labour
relations. While labour relations is mainly about the relationship between the workforce and the
company, managerial relations deals with the relationship between the various processes in an
organisation.
Managerial relations determine the amount of work that needs to be done in a given day and how to
mobilise the workforce to accomplish the objective. It is about giving the appropriate project to the
right group of employees to ensure efficient completion of the project. At the same time, it also entails
managing the work schedules of employees to ensure continued productivity. It is essential that HR
handles such relations effectively to maintain the efficiency and productivity of the company.

7. Labour relations

Cordial labour relations are essential to maintain harmonious relationships between employees at the
workplace. At the workplace, many employees work together towards a single objective. However,
individually, everyone is different from the other in characteristics. Hence, it is natural to observe a
communication gap between two employees. If left unattended, such behaviours can spoil labour
relations in the company.

Therefore, it is crucial for an HR to provide proper rules, regulations and policies about labour relations.
This way, the employees have a proper framework within which they need to operate. Therefore, every
employee will be aware of the policies which will create a cordial and harmonious work environment.

Such a structured and calm work atmosphere also helps with improving performance and aching
higher targets.

8. Employee engagement and communication

Employee engagement is a crucial part of every organization. Higher levels of engagement guarantee
better productivity and greater employee satisfaction. Efficiently managing employee engagement
activities will help in improving the employee retention rates too. HRM is the right agent who can
manage the employee engagement seamlessly. Proper communication and engagement will do
wonders for the employees as well as the organization. The more engaged the employees are, more
committed and motivated they will be.

Human resource teams know the ‘humans’ of the organization better than anyone else. This gives
them an upper hand in planning engagement activities. Although such activities might not fall under
the direct functions of HRM, they are indeed required for the organizational welfare and employer
branding.

9. Health and safety regulations

Every employer should mandatorily follow the health and safety regulations laid out by the authorities.
Our labour laws insist every employer to provide whatever training, supplies, PPE, and essential
information to ensure the safety and health of the employees. Integrating the health and safety
regulations with company procedures or culture is the right way to ensure the safety of the employees.
Making these safety regulations part of the company activities is one of the important functions of
HRM.

10. Personal support for employees

HRM assists employees when they run into personal problems which may interfere with the workflow.
Along with discharging administrative responsibilities, HR departments also help employees in need.
Since the pandemic, the need for employee support and assistance has substantially increased. For
example, many employees needed extra time off and medical assistance during the peak period of the
pandemic. For those who reached out for help, whether it may be in the form of insurance assistance
or extra leaves, companies provided help through HR teams.

11. Succession Planning

Succession planning is a core function of HRMs. It aims at planning, monitoring, and managing the
growth path of the employees from within the organizations.

What usually happens is that promising and bright employees within the organization who have
excelled in their roles are handpicked by their supervisors and HRs, and their growth paths are
developed.

This, of course, becomes quintessential as those employees who recognize the fact that the company
is investing in their growth and development, and therefore, will stay loyal in the long run. However,
while developing such employees towards a higher role, companies must keep in mind several aspects,
such as improving employee engagement, assigning challenging tasks and activities.

An employee leaving the organisation can prove to be disruptive and expensive. Therefore, succession
planning is a saviour of some sorts, as it helps identify the next person who is just right to replace the
outgoing individual.

12. Industrial Relations

It’s usually the production lines and manufacturing units where this HR function is mostly used. You
see, Unions exist in factories and manufacturing units. And their responsibility is towards the goodwill
about the workers — in fact, they’re always vocal and upfront about.

Now, for a company, especially into manufacturing and production, the HRs must have ongoing
Industrial Relations practices. They must also continuously engage with the Unions in a friendly and
positive manner to maintain amicable relations.

The true motive of Industrial Relation touches on a lot of issues within the company. For instance,
Industrial Relations may be in place to meet wage standards, reduce instances that call for strikes and
protests, improve working and safety conditions for employees, reduce resource wastage and
production time and so on.

Industrial Relations is extremely important because, if handled properly, it can circumvent protests,
violence, walkouts, lawsuits, loss of funds and production time. IR is a sensitive yet critical function of
the HR department, naturally, it requires personnel with vast experience.

HRM plays a major role in the smooth functioning of the organisation. The process starts with
formulating the right policies for the job requirements and ends with ensuring a successful business
growth of the company. Therefore, HRM works as an invisible agent that binds together all the aspects
of the organisation to ensure smooth progress.

What do you mean by Quality Control?

Quality control (QC) is a procedure or set of procedures intended to ensure that a manufactured
product or performed service adheres to a defined set of quality criteria or meets the requirements of
the client or customer. QC is similar to, but not identical with, quality assurance (QA). While QA refers
to the confirmation that specified requirements have been met by a product or service, QC refers to
the actual inspection of these elements.

QA is sometimes expressed together with QC as a single expression: quality assurance and control
(QA/QC).

What do you mean by Research & Development?

Research and development is the generation of new knowledge. In a business context, it is an activity
that companies undertake in order to develop new products, processes or services, or improve those
that already exist. In order to do this, businesses often take on risk. This is because uncertainties exist
around if what they are attempting is technologically feasible, or, more commonly, they don’t know
how they will achieve their objectives in practical terms.

R&D is an essential function for many businesses. Launching new offerings or improving existing ones
is a way for a business to remain competitive and make profit.

When developing a new product, process or service, or refining an existing one, R&D is one of the
earliest phases. Experimentation and innovation is often rife at this stage, along with risk. The R&D
cycle often begins with ideation and theorising, followed by research and exploration and then into
design and development.