Production management and material management: key differences, tips, and solutions

Perfecting your production management is essential for a successful manufacturing business.

Essentially, you can define your production management definition as an optimization problem. The ultimate objective of production management is to optimize your production line’s efficiency with your current resource capacity — manufacturers need production management.

In this article, we look into production management, operations management, and material management, focusing on why they are important, and how you can make them work for your business.

What is production management?

Production management, or operations management, focuses on achieving a smooth production process with efficient planning and control of business operations.

It has the ultimate objective of optimizing your manufacturing efficiency with your current capacity. To achieve this, you need to find the best manufacturing process for your business.

Repetitive manufacturing

This is a 24/7 production/assembly line, made possible with the use of manufacturing process automation such as conveyor belts and robotics.

Discrete manufacturing

This too relies on production lines. But the products that are produced by the manufacturer are varied, which requires the line to be set-up, and changed, depending on the products in production.

Job shop manufacturing

The humble manufacturer’s choice of manufacturing process management, which utilizes workshops and separate production areas to allow for bespoke products.

Batch manufacturing

Batch manufacturing allows manufacturers to make products in the necessary number of batches needed to satisfy customer demand.

Continuous manufacturing

Another manufacturing process that runs 24/7, although this process deals with raw materials such as gasses, liquids, powders, or slurries, including areas like mining, where the products can be more granule.

The functions of production management systems

Process operations are defined as a process of production management that includes any of the above workflows. Let’s look at the functions of production management in more detail. 

Production control service

This is where you’ll monitor production to make sure everyone executes the correct plans in the manufacturing process. The purpose is to react quickly if things deviate from the plan and make sure everything runs smoothly.

Scheduling

This one is a critical function in any business. Production scheduling is when you plan when production will start and finish during a project run.

Cost and quality control

The aim of this is to produce the highest quality product at the lowest possible cost, not just by saving money for your business, but by offering your customers a fairer price, too. To maintain consistent quality, be sure to follow your production quality control checklist.

Maintenance of machines

Finally, you’ll want to make sure all your tools and machinery are spic-and-span to avoid them underperforming or breaking down and stopping production completely.

Implementing production management

When trying to achieve production and operations management, you’ll need to make decisions at three different stages:

1. Production planning

Essentially this will be your master production schedule. As the manager, you’ll need to decide where, when, and how production will start.

2. Production control service

This is where you’ll focus on quality, costs, and shop floor control.

3. Improving operations and productions management

The final stage of production management and operations is the development of more efficient methods of manufacturing the firm’s goods and services.

That’s a breakdown of what is production management and its definition, so let’s now move on to its counterpart, operations management.

What is operations management?

Operations management is pretty similar to production management. It is the day-to-day running of the business, ensuring operations and production are carried out efficiently and smoothly. This also includes handling administrative, factory-level, and service management.

The focus point of your operations management is the customer. If the customer is satisfied, then you’re heading in the right direction. However, how you handle your resources is also the function of operations management, since you want to be improving customer satisfaction with the least amount of wastage with the maximum utilization of resources. But what are the functions of operations management?

Strategy

From raw inventory management to routing manufacturing, under operations management, you’ll need to develop plans and tactics that will help you achieve lean inventory and a smooth production flow to get a competitive edge over your competitors.

Product design

Here is where you should investigate if your product caters to the needs of the customers and follows the market trend. Yes, your product may have survived the prototype stage, but people’s needs and wants change, and you need to be ready to adapt your product to those shifts in manufacturing trends and predictions.

Forecasting

Demand planning will allow you to understand how your product is performing in the marketplace, and decide on how to proceed, be that increasing, decreasing, or even stopping production on a product.

And that’s the ins and outs of operations management. As you can probably see, the difference between production management and operations management isn’t much. Regardless of if you struggle to set them apart or call it something else, here’s why it’s important to have your operations and production management down to a tee.

What’s the difference between production and operations management?

Production and operations management is an all-encompassing term that covers managing the manufacturing of your products and those finished goods and services.

You might be furrowing an eyebrow, “Aren’t those two technically different areas?” Traditionally speaking, a manufacturer would make its products and dispatch them to a third party, and that would be the end of it. But, as more businesses take more control over their company and brand, they’ve started to introduce services such as customization into their production.

And as we control more aspects of our business, we need to also balance production and operations management.

As manufacturers have drifted toward a direct-to-consumer brand, and even retailers now manufacture their own branded products, the line between production management and operations, products and services, has become increasingly blurred. Are you still confused? Production and operations management are very similar, but the main difference between the two is:

Production management — Monitoring and managing the manufacturing of products.

Operations management — The services which are on offer to the customer and the work that needs to be done to finish the production.

Why is production and operations management important?

Production management and operations management is not just recommended to improve some areas of your business, but it is essential. Otherwise, you could find your business struggling to meet orders and lose customers. So, as a manufacturer, by understanding operations management and the importance of production management, you can:

1. Accomplish business objectives

By performing your production and operations analysis, you’ll be able to achieve business objectives by efficiently producing goods and services that meet the needs of the customer. This will increase customer satisfaction, which, in turn, increases your sales and profit.

2. Boost brand image

Important for D2C manufacturers, with production and operations analysis, you’ll be able to raise your reputation as a business that delivers quality products and fair prices.

3. Reduce manufacturing costs

Essentially, the goal of a production management system is to achieve lean manufacturing. By optimizing your manufacturing output, you can expect to lower your manufacturing costs either by not having resources waiting idly by or figuring out the best way to keep inventory, such as using ABC inventory. 

Now that we’ve tackled the subjects of production management, as well as operations management, it’s time to also take a look at material management, and what it’s all about. Think of it as the third piece of the puzzle we’re trying to put together here for you, to give you a better picture of how these processes intertwine and how they keep your operations moving forward. 

What is material management?

Material management in manufacturing refers to the planning, organizing, and control of the flow of materials and inventory throughout the production process. It encompasses a wide range of activities aimed at ensuring that the right materials are available at the right time, in the right quantity, and at the right cost. 

Below are some of the key components of material management for the manufacturing industry. 

• Procurement — Sourcing and purchasing raw materials and components needed for production
• Inventory management — Monitoring and controlling stock levels to minimize costs while ensuring that materials are available when needed
• Inventory storage — Managing the storage of materials to optimize space and maintain material quality
• Transportation — Coordinating the movement of materials between suppliers, storage locations, and production areas
• Production planning — Aligning material availability with production schedules to meet demand
• Quality control — Ensuring that materials meet required specifications and standards before they enter the production process
• Supplier management — Building and maintaining relationships with suppliers to ensure reliable delivery and quality of materials

What’s the difference between production management and material management?

Without even going into details, you can sense the answer to this question here. Production management, as the name suggests, focuses on the entire production process, while material management focuses on the materials and resources needed within that production process. Basically, there’s no production, and no final product, without the required materials. 

• Production management focuses on the overall manufacturing process, including planning, scheduling, and controlling production activities to maximize efficiency, minimize costs, and ensure product quality. It encompasses aspects like workflow management, capacity planning, and quality control.

• Material management deals specifically with the procurement, handling, storage, and distribution of materials used in production. Its primary goal is to ensure that the right materials are available at the right time and at the right price, thus supporting the production process. 

While both functions are interconnected, production management is broader in scope, while material management is a critical subset focused on materials.

The different types of material management

While it might seem like a small piece of the production management puzzle, material management is a critical component of the supply chain. By failing to provide the necessary materials needed for the smooth flow of operations, the entire system can come to a halt, causing unwanted delays in your production process and leading to dissatisfied customers. Let’s take a look at the types of material management you should focus on, depending on the specific needs of your business. 

• Inventory management — Involves overseeing a company’s stock of raw materials, semi-finished goods, and finished products. This includes identifying optimal inventory levels, determining reorder points, and ensuring proper storage. The goal is to balance the costs of holding excess inventory with the risks of stockouts.
• Warehouse management — Focuses on the storage, handling, and movement of goods within a warehouse, through activities such as receiving, storing, and shipping materials while managing inventory levels and their locations. The primary objective is to maximize space utilization and minimize storage and handling costs.
• Purchasing management — Entails sourcing raw materials, supplies, and services needed for production, which includes selecting suppliers, negotiating prices, preparing purchase orders, and managing supplier relationships. Its primary goal is to obtain high-quality materials at competitive prices while ensuring timely delivery.
• Transportation management — Focuses on the movement of materials between locations, keeping tabs on tasks such as selecting carriers, negotiating freight rates, preparing shipping documents, and managing delivery schedules. Its primary goal is to ensure timely delivery of materials while minimizing transportation costs.
• Material requirements planning (MRP) — A system designed for inventory management that helps plan production schedules and manage material procurement. It takes into account lead times, production durations, and current inventory levels to ensure that the right materials are available in the correct quantities at the appropriate times for production.

What are the key objectives of material management?

The key objectives of material management are as follows:

• Right materials — Ensuring the right materials with the right specifications required for the job are available
• Right time — Ensuring these materials are available at the right time, as needed, thus avoiding overstocking or stockouts
• Right amount — Ensuring the materials are available in the required amount for successful production
• Right prices — Ensuring the materials are purchased at the right price, by negotiating with suppliers and implementing cost-effective measures such as reducing lead times and waste reduction 
• Right sources — Ensuring the materials come from reputable, reliable sources, by establishing long-term relationships with suppliers 

What’s the role of a materials manager?

You can take a wild guess at what the job of a materials manager implies, by looking at the list of objectives above. A material manager handles the procurement, the storage, and the delivery of the materials required for the production process, ensuring that everything goes smoothly from start to finish. Below are some of the tasks that are part of a materials manager’s day-to-day life. 

• Facility management
• Sourcing and purchasing materials
• Inventory management
• Receiving and inspection
• Operations management
• Demand and risk management
• Cost management 
• Production planning

We now know what production and material management involve, and the benefits of practicing them. However, it’s a lot of hard work, and perfecting your manufacturing operations can be argued as an impossible dream. That’s why it’s fundamental to find a tool that can help you get your production management under control.

Automate your production and material management with Katana

Although it is possible to do your production management in a cumbersome spreadsheet, it’s not ideal since there’s so much you need to do, and you can’t afford to spend any time stuck doing mundane administrative tasks.

This is where automation comes into play. Katana’s cloud inventory software is an all-in-one platform that has been built for manufacturers looking to get more control over their production management and operations. Katana helps manufacturers by giving them the power of automation by:

• Scheduling production and calculating deadlines
• Planning and purchasing materials 
• Tracking finished goods and raw materials in real-time and allocating them to sale orders and manufacturing orders
• Calculating manufacturing costs

Katana can help you in this area by giving you access to:

A visual platform to monitor manufacturing

Katana’s intuitive and elegant platform allows manufacturers to see a breakdown of production status.

Once you’ve logged into Katana, the “Make” screen is where you’ll find the key elements that will help you with production management and give you an overview of your scheduled production, including the:

• Order number
• Customer name
• Quantity
• Production time
• Production deadline
• Material stock level status
• Production status using our red, amber, green (RAG) system
• Improved floor-level management

At the “Make” screen, under the “Tasks” you can see in more detail your floor-level progress, with a list of your workstations or team members and the jobs they’re working on, the operation being performed, and the status of that job.

Request a demo today and see for yourself how Katana can optimize your production and material management.

And until next time, happy manufacturing.