Production department definition
/What is the Production Department?
A production department is a group of functions within a business that is responsible for the manufacture of goods. This can include just a few specialized functions with all other work outsourced, or a fully functioning department that converts raw materials and sub-assemblies into finished goods, and packages them.
The production department can be the largest organization within a business. It may employ mechanics, machine setup specialists, maintenance personnel, and machine operators.
Objectives of the Production Department
The senior management team may task the production department with multiple objectives, which usually include some or all of the following:
Optimize bottleneck usage. The bottleneck operation within the department is closely monitored and supported so that throughput (revenue minus variable costs) is maximized. While it is generally profitable to reduce costs where possible in this department, that is not the case with the bottleneck operation, which should be fully supported at all times.
Increase production efficiency. An ongoing task is to locate situations in which production operations can be conducted more efficiently, and work with the industrial engineering staff to do so. These efforts are usually targeted at operations that are expected to run at high volume and for a long time, so that the overall results from even small incremental gains can be maximized.
Ship on time. The department should schedule production so that the business can meet its delivery promise dates with customers. This is a particular concern when the company maintains low finished goods inventory levels, so there is no buffer stock from which orders can be fulfilled.