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Masters of Business Administration Notes


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Scope of Production Management
Production management is mot often associated with factory management rather than with the broader definition given above and logically so, because the significant problems of production first occurred in the factory.


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Before evolving of factory system, the large number of one-man shops that produced goods presented insignificant problem of production management. With the factory system, however, the situation changed and the problem to organize, layout facilities, control quality and meet schedules had to be tackled with. Thus the field of production management began to develop. In early stage, steps concentrated to control labour cost, since at that time the labour costs constituted most of the production cost. With the continuing development of factory system, the trend towards mechanization and automation developed. In the factory, indirect labour costs increased tremendously in relation to direct labour costs. Thus, in the factory, has had to develop in the fields of designing and packing of products, indirect labour cost control, production and inventory control and quality control. Since nearly thirty years the business has rapidly developed into large scale units. Here, the facility design, location, layout, quality control and inventory control take on new significance. Thus, to-day the production management has to cover a wide range of different types of activities to be performed in factories and industries.

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