Just like we already discussed in last chance, the unique point from manufacture industry is its production process. We could even say that a company only able to categorized as a manufacture company if they have a production process. If the company doesn’t have a production process but tell the world that they are a manufacture industry, then we could say that they need a rest.
By the way, if we talked about production process, then we will talk about production model that generally a company have. In one manufacture company, usually there is two model we could use. That model is: push and pull. A company can use pull only, or push only, or even both of them. Finally everything is depend on the company need. Or we can say, money needs, hehe.
So let’s we discuss about the model, one by one:
Push Production Model
Just like we can see from the literally meaning, push is a push. It means, a production is produce in a as much as possible according to machine capacity, or labour capacity, or raw material availability. Finished goods usually not directly go into customer, but we keep them in our warehouse and sometimes, we don’t even know who is the customer for this finished goods. That’s why, this production model usually called as made to stock production. It means, production process is made in order to fulfilling company stock.
The plus side of this production process is when there is a deal with customer and customer quotation is finished, then the finished goods can be delivered just in time. There is no need to wait production process, because we already have the goods or the items.
But, there is also a minus side from this production model. One thing is there is a lot of cost that we have to pay. Saving cost (that finished goods become deadly money which is really hated by stake holder). And then there is a risk if the finished goods not used in a very long time, will make it down grade and even make it worthless and we cannot selling it at all. That’s why, in food industry and short time goods not used this production model.
Pull Production Model
On the Contrary with push production mode, pull model only doing production process in pull term. It means, the item that produced based on sales order so when we produce an item, we already know, who is the customer.
Pull production model have a lot of profit. But one of the condition is that a company production process record is already neat. From the record of raw material which is must suitable with finished goods target, also with the exact time record to make sure that the customer will satisfied with our service. Usually, a company which already implementing ERP Software doesn’t have a problem in doing this model. But if the record is not good enough, we can see that a potencial loss will really big.
Both of this production model have their plus and minus. But, whatever this is, we cannot avoid that production perform will need other perform from other department, which is inventory (as a source of material data, formula, sparepart, and warehouse capacity), procurement (as they responsible for purchase item for make production process), finance (as they responsible for margin planning, and many others), plant maintenance, quality control, and many more.
Production as a top of process in manufacture business have a high complexity. But off course, in manufacture industry, production talk is one of the most interesting topic and also challenging to be solved. So, are you interested in talking about your company production process with me? i’ll wait…