Next to Effective Utilization of Resources, we move on to Steady flow
Steady flow of Production essentially ensures an unbroken supply of
goods to the customers. Of course, to achieve this goal, apart from effective
utilization of resources, all machineries needed for production must be in
order; as we say, they should not act up at critical moments. In other words,
all the machineries must be well maintained.
Supposing a businessman has more than one place of manufacturing, of
production, then, keeping the steady flow of production becomes a little more
complex. Here we can use the term, most
popular and indispensable one, supply chain. It means, to be brief, all the
necessary materials required come to the business man in time; the materials
are used for manufacturing in the right time; and all his different places of
manufacturing must get the materials in ample quantity, and all the machineries
there must be in order to carry on the production. It basically involves
movements of materials and goods; so, the proper transport must be arranged so
that the supply chain does not suffer a break anywhere. A very complex business
strategy has been put here in a simplified manner. At every level of production beginning with
the acquisition of materials to the very production in various centres and the
final movement of the goods to the place of distribution to different types of
customers like wholesaler, agents and retailers, problem may arise quite
unexpectedly in the sense that men required for the jobs at all levels may not
turn up to the requirement; some may fall sick, so on.
We may have to discuss at length this concept of Supply Chain later.
One vital aspect of steady flow of production is it must follow the
strict time-schedule. That is, the products produced must reach the customers
when they need them in the places where they need them.
To have the steady flow of production, you must estimate the
resources. You must know how much
resources you need, and how many men. This estimate is guided by the sale
forecast. In other words, you plan production, as we said at the beginning,
according to the sale demand so that all the activities do not involve any
wastage of materials and unnecessary men who cannot be effectively employed.
One very significant critical fact must be mentioned here. The
forecast of sales need not be always correct.
The sale forecast has to include potential sales also. That is, discreet
number of sales that one can expect to take place in addition to the exact
number of sales one has arrived at based on specific information that is
confirmed order. To be reasonably good
at potential forecasts, you will have to depend on market scenario; you must
have a good knowledge about the market trends.
We will see how one can assess market trends in our next session.