Production and Materials Management

Core components of ERP:

  1. Accounting and Finance
  2. Production and materials management
  3. Human Resources

Definition of production and materials management:

It is one of the core components of ERP which handle various aspects of production planning and implementation. This process involve forecasting, scheduling, ordering, and quality control.

Production management:
Based on the definition in the wikipedia, "product management
is an organizational lifecycle function within a company dealing with the planning or forecasting or marketing of a product or products at all stages of the product cycle." It deals mainly with the manufacturing of the goods. Product management are very similar with product marketing. They share the same goal which is to produce a product that will maximize company's profit. However, there are several differences. One of them is product management focuses on how the company operate in producing the product and deal mainly before the product is being sold to the public. On the other hand, product marketing focuses on how the product is selling in the public. Product marketing deals with ways to make the product successful in the market. Its means of making the product successful in the market can range from advertisement, promotions and even gifts. Since there is a direct relationship between production management and product marketing, it is very important for the manager in the production management to communicate with the product marketing to find out what the market is seeking and translate the idea of the type of product to be produced.

Product management is supported by many well-known software. Some of the examples of software for product management are Oracle 10g database produced by oracle, SAP R/3 ERP made by SAP AG, etc. These software will help a company in understanding the product market better and produce a successful product.

Materials management:
Different from production management, materials management focus mainly with tangible components. Based on wikipedia, materials management can be defined as follows:
"Materials management is the branch of logistics that deals with the tangible components of  a supply chain. Specifically, this covers the acquisition of spare parts and replacements, quality control of purchasing and ordering such parts, and the standards involved in ordering, shipping, and warehousing the said parts." This management is very important for companies especially in manufacturing companies as materials is the major components in production. If company is able to manage their inventory, by buying the most beneficial amount of materials, there will obtain a higher profit. This is because insufficient of materials to make products will lead to inability to sell desired amount of products, and too large number of materials in access can lead to high amount of inventory cost which will also lead to decrease in profit. Thus, the flow of the materials in the production cycle is very important to be well managed and to obtain high profit.

One example of material management is MAX material manager  which is produced by Manufacturing Applications eXperts, Inc. It helps in managing materials of a company. The company will be able to track their inventory; how many goods go into inventory and used in production.

There are several product cycle that are used to support the company. here are some of the links that will direct us to the diagram