Controlling as a Management Function

Jun 28th, 2015
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Production Planning and Control In any manufacturing enterprise production is the driving force to which most other functions react. This is particularly true with inventories; they exist because of the needs of production. In this chapter the relationship of production planning and control to work-in-process inventories is stressed. Objectives of Production Planning Control The ultimate objective of production planning and control, like that of all other manufacturing controls, is to contribute to the profits of the enterprise. As with inventory management and control, this is accomplished by keeping the customers satisfied through the meeting of delivery schedules. Specific objectives of production planning and control are to establish routes and schedules for work that will ensure the optimum utilization of materials, workers, and machines and to provide the means for ensuring the operation of the plant in accordance with these plans.

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ControllingIntroductionThe process of measuring performance and taking action to ensure desired results.Controlling ProcessControlling is a systematic process involving the following steps. 1. Setting performance standards 2. Measurement of actual performance 3. Comparison of actual performance with standards 4. Analysing deviations 5. Taking corrective actionStep 1: Setting Performance Standards: The first step in the controlling process is setting up of performance standards. Standards are the criteria against which actual performance would be measured. Thus, standards serve as benchmarks towards which an organisation strives to work.Standards can be set in both quantitative as well as qualitative terms. For instance, standards set in terms of cost to be incurred, revenue to be earned, product units to be produced and sold, time to be spent in performing a task, all represents quantitative standards. Sometimes standards may also be set in qualitative terms. Improving goodwill and motivation level of employees are examples of qualitative standards. The table in the next page gives a glimpse of standards used in different functional areas of business to gauge performance.At the time of setting standards, a manager should try to set standards in precise quantitative terms as this would make their comparison with actual performance much easier. For instance, reduction of defects from 10 in every 1,000 pieces produced to 5 in every 1,000 pieces produc

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