Friday, 28 April 2017

What is production in supply chain?

Production is the part of the supply chain that makes and stores products. The different facilities that are used in production are the factories and warehouses when the products are made and stored. Managers of the supply chain need to decide how to find a balance between responsiveness and efficiency. Production facilities with a big capacity will be flexible and have the ability to respond quickly to demand. When the facilities capacity is being used it will not be able to cope as well with demand fluctuations. However, the capacity costs money and when capacity isn’t being put to full use it will not generate revenue.

There are two approaches to manufacturing, product focus and functional focus. The product focus is a factory that performs the different operations that need to take place in order to produce a product. The functional focus is concentration on a few operations that can be applied to making lots of different products. Examples of functional focus are making just some of the parts or performing assembly. 

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