I.T. and Production Analysis (Part 1)

Production Analysis' is a hotcake nowadays. Manufacturing units whether they are small, big or giant, want to know everything about 'Production'. 'Production Analysis' is much important considering many aspects. IT has picked-up its speed so that almost all types of businesses need it. Today almost each-n-every establishment uses it to meet planned output and keep market sustainability.

Present “every-where IT” era has made production intuitive with the help of various modern technologies, tools, and advanced concepts.

IT helps to get the production improved in all stages:

What does ‘Production’ mean?

Before starting about 'Production Analysis' let's understand about 'Production' in brief. There is more than one definition of production. Most of the economists introduced the meaning of 'Production' in their words. So, it is very tough to pick the exact and appropriate one from them. But after studying a lot, the following definition has come out:

'Production' means transforming required elements/factors to get a tangible/nontangible thing for a definite purpose.

Basic factors of 'Production'

'Production' relies on four basic factors: Land, Labour, Capital, and Enterprise. All these factors are an economic term introduced my most economists and production-analysts. According to them, these factors are the general inputs used to produce goods and services to make it of definite use or profit.

Land: Land is referred to as one of the most important factors. Because most of the raw material comes from it such as Timber, Coal, Metal, Minerals, and Water. Natural resources, such as oil and gold, can be extracted and refined for human consumption from the land. The cultivation of crops on land by farmers increases its value and utility. Even infrastructure and other business setups are not possible without land.

Labour: According to the economic term the manpower is known as 'Labour'. Manpower is used to perform physical and intellectual tasks to keep a business running. E.g. Telephonic reactions, statutory works, the arrangement of materials, movement of WIP and finished goods, bargaining etc. The word "Labour" is usually referred to as physical works. But as an exception, in the software industry, a computer programmer, a project manager or a data-entry operator and likewise all other persons performing tasks using a computer are also a sort of labour.

Capital: Capital is the third important factor that affects the ‘Production’. Capital indicates the capacity to become a producer. Infrastructure, Machinery, Devices and Tools are considered as physical capitals. On the other side human's wisdom, the interest of performing tasks, working capability, subjective knowledge, technical expertise etc. are Intellectual capital. According to an eternal commercial myth, the customer/end-user is the most important element of any business/commercial activity. A customer belongs to a society. That's why the Society is also known as a Social Capital.

Enterprise: An enterprise or entrepreneurship is the fourth important factor that affects production. Entrepreneurship is the secret sauce that combines all the other factors of production into a product or service for the consumer market. E.g. Café Coffee Day. The retail coffee chain needs all four factors of production: land (prime real estate in big cities for its coffee chain), capital (large machinery to produce and dispense coffee), and labour (employees at its retail outposts for service). The company’s founder Veerappa Gangaiah Siddhartha Hegde was the first Indian entrepreneur to realize that a market for such a chain in India will be the great business. He figured out the connections between the other three factors of production and established India's largest and most successful coffee bar business.

Discussion about all the four factors clearly indicates that 'Production' analysis is a very huge subject. Just measuring productivity or maintaining and following up 'production' log sheets are not 'Production Analysis'. These are just a part of this.