Theories of Production

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Theory of production means knowledge of what is permanent and normal in industrial production. Traditionally, this knowledge has been accumulated in tacit form in the professional skill of industrial managers and artesans, but today more and more of it is being documented in writing by researchers.

Most studies of production use either one of two alternative approaches, that is, they have either descriptive or normative purpose, as can be seen in the diagram on the right. The two resulting theory paradigms differ quite much from each other even when the object of study is the same.

Descriptive theory contains knowledge about past or present production but does not much help for modifying it to correspond better to latest requirements. Academic or historical studies are often of this type. They are sometimes categorized in two types: extensive studies of a large number of cases, and intensive studies of one or a few cases.

Normative theory of production contains generally applicable knowledge and tools that can be used in the management of production, especially for optimizing existing production and planning new production. Research for creating normative theory is usually extensive because it needs a large number of cases for its material.

Moreover, a third type of research can take place in connection of the "commission" marked in the diagram. It means simply studying and planning the execution of individual tasks, for example preparing for a new type of service, or removing problems in existing service. These case-specific or "intensive" studies seldom produce generally applicable new theory and they will not be discussed in the following.

Subdivisions of the theory of production. Theory is created by doing research, but the difficulty is that in order to be effective, research projects can only study a few limited questions at a time. The number of important questions that any field of industrial production has to deal with, is many times larger than an empirical research project could handle. If somebody thus wants to make a larger compilation - such as a "Handbook of the production of xx" - this has to be made not from empiria, but instead by studying numerous earlier published research reports. Indeed, such product-specific compilations of theory have been made for many important fields of production. They will not be enumerated here, the main reason for it being that they are too numerous and besides they often soon lose their actuality because of the swift development of manufacturing technology.

The goal of manufacture is another possibility of categorizing theory of manufacture. There are only a few important types of goals of production that have attracted the interest of researchers, which means that by studying them it will be easier to get a good total view on the present theory of production than by perusing hundreds of handbooks of different products. These often used points of view in the current theory of production include:

Technology of production

Almost all products today are made with special machinery, and each of these machines operates on the basis of a specific technology, i.e. on a base of knowledge about the specific productive operation. An overview of the various technologies related to a given type of products usually follows the typical process of manufacture. For example, clothing technology can be said to consist of the following sections, each of which describes a major phase in the process:

Of course, for any given type of clothing the list of relevant technology can be shorter or longer than the general model given above.

The technological theory that exists for each productive operation consists, first of all, of data that define the role of the operation in the total production process. These data concern above all the capacity of each machine, its reliability, ease of use and other aspects of usability and, when relevant, the emission of chemicals. Besides, theory includes the instructions of using the machinery, written mostly by the constructors of these machines. Sometimes these instructions have been complemented by studies of occupational safety or methods engineering, carried out by the makers of the machinery or by the company that is using them.

Economy of production

The economic study of production aims at finding an optimum between benefits and expenditures of manufacture. For finding an optimum, several statistics are used, such as productivity and profitability, see Optimizing Production. In economics most elements of production are measured as monetary variables, which makes it possible to construct an economical image or projection of the manufacturing process, as has been made in the lower half of the diagram below.

Process of production

Instruments of economic management include budgeting the incomes and expenditures of production, setting objectives for the productivity of the most important operations; follow-up, measurement and reporting of all of these; and comparing the reported statistics to the agreed objectives.

Productivity Standards are a handy instrument when setting targets. They define the productivity of normal good pace of work, measured as work hours per manufactured unit, under various circumstances. These standards can then be used in work planning and possibly for defining work incentives or the wages for work contracts. The statistics to base the standard on can be obtained either from the factory's own files, or in co-operation between several or all the industries in a country, in a given branch of manufacturing.

Management by objectives is an arrangement where each employee agrees with his or her superior on the objectives for the next period's work in advance. The objectives are mostly economic. In this way the supervisor can clearly express which aspects in the activity are important from the company's point of view, and the employee gets more freedom in planning how the work is done. This arrangement persuades both parties to contemplate the purpose of the work and the means that are most effective to fulfil the agreed goals.

Management by objectives became very popular at the end of 20 century. Its weak point is that it is too easy to overlook quality of the products and other such goals of production that cannot easily be measured, which means that these goals should receive the special attention of any researcher that assists in developing a system of management by objectives.

Quality systems

Many large industries today have a quality system, a special arrangement for the task of defining and steering the quality of production. It usually consists of:

Quality systems are described in the standard ISO 8402 and in the series of standards ISO 9000. Most countries also have a system of official certification of those companies where a standardized quality system is operative.

Regardless of what the company says in advertisements, the target of quality is in practice seldom set at highest possible, because attaining it in every finished product would perhaps cost too much. Instead, the company often wishes to define an optimal level of quality and marks out how it shall be obtained in production. These are defined by researchers, and the management of the company then approves the targets for production.

A much less complicated method for improving the quality of production is the quality circle, a Japanese method in which each ordinary work team at a plant discusses, perhaps weekly, the possibilities of improving the quality of the products and of minimizing the errors and losses in production. Available means for making these improvements consist mainly of rearranging the working routines of the team itself, though improvements elsewhere can be proposed, too, such as better raw material or less complicated details of the product.

Timing of production

The goal in time scheduling of manufacture is to integrate all the tasks in the chain of production so that no unnecessary waiting occurs and each task is given enough time but no more. Methods of scheduling include the standards of productivity and task programming techniques such as Gantt and PERT diagrams, like the diagram below, and the critical path method.

PERT diagram

Explicit scheduling is indispensable especially in the case that the product consists of several parts that have to be made in different places. Besides, in many fields of production the company gets an advantage over competitors if it can deliver the product quickly. This goal can sometimes be achieved by concurrent engineering, i.e. overlapping some phases of the production, as in the Gantt diagram below.

Overlapping tasks

Setting targets for timing is a powerful technique of management because it is easy to define exact timing targets and follow them up. Targets thus often are attained successfully, but there is the usual risk of management by objectives - forgetting those goals that cannot be measured.

Another trap to be avoided in programming is that in the initial enthusiasm of a project the objective for timing can become too tight, which can then spoil the possibilities for doing high-quality work. Especially the design phase of products often necessitates a period - the length of which may be impossible to foretell - of subconscious maturing of the proposal, and if it is not allowed an optimal design proposal is perhaps never found.

Logistics of production

The locality where a product is sold nearly always differs from the place of obtaining the raw material, which means that production entails much transportation of raw material and products in various stages of completion. The costs of transportation can be minimized by careful planning.

Storage is another type of secondary activity to manufacturing that brings about costs. Most products are made in several stages which are carried out in different places with various machines, the capacities of which per hour differ. It thus cannot be avoided to have some buffer storage between the different phases of production. It can also be invaluable when a machine must temporarily be halted, and besides you cannot count on that the sales always continue at a constant tempo.

The science of logistics can help in planning the production process and avoiding unnecessary cost of transportation and storage. Theoretical tools for this task are algorithms and computer programs.

Ecology of production

Ecology of production studies the flows of materials that result from making, using - and perhaps also discarding - various products and develops methods for minimizing the negative effects to the environment, such as the use of materials, pollution and production of waste. In manufacture there are many possibilities to diminish the use of raw materials and toxic processes. In doing so, you should also keep in mind the environmental effects during the product's use and final discarding, such as can be seen in the diagram below.

Ecology of Manufacture

The ecological theory of manufacturing is also discussed on another page, under the title Ecology of Manufacture.

Occupational safety and health

In the study of ergonomics or "human factors engineering" the following straining and risk factors of work are discussed:

The theory of occupational health and safety includes allowable limits for all the above-mentioned factors, as well as the methods for measuring them and their harmful effects. All industrial plants in developed countries are subject to periodical control of these topics.

Motivation and psychology of work

Many of the targets of production that have been enumerated above, are normally set by the management without discussing them neither with the employees nor with their delegates such as shop stewards. The result often is that many employees fail to understand why a target - which can be arduous to achieve - is important for the company, their motivation to work diminish, and they perhaps consider leaving their jobs. Lately several researchers have tried to find out what topics really are important for the employees.

Frederick Herzberg et al. found (1959) that human motivation factors fall into two groups: "dissatisfiers", and "satisfiers". These are not simply opposites, but rather like sensations in the same way as pain and pleasure. The strongest satisfying factors, or motivators, all had to do directly with the person's particular job:

Potentially negative factors in motivation are:

The manager should see to it that these do not annoy the worker, but even when they are arranged ideally they alone cannot motivate the worker. That is why Herzberg did not call them "motivators" but maintenance factors or hygiene factors.

On the basis of the theory by Herzberg et al., hundreds of surveys have been conducted at various work places. M. Scott Myers interviewed 282 workers at a Texas Instruments plant, concluding that the classification proposed by Herzberg was valid there as well. On the right in the picture below, you will find the percentages of various motivation factors. It can be seen that some factors are almost exclusively positive, whereas others are negative, and some are both. It was also found that workers could to a certain extent be divided into two groups: those to whom it was more important to receive plenty of positive motivation, and others to whom avoiding negative motivation factors was more important (motivation seekers vs. maintenance seekers).

Motivation factors

Research of motivation, or "human factors" of work has since continued until our day, and on the basis of its findings many improvements have been made in the conditions of work. Nevertheless, the satisfaction of employees has not generally increased. The reason perhaps is that the expectations of employees have ascended simultaneously.

Theory of autonomous groups

Many people have today great confidence on science, and when encountering a problem they often think that the best method is starting a project and hiring a competent researcher. However, there is still an alternative method, albeit ancient, where the existing team itself takes care of its working methods and updates them so that problems never spring up or, when they do, they are taken care of and removed. Such an autonomous team itself detects the sprouting problem, works out a remedy for it and modifies accordingly the working routines of the team. When the team belongs to a larger organization, great changes in its operation must first be accepted by the management and those other departments that are involved, of course.

Often cited advantages of autonomous activity are:

The theory and practice of autonomous groups was first developed by Kurt Lewin (1890-1947). They are especially useful in the case that a permanent team of an organization has encountered so difficult problems in their daily work that the team or its leader cannot solve them. A suitable method in this case is Action Research, the theory of which is explained in the paragraph Action Research and Theory.

Action research can be seen as medicine for an accidental illness of team work, but smaller doses of the same medicine can be used for preventing a future illness in the normal daily work of a team. This would mean regular joint discussions which guarantee that every member of the team really understands the collective purpose of the work and is willing, for its benefit, to modify his or her own activity when needed. Principles for such collective discussions can be found under the title "Democratic Debate".

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August 3, 2007.
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