BEDROCK OF OPERATIONS, SUPPLY CHAINS AND THE SOCIETY
DR. OLANIYI OPANUGA, FNIPM, CPOSCM, COPOM (c)
President/Chairman of Council
1.0 INTRODUCTION
Production marks the existence of the earth and the evolution of mankind. Production is vital to human lives.Indeed, everything in Creation because the world itself is nourished by production. You, the reader of this write-up are a typical output of production activities as well as a factor.
Generally speaking, production is not just a departmental function – it is what everybody does – you either produce goods or services or both. Just like its derivative-productivity, it is vital to the survival of individuals, organizations and Nations.
Production is the most powerful source of competitive advantage. This has been the secret behind sustainable wealth creation since the ancient times through medieval and from the western civilization till the present modern information age. The richest people are those who produce, especially innovation products. The leading most profitable organizations are those involved in production and the strongest economies are those that produce the largest with value added. That is what has been placing the United States ahead in the World since 1871. This paper examines the role of production in the world economic order. It aims to push to the front burner of professional discuss the importance of professional practice of Production Management.
Against the background of the seeming confusion in the meanings of Production Management, Operations Management and Supply Chain Management this paper seeks to explain the antecedents and attempts to harmonize them while making a strong case for professional Production Management in view of its indispensability in every organization and the society at large
2.0 WORLD PRODUCTION OUTLOOK
Donald Triumph, the newly elected Republican President of the United States of America seems to have started putting his threats into action that his Country, long considered the leading promoter of international trade liberalization, will be pursuing economic nationalism and protectionism.
America has seen its manufacturing industry decimated over the last 16 years under Bush and Obama Democrats Free Trade policies. This era witnessed the gradual decline of American influence as the largest manufacturing Country. China displaced her in 2010. United Nations report on the share of manufacturing as a percentage of the world’s GDP in 2014 indicated that China and Korea led with 28% and the United States merely trailed with 12% behind Russia (13%) Italy (14%) India (16%) Mexico (17%) Japan (18%) Germany (20%) and Indonesia (21%)
It is noteworthy that China’s winning streak is her aggressive government policy on production. The country successfully used Foreign Direct Investment (FDI) to develop manufacturing and export capacity.
With a population of 1.2 billion people the country has effectively used policy instruments to drive technology, renewable energy and poverty reduction while employment generation strategies were put in place right from the 1980s.
We live in a world of interdependence as no Country can produce all that she needs. However, international competition compels countries to focus on their areas of comparative advantage. They export what they are best at producing and import what they lack. An import dependent or a predominantly consuming Country will always be bedevilled by economic problems such as unemployment, high inflation, falling GDP, high cost of living and low currency value while producing and export oriented countries will experience rapid economic growth and development. Increased production activities have ripple effects. Therefore, one main means of making a country to grow and develop is to promote production and productivity.
Nigeria as a case in point is one country that has failed to diversify her economic base. Even with the mono – product penchant she wasted the huge foreign exchange earnings from oil over the years under successive inept governments and vision-less and corrupt political leadership who also suffer from ethical inetia. Nigeria nilly willy promotes the growth of other Nations and helped provide jobs for their citizens while their own children are roaming the streets jobless due to her ever insatiable want of imported goods.
It got so bad that we started importing what we have such as refined petroleum products and exporting what we don’t have like wood products. Our refineries became moribund and our forests are left with scanty trees. Our infra-structural base especially the road networks and the rail system? Zero! Capacity under – utilization of factories became vogue and business failures rampant. Start-ups became a nightmare. But there seems to be respite in sight. Enter, Buhari Administration.
3.0 NIGERIAN’S PRODUCTION
OUTLOOK: 2017 IN PERSPECTIVE
Hopefully, the decline in production index, in Nigeria especially that of agriculture, mining and manufacturing can be reversed by Government Policy.
I read the text of 2017 budget speech delivered by President Muhammadu Buhari at the joint session of the National Assembly on December 4, 2016. The title of the budget is “budget of Recovery and Growth. As it implies, the policy strategy thrust is to get Nigeria out of recession and back on the path of growth.
From the speech one can deduce that this Government knows the importance of production and how its promotion can help to provide solutions to most of our problems as a Nation. Some of the intents of Government in the budget are; –
* Promotion of local content in Ministries, Departments and Agencies of Government
* Facilitation of Agricultural Value Chain
* Looking into the needs of production people like the farmers, small and medium sized manufacturers, Agro – Allied business, technology start-ups etc. as the true drivers of the Nation’s economic future.
* Promotion of import substitution
* Reviving public sector production facilities such as the
refineries and the Nigerian fertilizer blending plants.
Going forward, the Government should deal with certain problems frontally, especially infrastructure i.e. power, rail and road networks as well as providing a conducive atmosphere for production to thrive as a way of creating jobs, reducing poverty and discouraging over-reliance on foreign exchange.
I want to see greater capacity utilization in the manufacturing sector and increased direct foreign investment (DFI) in Nigeria this year.
4.0 WHO ARE THE PRODUCTION MANAGERS?
Production Managers are not just the people designated as such in organizations. They include CEOs, Directors, General Managers, Controllers, Head of Departments, Managers and Executives of organizations that transform inputs into outputs. You are a Production Manager if you are involved in manufacturing, agriculture, construction, energy, mining and solid minerals development as well as provision of services. Production creates value and the management of production makes value creation profitable and sustainable.
Getting the best from people, time, materials, machines, systems, technology and processes is what Production Management about.
You are a Production Manager if you are involved in planning, supplies, operations, engineering services, safety and quality. Therefore, all industries require people with production management knowledge, skills and behavioural competencies to run efficiently and effectively. Production is the heart of all industries. When production stops that is the end. When production is not professionally managed you will have mediocre performance reflected in different setbacks such as low productivity, high waste level, quality and safety lapses, capacity under utilization, high cost of operations and uncompetitivenes.
Therefore, Production Management is structured in a pecking order:
The Top Production Management who formulate policies and make strategic decisions; the CEOs, Production Directors, Production Controllers and General Managers (Production/ Operations/Supply Chain) etc.
Senior Production Management who interprets and implement policies
Middle Production Management who implements tactical decisions
Lower Production Management:
Supervisors, foremen, headmen, etc; who get results through
the factory rank and file on a day-to-day basis.
5.0 PRODUCTION, OPERATIONS AND SUPPLY CHAIN
The Nigerian Institute of Production Management (NIPM)) is concerned with the practice of Production, Operations and Supply Chain Management.
Production Management is the bedrock of Operations Management and Supply Chain Management. Historically, industrial production came into being following the industrial revolution in the mid-18th century. The production area was known as machine shop or shop floor. In the factory there were machine operators, headmen, charge-hands and foremen and the supervisors were the ‘managers’ who received materials, organised work stations, hired labour, planned and scheduled work, co-ordinated outputs, ensured storage, proper safety, quality and maintenance matters and report to the business owner on his/her superintendent representative. Complexities of production brought about the employment` of production managers called by different titles.
