Determining the Production Process

The production is part of a company's management concept in addition to the financial, marketing and human resources. in this section, responsible for creating products that will be sold by the company by the marketing division. In creating its products, the production in collaboration with the field of marketing to get information about what products are in demand by the market. Because, in the concept of a company, one motto that is used instead of selling goods that can be produced. Instead, produksilah an item that can be sold to the market.

From research conducted by the marketing division, then the production will create a product. Surely this is after coordination with the finance department as a provider of budget and human resources division to get the workforce that has the competence.

In addition to making the items can be produced, the production division also has other roles. Such as calculating production capacity that can be generated, determine the inventory of raw materials, calculate the stock of goods in warehouses. In addition, the production division also plays a role in determining the distribution system in order to efficiently and effectively.

Determining the Production Process
In the determination of the production process, there are four things to be taken into consideration a company. Consideration is based on achieving cost efficiencies, so that production costs can be reduced and be able to produce optimum benefit.

The four things taken into consideration included the

1. Proximity to raw materials. If the production is done in areas close to areas that provide raw materials, will provide efficiency in two ways. The first is the raw material and freight costs both storage costs of raw materials.

2. Approaching the market. By choosing a production site close to the location of the targeted marketing of products, expected to be able to meet market needs quickly. So it will not happen in a vacuum inventory on the market.

3. Locations that have a source of cheap labor. As one of the factors of production, labor should be considered in calculating production costs. By selecting the production of human resources is still low, spending will push the cost of production. For example, when Sony chose Vietnam as their factory, because there salaries are lower than Indonesia.

Being in the middle. By selecting production sites located in the middle between the location of raw materials, markets and human resources it is hoped will create a production cost is quite light on the three components.