The nature of the industrial enterprise

This chapter presents basic information about the nature and essence of the enterprise. The first subchapter shows both the well-known and less popular definitions of an enterprise and an industrial enterprise. They have been shown through the prism of various approaches, including definitions from various countries. The second part discusses the features of an industrial enterprise, with particular emphasis on: organizational separateness, economic separateness, legal separateness (legal personality), territorial separateness and technical and production separateness. The next part focuses on the goals and tasks of an industrial enterprise, with particular emphasis on the way they are formulated. Both strategic, tactical and operational goals were discussed. The subject of the considerations in the fourth part were the functions of an industrial enterprise, including a detailed description of the production, technical, organizational and personnel functions. The division of enterprises according to various criteria is presented in the next section. It focuses on such criteria as business profile, the size of the enterprise, form of ownership, production type, type of production process and market legal form. The last part discusses the market on which an industrial enterprise operates. Its features were presented, as well as the type of industrial products, types of customers and differences between industrial and consumer marketing. Particular attention was also paid to OEM (Original Equipment Manufacturer) and MRO (Maintenance Repair and Overhaul).

Traditional methods used in operational activities

The purpose of this chapter is to present the traditional methods used in operational man-agement. The methods described include benchmarking, outsourcing, Just-In-Time, kaizen, Total Quality Management, MRP I, MRP II, and core competencies developed in various periods of the 20th century to improve the planning process and efficient management of the flow of resources, goods and information. Benchmarking consists of comparing the processes and practices used by one’s own enterprise with those used in enterprises considered to be the best in the analysed field. Outsourcing means separating from the organizational structure of the enterprise some functions performed by them independently and transferring them to other entities for execution. Just-In-Time is used to reduce work in progress and inventory levels in production and warehouse processes. Kaizen and TQM are based on the continuous diagnosis and improvement of all elements of the company. MRP methods are based on computer systems and clearly defined, inter alia, the volume of demand, order fulfilment time and provide other data relevant to the company’s logistics system and its operations. Core competencies are company-specific skills that are difficult to copy or win over to competitors. The authors focused primarily on the presentation of the main goals, principles of operation, as well as the advantages and disadvantages of the selected methods in operational management.

Problems of sustainable development and challenges related to production

Due to the changes taking place in the environment of enterprises, many problems arise in their strategic and operational activities. The basis of the emerging problems is primarily the overproduction associated with short product life cycles. It contributes to the excessive use of various types of natural resources, often in a predatory manner. On the one hand, such an approach increases waste, and on the other, contributes to the destructive degradation of the environment. The result is a lack of food and water in some countries, climate change and related extreme weather phenomena, as well as various types of disasters, such as pandemics, fires, floods, droughts, etc. Water, air and land pollution as well as global warming are reflected in deteriorating quality of life. Despite many threats, more and more enterprises perceive the danger and undertake various types of adaptive projects. It should also be emphasized that the environmental awareness of both micro-enterprises and large corporations is growing. The purpose of this chapter is to introduce the reader to the basic problems that companies may encounter in their operations activity. First, changes in the environment are discussed, with particular emphasis on the depletion of natural resources, pollution of a destructive nature, as well as waste and its causes. The next part deals with the topic of globalization, pointing to both positive and negative aspects. Technical progress and related aspects such as new technologies, new processes and materials are discussed in the next part. In this part, particular attention is paid to improving productivity, thanks to the implementation of new technical solutions. Technical progress is directly related to the innovations presented in the next section. This section describes the types of innovation according to various criteria as well as factors that are conducive to increments in the level of innovation in the enterprise. The last part is devoted to the most important factor in operational activity—human esources. Competences, qualifications and the importance of human resources in the production process were discussed.

Modern methods used in production-operations management

Climate change, resource depletion, technical progress, growing consumer awareness and changing requirements causes companies to look for new production methods. They may concern various areas of the company’s activity, starting from product design, procurement organization, optimization of production processes, control of manufactured products and services, through improvement of work organization and reduction of production costs, and ending with the implementation of modern solutions based on digital technologies. The purpose of implementing new production methods is to improve labour mobility, optimization of the use of raw materials and resources, costs reduction, increase efficiency, productivity, etc. In the literature, there are many different types of methods that can be used by modern enterprises. It is practically impossible to present all methods in this study. The authors focused on the presentation of selected methods, which are characterized on the one hand by innovation and, on the other hand, by the possibility of implementation. Particular attention should be paid to methods focused on environmental aspects. This group presents basic information on environment-conscious manufacturing (ECM), life-cycle assessment (LCA) and waste management and recycling. These methods allow to implement the concept of sustainable development and are directly related to the 17 goals set out in the 2030 Agenda for Sustainable Development and adopted by UN member states. In the group of methods related to next generation production management, the focus was on Matrix shop floor control and cooperative manufacturing. Of particular importance is cooperative management, because cooperation in practice is considered as a specific resource and one of the most important factors of a competitive position. The next group of methods concerned production planning and control. Drum Buffer Rope (DBR) and theory of constraints (TOC) were discussed as part of it. From the company’s point of view, methods related to manufacturing processes are very important, including group technology (GT) and cellular manufacturing (CM). Another group focused on commercial aspects, including demand chain management (DCM) and competitive intelligence (CI). The chapter also presents methods related to auxiliary software support, advanced organizational manufacturing and focused on product design. In the first case, Electronic Data Interchange (EDI) was discussed, in the second, virtual enterprises (VE) and World Class Manufacturing (WCM) were presented, and in the third, the assumptions concerning the Quality Function Deployment (QFD) and House of Quality (HOQ) method were shown. Additionally, Statistical Process Control (SPC) and Computer-Aided Process Planning (CAPP) are discussed within the framework of methods focused on cost and quality manufacturing.

Functions and roles in operations management

This chapter covers the main functions and roles of operational management. In particular, problems related to the organization of the production process, including its continuous improvement, were raised. In addition, the role of resource management in an enterprise was discussed along with tools for optimizing resource allocation. The issues related to purchasing management, its changing importance over the last years, tasks and methods of organization were also described. The concept of production capacity was explained, as well as the methods of analysing production processes aimed at maximizing efficiency. The importance of inter-organizational cooperation, both in static and dynamic terms, was also outlined, with particular emphasis on barriers and benefits.

The operational management evolution and its role in the industrial enterprise

The topic introduces within the field of operational management from the standpoint of its historical-evolutionary definition context. The essential aspects are clarified, and the levels of operational management are presented. The principles of operational management are formulated in a short, systematized form. The nature and types of production systems are clarified, as well as their main elements. Definitions regarding the production process, organization of the enterprise and its main subsystems, forms of organization of the production process, forms of arrangement of the production units in space are clarified, too. The recommended fields for identifying good practices in the organization of the production process are also defined. It has been presented the main links that need to be made in terms of good practices, derived in theoretical terms and their main contributions to the enterprise to achieve the desired results by applying the good practices.