Organisation of production process and its role in the development of the economy

Production organization, or the organization of production, is at the heart of businesses involving the manufacturing process of goods. According to the American economist pioneer Richard Ely in his book, "Elementary Principles of Economics," the concept of production organization is applicable in modern economics in a number of ways. As the term suggests, production organization is simply the manner in which you organize the process of production of goods or services in your business. It is through production organization that you are able to effectively coordinate the factors of production, which include raw materials, labor and capital. Consequently, you will derive significant benefits from the organization of the production process. Household economy is the simplest form of production organization consisting of land, labor and capital, that is in ownership and control by the same person. You can engage in this level of production organization, for example, by organizing your family to provide labor and technical advice to produce agricultural products to provide food for the household. Production of goods and provision of services at community level leads to the elevation of production organization by creation of other concepts such as division of labor and specialization. Evolution

The advancement of production organization as an economic concept has led to various improvements in factors of production such as labor and capital as a result of globalization. The global demand for labor has, for example, brought about mass employment, leading to the creation of industries such human resource management. This has been useful to production firms because the department enables employees to understand the needs of the company and facilitate improvements in production by motivation through better pay packages and providing better working conditions.

Benefits

The single most important benefit of production organization to your business is efficiency. Production organization is essentially planning every step of the production process to maximize on the available resources, to lower production costs and to minimize loss. When you organize the production process, you are able to keep track of the inventory so it is neither too low nor too high. Production organization also helps you to identify which production processes such as labor or technology need adjustments to enhance efficiency.

Challenges

Production organization is capable of affecting your company’s production process in numerous ways owing to factors such as specialization. For example, a decline on the number of research farms offering high quality seed materials can affect farmers’ ability to produce sufficient food and cash crops. This can affect a community’s ability to access food at affordable prices and result in an increase in wage bill thus, affecting production costs.

Production forces and production relations

According to this idea of Marxism-Leninism, the productive forces are the driving force of world history. In increasing magnitude, the mechanical means of production are supposed to contradict the mode of production and thus in the end forcefully bring about socialism as a solution to this contradiction.

Now, one may comprehend capitalism as a contradiction between forces and relations of production: private property monopolizes the social forces of production in the form of cooperation, natural science and technology. But what comes of this is just the accumulation of capital, which clamps on the increasing scale of social labor for its expansion. And this is the outright opposite of a breakdown of the capitalist mode of production, as should supposedly follow from the conflict between forces and relations of production.

The mistake of the whole idea is that a means of production is said to determine a purpose of production. Just as if, with a strongly developed machinery, socialism were a naturally and quasi-automatically self-adjusting mode of production, but in the case of substandard means of production, capitalism or feudalism match perfectly. Nothing at all directly follows from the steam engine or the microchip – what purposes those involved want to apply or don’t want to put up with any longer is the whole reason for the establishment or overthrow of a mode of economics.