Production Management Best Practices for Indian Companies

Originally published at innovairasoftwares.com — AI automation & digital marketing insights for Indian businesses.

Production management is the difference between a factory running smoothly and your team firefighting every Monday morning. Yet most Indian SMBs treat it like an afterthought—spreadsheets, manual tracking, and someone's uncle managing inventory in their head. Top Indian companies do it differently. They've figured out that production management isn't just about keeping machines running; it's about cutting waste, meeting deadlines, and knowing exactly where your ₹50 lakh inventory sits at 3 PM on a Tuesday.

Quick Answer: Production management best practices for Indian companies include real-time inventory tracking, demand forecasting, preventive maintenance schedules, and digital workflow automation. Top performers cut production delays by 25–40% and reduce inventory costs by ₹2–5 lakh annually. Most Indian SMBs see ROI within 6–8 months after implementing these practices.

Why Production Management Matters for Indian Businesses

The Real Cost of Poor Production Management

You know what kills margins faster than GST audits? Poor production management. A textile exporter in Surat we worked with was losing ₹18,000 per week because production orders were queued manually. Machine downtime wasn't tracked. Raw materials arrived late because nobody knew when the previous batch would finish. That's not uncommon—it's the norm for 60% of Indian SMBs operating without proper production systems.

According to a McKinsey report, Indian manufacturers lose 12–18% of potential revenue annually due to production inefficiencies. That's not a typo. A ₹1 crore business is leaving ₹12–18 lakh on the table every year.

What's Different About Top Performers

The companies winning in your space—whether you're in auto parts, pharmaceuticals, textiles, or food processing—they share three things:

1. Real-time visibility — They know what's being made, where it is, and when it'll ship.
2. Predictable timelines — Customers don't get surprised with delays because production managers know capacity weeks in advance.
3. Lower waste — Scrap, rework, and inventory carrying costs are tracked obsessively.

These aren't fancy multinationals. We've worked with a Pune-based injection molding shop that went from 68% on-time delivery to 94% in 4 months. A Bangalore electronics assembler cut material waste from 8.2% to 3.1%. Both used the same playbook you'll learn here.

What Production Management Actually Is (and Why Your Current System Fails)

The Definition That Actually Matters

Production management is the coordination of all activities required to transform raw materials into finished goods—on time, on budget, and without chaos. That includes planning, scheduling, quality control, inventory management, and maintenance.

In simpler terms: it's the system that answers "When will order #4521 ship?" without your production manager having to walk around the factory asking people.

Why Spreadsheets and WhatsApp Groups Don't Scale

You're managing production through:

• Excel sheets updated manually (if at all)
• WhatsApp groups where critical messages get lost
• Tally for accounting, but not for real-time production tracking
• One person who knows everything and takes a week off, causing chaos

This works until you don't. Once you hit 50+ orders/month or multiple product lines, the system collapses. Deadlines slip. Inventory piles up. Customers complain. You're hiring more staff to manage the chaos instead of solving the chaos.

The companies doing this right? They've moved to systems where production data flows automatically—from order entry to shop floor to shipment. No manual re-entry. No guesswork.

How Top Indian Companies Manage Production Differently

1. Real-Time Production Tracking (Not Weekly Reports)

Top performers track production live, not in retrospect.

A Hyderabad pharmaceutical manufacturer we consulted was running 12-hour production cycles. They had no idea if a batch was on track until the shift ended. We helped them implement a simple digital tracking system: each workstation logs completion time, material used, and quality checks as they happen. Now the production manager sees bottlenecks in real time, not 24 hours later.

Result? They reduced average batch turnaround from 14 days to 9.5 days. That's 4.5 extra days of capacity per batch—worth ₹3.2 lakh/month in additional throughput.

2. Demand Forecasting Based on Historical Data

Manual forecasting is guessing. Data-driven forecasting is planning.

A Jaipur-based garment exporter was ordering raw materials based on "what the sales guy thinks we'll sell." Predictable outcome: either stockouts or excess inventory. We analyzed their 24 months of order history and built a simple forecast model. Now they know:

• Peak demand months (August–October)
• Seasonal dips (May–June)
• Which products have stable demand vs. volatile demand

They reduced inventory carrying costs by ₹1.8 lakh/month and cut stockouts from 8% to 1.2%.

3. Preventive Maintenance Schedules (Not Crisis Mode)

Every hour a machine is down costs you money. Every unplanned breakdown costs you more.

Top companies don't wait for machines to fail. They track:

• Operating hours since last maintenance
• Temperature, vibration, or performance anomalies
• Maintenance history and patterns

A food processing unit in Nashik had a critical filling machine break down every 6–8 weeks, costing ₹40,000 per incident in lost production plus emergency repairs. After implementing a preventive maintenance schedule (oil change every 500 hours, bearing inspection every 1,000 hours), breakdowns dropped to once every 18 months. Annual savings: ₹2.6 lakh.

4. Batch and Queue Management

Orders don't flow randomly. They're grouped strategically.

Instead of switching between 5 different product setups per day (wasting 2 hours on changeovers), top companies batch similar orders together. One company making plastic components reduced changeover time from 90 minutes to 25 minutes by grouping orders by mold type. That freed up 6.5 hours per day—equivalent to hiring one more shift without hiring anyone.

5. Digital Workflow Automation for Approvals and Handoffs

Paper-based approvals kill speed. Digital workflows don't.

When a production order needs approval from QA, then warehouse, then shipping, and each step is a printed form or email chain, you're looking at 2–3 days of delay. Top companies automate this: order created → automatically routed to QA → upon QA approval, automatically routed to warehouse → upon warehouse confirmation, automatically triggers shipping label. Zero manual handoffs. Average cycle time: 4 hours instead of 2 days.

Our CRM Development service helps manufacturers build custom workflows that connect production, QA, inventory, and shipping into one system. Instead of data living in 4 different places, it flows automatically—cutting errors and delays by 60–70%.

Comparison Table: Production Management Approaches

Step-by-Step Guide: How to Implement Production Management Best Practices

Step 1: Map Your Current Production Flow (Week 1)

Don't automate chaos. First, understand it.

Walk through your production process end-to-end:

• How does an order enter your system?
• What happens between order and raw material procurement?
• How many handoffs before it reaches production?
• Who approves what?
• Where do delays typically happen?

Document this. Draw it on a whiteboard if needed. Most companies find 3–5 unnecessary steps or approvals that can be eliminated immediately. One food packaging manufacturer found they were asking for 3 different approvals for the same order. Removing 2 redundant approvals saved 6 hours per order.

Step 2: Establish Key Performance Indicators (Week 2)

You can't improve what you don't measure.

Start tracking:

• On-time delivery rate — % of orders shipped by promised date (target: 90%+)
• Production cycle time — Days from order to shipment (baseline this first)
• Inventory turnover — How many times inventory is sold/replaced per year (higher is better)
• Machine uptime — % of time production equipment is operational (target: 85%+)
• Defect rate — % of units failing QC (track by product line)
• Lead time variability — Standard deviation of production cycle time (lower is better)

Track these weekly. You'll spot trends within 3–4 weeks.

Step 3: Implement Real-Time Production Tracking (Week 3–4)

This is where visibility starts.

Options:

• Simple: Shopfloor staff log completion time + material used in a shared Google Sheet or Tally (free to low-cost)
• Better: Use a basic ERP module or production management tool (₹50,000–1,50,000 one-time, ₹5,000–15,000/month)
• Best: Custom system integrated with your existing systems (₹2,00,000–5,00,000, but connects everything)

Start simple. Get the habit of logging data in real-time first. Once that's consistent, upgrade the tool.

Step 4: Set Up Preventive Maintenance Schedules (Week 4–5)

Stop waiting for breakdowns.

For each critical machine:

• Document manufacturer's recommended maintenance intervals
• Track operating hours (use a simple counter or IoT sensor)
• Create a calendar reminder system (even Google Calendar works)
• Log every maintenance activity (date, hours, what was done, cost)

Assign one person ownership. In a month, you'll have baseline data. In 3 months, you'll see patterns. After 6 months, you can predict maintenance needs with 80%+ accuracy.

Step 5: Implement Batch Scheduling (Week 6–7)

Don't switch between 10 different setups per day.

Analyze your past 60 days of orders:

• Group similar products (same mold, same material, same process)
• Calculate changeover time between groups
• Resequence orders to minimize changeovers

A typical result: reducing changeover time from 90 minutes/day to 25 minutes/day = 1 extra hour of productive capacity daily = 5 hours/week = 250 hours/year. For a shop with ₹50/hour labor cost, that's ₹12,500 annual savings in labor alone. Equipment utilization gains are usually 2–3x higher.

Step 6: Automate Approvals and Handoffs (Week 8+)

Once tracking is solid, automate the flow.

Create a simple workflow:

1. Order created → automatically checks inventory
2. If inventory available → auto-approves and routes to production
3. Upon production completion → auto-routes to QA
4. Upon QA pass → auto-routes to warehouse
5. Upon warehouse pickup → auto-triggers invoice and shipping label

Even a basic tool like Zapier can do this for ₹500–2,000/month. Or work with a developer to build it into your existing system.

Common Mistakes to Avoid

Mistake 1: Automating Before Understanding Current Flow

Companies buy fancy ERP systems before they've documented what they're actually doing. Result: the system doesn't fit, adoption fails, and they're back to spreadsheets in 6 months.

Fix: Map your process first. Then automate it.

Mistake 2: Setting Targets Without Baseline Data

"We want 95% on-time delivery." Great. But you're currently at 68%. How will you get there?

Without understanding why you're at 68%, you can't close the gap. Track the root causes for 30 days first. Most common: demand forecasting is wrong (leading to material shortages), or production scheduling doesn't account for changeover time.

Fix: Establish baseline metrics first. Then set targets 10–15% better than baseline, not 30% better.

Mistake 3: Ignoring Inventory Carrying Costs

"We'll just keep extra stock to avoid stockouts."

That extra stock costs you money: storage space, insurance, obsolescence risk, working capital tied up. A Bangalore electronics company was keeping 3 months of inventory "just in case." Carrying cost: ₹8.5 lakh/month. After implementing demand forecasting, they reduced inventory to 1.5 months. Freed up ₹4.2 lakh/month in cash flow.

Fix: Calculate your actual inventory carrying cost (typically 20–30% of inventory value annually). Then optimize.

Mistake 4: Not Involving the Shopfloor

Production managers design a beautiful system. Shopfloor staff don't use it because it's not practical.

Fix: Involve your shopfloor team in design. Ask them where delays happen, what information they need, what's actually feasible.

Mistake 5: Treating Production Management as a One-Time Project

"We implemented a system. Now we're done."

Production management is continuous. Markets change. Seasonality shifts. Machines wear differently. You need monthly reviews of your KPIs and quarterly process improvements.

Fix: Assign one person as production manager (not as an add-on to their other duties). Dedicate 2 hours/week to reviewing data and identifying improvements.

Key Takeaways

• Production management is the system that coordinates planning, scheduling, inventory, and maintenance—not just keeping machines running.
• Real-time tracking beats weekly reports — you catch delays hours before they become problems, not days after.
• Preventive maintenance saves 60–70% of breakdown costs — an hour of planned maintenance prevents 10 hours of emergency downtime.
• Batch scheduling and demand forecasting cut production cycle time by 25–40% and free up 5–10 hours of capacity weekly.
• Digital workflows eliminate 2–3 days of approval delays and reduce manual data entry by 70%.
• Most Indian SMBs see ROI within 6–8 months after implementing these practices—typically ₹1.5–4 lakh annual savings for a ₹1 crore business.
• Start simple — map your process, track KPIs, implement real-time logging. Upgrade tools once the discipline is in place.

Frequently Asked Questions

Q: How much should we budget to implement a proper production management system like the top companies do?
Most Indian SMBs spend ₹2-5 lakhs for basic ERP setup (software + initial training), but this varies by production complexity. If you're doing custom implementation with consultants, expect ₹8-15 lakhs for 6-12 months, though companies like Bajaj Auto and TVS have already absorbed these costs years ago—they now spend ₹50-100 lakhs annually just on optimization. Start with inventory tracking software (₹15,000-40,000/month) before jumping to full ERP.

Q: How long does it actually take to see measurable improvements in production efficiency after implementing best practices?
You'll notice 8-12% waste reduction in the first 60 days if you focus on just shop floor standardization, but real gains (25-35% productivity boost) take 6-9 months of consistent execution. Hero MotoCorp documented that their Kaizen implementation showed 15% efficiency gains within 90 days, then plateaued until they reinforced operator training at month 4—this is the typical pattern for Indian manufacturers.

Q: Is implementing production management best practices worth it for a small 50-person manufacturing unit, or is it only for large companies?
Absolutely yes—in fact, small units see faster ROI because you have less organizational inertia. A 50-person unit implementing 5S and basic kanban typically recovers ₹3-8 lakhs in working capital within 4-5 months, while large companies take 18+ months to see the same percentage gains. The mistake is thinking you need expensive software; companies like Surat's textile mills have cut inventory by 30% using just visual management boards and WhatsApp-based production tracking.

Q: We've heard that production management is mainly about buying expensive machines and equipment—is that actually true?
No, this is the biggest misconception costing Indian SMBs money. Top performers like Lumax Industries achieve 40% efficiency gains through process redesign, not capex—they reorganized their shop floor layout (cost ₹2-3 lakhs) and implemented standard work procedures before touching machines. Most Indian manufacturers waste 20-30% of capacity through poor scheduling and inventory management, which costs nothing to fix except discipline and training (₹50,000-1 lakh).

Q: What's the simplest first step we should take this month if we want to start moving toward best-practice production management?
Start with a 3-day shop floor audit: map your current process, identify where materials wait longest (usually 60-70% of cycle time), and implement visual controls (shadow boards, color-coded bins, simple charts on walls—₹5,000-15,000 investment). Companies like Bharat Petroleum's manufacturing units began here before rolling out formal systems; this gives you baseline data to show your team why change matters, and you'll catch low-hanging fruit worth ₹1-2 lakhs in immediate savings.