Production Management


Production activities are the key activities carried out by every organization. These activities determine the profitability and even influence the continuity of business. The organization makes distinct efforts from time to time for minimizing its cost of operations and maintaining an optimum efficiency rate. Proper management and supervision of all production operations are a must for attaining desired goals. Such management is termed as production management.
But what exactly is the term ‘production management’ and in what way it regulates the functioning of the business.

Let’s understand it in simple terms via the well-summarized article below:-

What is Production Management

Production management refers to the management of the production function of a business for increasing overall productivity. It is a function that regulates all production activities with the aim to minimize cost, reducing production time, and producing goods of the right quality. Production management involves formulating strategic production policies and successfully implementing them for yielding desired output without any wastage of resources.

Concept of Production Management

Production Management is a process that involves managing and controlling the production activities of a business. It involves the application of management principles to the production function of the business to increase productivity. Production management applies planning, directing, organizing, and controlling for managing production operations. This process is concerned with the conversion of raw materials into business finished products efficiently without any wastage of resources.

Production management involves the framing of various production strategies and ensures the successful implementation of these strategies in business operations. These strategies are formed and implemented by production management for the achievement of different pre-set goals in terms of unit costs, quality, production mix, and capacity of production.

Production management aims at proper integration and utilization of 6M’s: Men, Machine, Money, Methods, Materials, and Market to satisfy the customer needs in a better way. Its main objective is to manufacture products and services in the right quantity, of the right quality, at the right time, and at a lower cost. Various technological and innovation changes are easily implemented in business using Production management. Production management supervises and controls all persons associated with the production operations of the business and ensures the desired output.

Following are the chapters of Production Management

Nature of Production Management

  • Production management leads to value addition by conversion of raw materials into right products.
  • Product management is component of general management which assist them in their roles. 
  • Production management is an inter-disciplinary approach using concepts of several subjects.
  • Production management is operative function dealing with day-to-day activities.
  • Production management also manages the activities of services sector.
  • Production management is treated as both art and science.
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Nature of Production Management
Nature of Production Management

Scope of a Production Management

  • Production management enables business in placing its production facilities at right location.
  • Production management properly arranges production facilities and handles materials.
  • Product management designs product as per the market requirements.
  • Production management establish quality standards for practicing quality control.
  • Production management designs production processes in right way for deriving better efficiency.
  • Production management identifies deviations in management and takes corrective steps. 
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Scope of Production Management
Scope of Production Management

Characteristics of a Production Management

  • Production management plays an efficient role in achievement of organizational goals by regulating all production activities.
  • Production management raises the overall profitability of business by bringing down the production cost and deriving better results.
  • Production management boosts the overall economy of nation by facilitating optimum utilization of all resources available. 
  • Production management strengthens the market position of business by regulating the quality level of its products and services.
  • Production management improve the motivational level of workers by timely handling all of their queries and conflicts through management team.
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Objectives of a Production Management

  • Production management leads to right production level by formulating and implementing right production strategies.
  • Production management ensures production of right quality by establishing quality standards for production process.
  • Production management reduces the production and supply cost of goods by creating proper budgets.
  • Production management minimizes time of production by designing and following schedule for each production activity.
  • Production management study market situations and collects key information for formulating effective production strategies.
  • Production management aims at efficient utilization of resources via issuing rules and regulations for all operations.
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Objectives of Production Management
Objectives of Production Management

Importance of a Production Management

  • Production management minimizes the production expenses by regulating all activities and maintaining optimum efficiency.
  • Production management assists business in facing the stiff competition by providing quality products at right prices.
  • Production management supports organization in bringing innovative products by facilitating research and development activities. 
  • Production management enable firms in expanding their size of operations via earning better profit margins.
  • Production management ensures utilization of resources to maximum possible level by supervising all production processes.
  • Production management support business in meeting its goals via serving the customers efficiently.
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Importance of Production Management
Importance of Production Management

Types of a Production Management

  • Intermittent Production system is with irregular start and stop intervals manufacturing goods on small scale. 
  • Continuous Production system involves regular start and stop intervals and producing goods on large scale.
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Types Production Management
Types Production Management

Functions of a Production Management

  • Production management choose and design product appropriately by doing analysis of customer needs.
  • Production management places production facilities at proper locations resulting in smooth functioning.
  • Production management plans and controls all production by keeping every production activity under its eye. 
  • Production management enhances the reputation of business via providing better customer service.
  • Production management works towards maintaince and replacement of machines by doing their timely inspection.
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Functions of Production Management
Functions of Production Management

Steps in New Product Development Process

  • Initially new product ideas are generated by conducting a systematic research.
  • Distinct ideas of product are screened for choosing the most appropriate one.
  • Product concept is developed through product ideas and tested.
  • Product idea and concept is examined from business point to judge their profitability.
  • Finally, the product is developed and ready for distribution.
  • Test marketing is done where products are launched in market for evaluation motive.
  • Once product gets passed in test market then it is commercialized on wide scale.
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Importance of a Product

  • Product is a key component of promotion mix.
  • Product initiates all market operations.
  • Product is a key to market success for every business.
  • Product is a powerful competitive weapon.
  • Products yields several benefits to society.
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