What is Production Management and its Importance

What is Production Management System?

Production management means planning, organizing, directing and controlling of production activities of products or services, this whole process of managing production is called the Production Management System.

Production management helps the organization to convert raw material into finished goods in proper time.  Production management deals in decision making, so that result of goods and services can be achieved in a quantitative way. Production Management is a set of general principles for production.

Production Management Definition 

According to Elwood Spencer Buffa,

Production management deals with decision-making related to production processes so that the resulting goods or service is produced according to specification, in the amount and by the schedule demanded and at minimum cost.”

Scope of Production Management

  • Production Management is a vast concept it involves a huge chain of management.
  • Production management helps to find the Facilitated Location.
  • Production management creates plant layout that refers to the physical arrangement of facilities.
  • Production management creates Product design that deals with the conversion of the ideas.
  • Production management make sure the quality of goods or services.

Importance of Production Management in Business

  • Production management helps to Expansion of the Firm.
  • Production management helps Minimizes price of Production.
  • Production management improves Reputation, Goodwill and Image.
  • Production management maximise Optimum Utilization of Resources.
  • Production management helps to reach objectives of Business.

Characteristics of Production Management

  • To understand customer needs.
  • To measure organization financial performances.
  • To focuses on the Quality of goods or products
  • To make sure an effective Supply of chain management.
  • To measure the profits of goods or products.
  • To check Flexibility of work.

Principles of Production Management

  • To provide training to employees in order to improve their productivity.
  • To maintain equipment, that will help during the production of goods.
  • To Remember customer needs.
  • To Focus on the Data.
  • To Dedicate team to achieve goals.

Types of Production Management

Basically, there are three types of production management :

Unit or Job type of production

Job production means producing specific goods or products according to the demand of customer in large quantity.

Batch Production

In, Batch production manufacturer already knows the number of units he needs to a manufacturer in a batch.

 Mass Production 

Mass production means producing goods or products in departmental type. One department is responsible for a specipic work. other departments will responsible for other specific work.