Importance & Functions of Production Management (2024)

1. What is production management?
2. Origins and development
3. Functions of production management
4. Importance of production management

What is production management?

Production management refers to the process of managing the activities of a business to furnish desired outputs of products and services. It involves planning, executing, and directing operations to convert raw materials into finished goods and services. Therefore, we can say that product management is concerned with (a) procuring resources in the form of management inputs, raw materials, labour, capital, equipment, and so on in (b) order to develop or produce finished products. The entire process between these two checkpoints is what we essentially refer to as production management. The supervision and execution of the process that transforms materials into products is called ‘production management.’

Origins and development

Production management uses a wide range of functions and responsibilities to attain its goal. The simple process of erstwhile years had to expand in order to accommodate the growing changes and expansion in production organisations that became more complicated over the years as we transitioned from simple one-person shops to multinational companies and factories. With new concepts like scheduling, process management, quality control, and maintenance of machines entering the picture, a detailed plan and execution became necessary. Certain skills and strategies became important for activities to be carried out in organisations. With automation, the landscape of factory systems changed, and so did production management which has continually developed to cover more and more areas and domains

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Functions of production mangement

Production management attempts to utilize 6M’s: Men, Machines, Money, Methods, Materials, and Market in order to better serve consumer needs. Its fundamental goal is to produce products and services in the right quantity, quality, on a schedule, and for optimum money. Production management makes it simple to adopt various technologies and innovative changes in the workplace. Production management is in charge of supervising and controlling all employees involved in the company’s production processes in order to ensure that the target output is achieved.

Let’s discuss the functions of production management.

1. Selection of product and design

Production management helps the organisation select the right product for production and also choose a relevant design for the product. This becomes imperative for the survival of organisations to possess a good understanding of their consumers in order to create products that fully satisfy needs. Products need to go through a detailed evaluation in order to meet customer needs while also remaining cost-efficient.

2. Production planning and control

Choosing the correct production processes for a particular product also becomes important. Decisions must be taken in order to choose the correct type of machines and technology, the capital investment required, and so on. It entails planning prior to production. Decisions like the quantity of production, the flow of processes, and so on are all planned out. Routing is the term used for charting out the sequence of operations for a smooth workflow.

Production control is overseen by the production manager. The actual process is compared and contrasted with the blueprint in place so that all necessary diversions from th original plan can be mapped out and any loopholes in the original plan can be spotted and corrected.

Scheduling is done to set up benchmarks as to when starting and when to complete a particular production activity. Inventory and cost control also need to be taken care of. The allocation of materials, labour, and other processes is called the production schedule.

3. Machine maintenance and replacement

Production management takes care of the maintenance and replacement of machines and equipment to ensure the efficient and smooth working of production processes. This is taken care of by the production manager and the team to prevent speed breaks and halts in production.

Importance of production management

1. Efficent use of capital and resources

Production management minimizes the cost of production and enhances the use of resources to the fullest. A concise blueprint enables proper use of resources and time, minimising disparity between production process and output. Evaluation of production processes and maintenance downtime will ensure processes can be managed efficiently optimising workforce efficiency. A well-thought-out production function will result in high-quality products, a faster rate of production, and a lower cost per unit.

2. Competitive edge

Production management can be a great tool for organisations facing competition in the market. A smoother flow of processes increases efficiency whilst also allowing the company to provide quality products and services. Production management techniques play a role in the effective innovation of new products and facilitate research in developing new and quality products. It can aid organisations in emerging as market leaders since less time spent for production processes means more resources to spare for other domains that may need more attention.

3. Minimizes risk of product failures

Preparing a lucid roadmap and collating information and assumptions helps assess the market and reduce chances of failure. Knowing the requirements and needs of the market will help reduce the chance that a product will flop. Ultimately, product management, like everything else, cannot guarantee success, but it does reduce it.