Production Management; means planning, organizing, directing and controlling of production

activities. Also, in other words, P.M. involves an application of planning, organizing, directing and
controlling the production process. P.M. deals with converting raw materials into finished goods or
products. It brings together the 6M’s i.e. men, money, machines, materials, methods, and markets to
satisfy the wants of the people. 
Production management also deals with decision-making regarding the quality, quantity, cost, etc., of
production. It applies management principles to production. Production management’s a part of
business management. It is also called “Production Function.” Production management is slowly
being replaced by operations management. The main objective of production management is to
produce goods and services of the right quality, right quantity, at the right time and at minimum cost.
It is also trying to improve efficiency. An efficient organization can face competition effectively. P.M.
ensures full or optimum utilization of available production capacity.
Production is the creation of goods and services. It is concerned with transforming the inputs in the
form of raw materials, labour, machines, men and money into. output i.e. goods and services with the
help of certain processes production

The main activities of production management is as under-----

1. Specification and procurement of input resources namely management, material, and land, labour,
equipment, and capital.

2 .Product design and development to determine the production process for transforming. The input
factors into the output of goods and services.

3. Supervision and control of the transformation process for the efficient production of goods and
services.

The production function is the most important function in an organization around. Which other
activities of an enterprise (viz., marketing, financing, purchasing, and personnel, etc.) revolve. It is
pertinent to note that production function should manage in an efficient and effective manner for the
achievement of the organizational goals.

Production and operation management is the science-combination of techniques and systems. That
guarantees the production of goods and services of the right quality, in the right quantities and at the
right time with the minimum cost within the shortest possible time. The essential features of a
production and operation function are to bring together people, machines, and materials to provide
goods and services for satisfying customer needs.
 ctives of Operations Management
 Customer Service: The primary objective of operations management, is to utilize the
resources of the organization, to create such products or services that satisfy the needs
of the consumers, by providing “right thing at the right price, place and time”.
 Resource Utilization: To make the best possible use of the organisation’s resources
to satisfy the wants of the consumers, is another important objective of the operations
management.
In operations management, the formation of goods or services encompasses
conversion of inputs into outputs, wherein different inputs such as capital, labour,
material, machinery and information are combined and used to create output, by
using the conversion process. For this purpose, the organization measures different
points in the process and then compares the same with the set standards, to
ascertain whether corrective action is required or not.

Scope of Operations Management

1. Location of Facilities: The most important decision with respect to the operations
management is the selection of location, a huge investment is made by the firm in acquiring
the building, arranging and installing plant and machinery. And if the location is not suitable,
then all of this investment will be called as a sheer wastage of money, time, and efforts.

So, while choosing the location for the operations, company’s expansion plans,
diversification plans, the supply of materials, weather conditions, transportation
facility and everything else which is essential in this regard should be taken into
consideration.

2. Product Design: Product design is all about an in-depth analysis of the customer’s
requirements and giving a proper shape to the idea, which thoroughly fulfils those
requirements. It is a complete process of identification of needs of the consumers to the final
creation of a product which involves designing and marketing, product development, and
introduction of the product to the market.
3. Process Design: It is the planning and decision making of the entire workflow for
transforming the raw material into finished goods, It involves decisions regarding the choice
of technology, process flow analysis, process selection, and so forth.
4. Plant Layout: As the name signifies, plant layout is the grouping and arrangement of
the personnel, machines, equipment, storage space, and other facilities, which are used in
the production process, to economically produce the desired output, both qualitywise and
quantitywise.
5. Material Handling: Material Handling is all about holding and treatment of material
within and outside the organisation. It is concerned with the movement of material from one
godown to another, from godown to machine and from one process to another, along with
the packing and storing of the product.
6. Material Management: The part of management which deals with the procurement,
use and control of the raw material, which is required during the process of production. Its
aim is to acquire, transport and store the material in such a way to minimize the related cost.
It tends to find out new sources of supply and develop a good relationship with the suppliers
to ensure an ongoing supply of material.
7. Quality Control: Quality Control is the systematic process of keeping an intended
level of quality in the goods and services, in which the organization deals. It attempts to
 prevent defects and make corrective actions (if they find any defects during the quality
control process), to ensure that the desired quality is maintained, at reasonable prices.
8. Maintenance Management: Machinery, tools and equipment play a crucial role in
the process of production. So, if they are not available at the time of need, due to any reason
like downtime or breakage etc. then the entire process will suffer.

Hence, it is the responsibility of the operations manager to keep the plant in good
condition, as well as keeping the machines and other equipment in the right state, so
that the firm can use them in their optimal capacity.

In operations management, the operations manager plays an effective role as a

decision maker, with respect to the decisions regarding – What resources are
needed and in what amounts? Where will the process take place? Who will perform
the work? When are the resources required? How will the products be designed and
developed?

Related Terms:

1. Supply Chain Management

2. Quality Assurance
3. Business Cost
4. Cost Reduction
5. Total Quality Management (TQM)

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Related Terms
 Entrepreneurship
 Six Sigma
 Strategic Planning
 Grand Strategies
 Total Quality Management (TQM)
 Joint Venture
 Controlling
 Enterprise Resource Planning (ERP)
 Formal Communication
 Cost Sheet
 Intellectual Property
 Process Analysis