by Production Management refers to the application of management principles to the production function in a factory. In other words, production management involves application of planning, organizing, directing and controlling the production process.
Production management also deals with decision-making regarding the quality, quantity, cost, etc., of production. It applies management principles to production.
Production management is a part of business management. It is also called “Production Function.” Production management is slowly being replaced by operations management.
Objectives:
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 also tries to improve the efficiency. An efficient organisation can face competition effectively. Production management ensures full or optimum utilisation of available production capacity.
- Right Quantity
The manufacturing organisation should produce the products in right number. If they are produced in excess of demand the capital will block up in the form of inventory and if the quantity is produced in short of demand, leads to shortage of products.
- Right Quality
The quality of product is established based upon the customer’s needs. The right quality is not necessarily best quality. It is determined by the cost of the product and the technical characteristics as suited to the specific requirements.
- Right Manufacturing Cost
Manufacturing costs are established before the product is actually manufactured. Hence, all attempts should be made to produce the products at pre-established cost, so as to reduce the variation between actual and the standard (pre-established) cost.
- Right Time
Timeliness of delivery is one of the important parameter to judge the effectiveness of production department. So, the production department has to make the optimal utilisation of input resources to achieve its objective.
Function:
The activities of production department of an organisation are grouped into two broad categories:
- The activities that convert the available capital in to physical resources required for production
- The activities that convert the physical resources in to saleable goods and services.
In carrying out the above activities, the production department must perform the following activities:
- Production of goods at the right time and in sufficient quantity to meet the demand.
- Production of goods at minimum possible cost.
- Production of goods of acceptable quality.
Thus, the functions of production personnel are:
- Forecasting the demand for the products and using the forecast to determine the requirements of various factors of production.
- Arranging for the procurement of required factors of production.
- Arranging for the services such as maintenance, store keeping material handling, inspection and quality control etc. that would be required to attain the targeted level of production.
- Utilizing effectively the factors of production and service facilities available to produce the product.
Scope of Production Management:
The objectives of production management are aimed at satisfying the needs of the customers through offering organisations products/services. The scope of production management can be considered from the point of view of both strategic decisions influencing the production system and at the operation level. The strategic level decisions are mainly concerned with the design of product and production system. These decisions involve decisions, which have long terms implications.
