Production Management

Production management is a process of planning, organizing, directing and controlling the activities of the production function in an organization.

The production management combines and transforms various resources used in the production subsystem of the organization into the value-added product in a controlled manner as per the policies and regulations of the organization.

E.S. Buffa defines production management as, “Production management deals with decision making related to production processes so that the resulting goods or services are produced according to specifications, in the amount and by the schedule demanded and out of minimum cost.”

Objectives of Production Management:

The objective of the production management is ‘to produce goods services of right quality and quantity at the right time and right manufacturing cost’.

1. Right Quality:
The quality of the product is established based on the customer needs in the market. The right quality is not necessarily the best quality of the product. It is determined by the cost of the product and the technical characteristics as suited to the specific requirements of the customers in the market environment.

2. Right Quantity:
The manufacturing organization should produce the products in the right number. If they are produced more than demand the capital will block up in the form of inventory and if the quantity is produced in short of demand, leads to a shortage of products.

3. Right Time:
Timeliness of delivery of the product to the consumer or wholesaler is one of the important parameters to judge the effectiveness of production department. So, the production department has to make the optimal utilization of input resources to achieve its desired objectives.

4. Right Manufacturing Cost:
Manufacturing costs are incurred before the product is manufactured and released into the market. Hence, all attempts should be made to produce the products at pre-established cost, to reduce the variation between actual and the standard (pre-established) cost.

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