Production management is the management of an organization’s production systems, which converts inputs into the desired product and services. As they define; “Production Management is the process of effective planning and regulating the operations of that section of an enterprise which is responsible for the actual transformation of materials into finished products.”
Discuss each one of Production Management; Introduction, Meaning, and Function.
They are a process of planning, organizing, directing and controlling the activities of the production function in an organization to achieve the goals of an organization. A production system takes given inputs which include raw material, people, machines, tools, building, technology, cash, information and other resources whereas the outputs include the product and services.
Introduction to Production management:
They are a branch of management which is related to the production function. Production may refer to as the process concerned with the conversion inputs (raw materials, machinery, information, manpower, and other factors of production) into output (semi-finished and finished goods and services) with the help of certain processes (planning, scheduling and controlling etc.) while management is the process of exploitation of these factors of production in order to achieve the desired results.
Thus, they are the management which by scientific planning and regulation sets into motion the part of an enterprise to which it has been entrusted the task of actual transformation of inputs into output. They also deal with decision-making regarding the quality, quantity, cost, etc., of production.
It applies management principles to production. They are part of business management. They also call “Production Function.” It is slowly being replaced by operations management.
Meaning of Production Management (POM):
They refer to the application of management principles to the production function in a factory. In other words, POM involves the application of planning, organizing, directing and controlling the production process.
The application of management to the field of production has been the result of at least three developments:
- First is the development of the factory system of production. Until the emergence of the concept of manufacturing, there was no such thing as management as we know it. It is true that people operated the business of one type or another, but for the most part, these people were owners of the business and did not regard themselves as managers as well,
- Essentially stems from the first, namely, the development of the large corporation with many owners and the necessity to hire people to operate the business,
- Stems from the work of many of the pioneers of scientific management who were able to demonstrate the value, from a performance and profit point of view, of some of the techniques they were developing.
It is observed that one cannot demarcate the beginning and end points of POM in an establishment. The reason is that it is interrelated with many other functional areas of business, viz., marketing, finance, industrial relation policies, etc. Alternately, Production Management is not independent of marketing, financial and personnel management due to which it is very difficult to formulate some single appropriate definition of Production Management.
A few definitions of production management are being reproduced hereunder to understand the meaning of the term clearly;
“Production management then becomes the process of effectively planning and regulating the operations of that part of an enterprise which is responsible for the actual transformation of materials into finished products.”
The definition seems to be quite incomplete. As it ignores the human factors involved in a production process and lays stress only on the materialistic features.
Elwood S. Buffa has defined the term in a broader sense as;
“Production management deals with decision making related to the production process so that the resulting goods or services are produced according to specifications in amounts and by the schedules demanded, and at a minimum cost.”
Thus, POM is concerned with the decision making regarding the production of goods and services at a minimum cost according to the demands of the customers through the management process of planning, organizing and controlling. In order to attain these objectives, effective planning and control of production activities are very essential. Otherwise, the customers shall remain unsatisfied and ultimately certain activities may have to be closed.
Tasks of Production:
POM, thus, is assigned with the following tasks;
- Specifying and accumulating the input resources, i.e., management, men, information, materials, machine, and capital.
- Designing and installing the assembly or conversion process to transform the inputs into output, and.
- Coordinating and operating the production process. So, the desired goods and services may be produced efficiently and at a minimum cost.
Functions of Production Management:
The definitions discussed above clearly shows that the concept of production management is related mainly to the organizations engaged in the production of goods and services. Earlier these organizations were mostly in the form of one man shops having insignificant problems of managing the productions.
But with development and expansion of production organizations in the shape of factories more complicated problems like location and layout, inventory control, quality control, routing and scheduling of the production process, etc. came into existence which required more detailed analysis and study of the whole phenomenon. This resulted in the development of POM in the area of factory management.
In the beginning, the main function of production management was to control labor costs. Which at that time constituted the major proportion of costs associated with production. But with the development of the factory system towards mechanization and automation. The indirect labor costs increased tremendously in comparison to direct labor costs, e.g., designing and packing of the products, production and inventory control, plant layout and location, transportation of raw materials and finished products, etc. The planning and control of all these activities required more expertise and special techniques.
What to do production functions?
In modern times POM has to perform a variety of functions, namely:
- Design and development of the production process.
- Production planning and control.
- Implementation of the plan and related activities to produce the desired output, and.
- Administration and coordination of the activities of various components and departments responsible for producing the necessary goods and services.
However, the responsibility of determining the output characteristics and the distribution strategy followed by an organization. Including pricing and selling policies are normally outside the scope of POM.