Production Management: it’s

Meaning, Definition, Function and

Scope
Production Management : it’s Meaning, Definition, Function and
Scope!

Meaning of Production Management:

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.

The application of management to the field of production has been

the result of at least three developments:
(i) First is the development of 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 business of one type or another, but for
the most part, these people were owners of business and did not regard
themselves as managers as well,

(ii) 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,

(iii) 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.
Definition of Production Management:
ADVERTISEMENTS:

It is observed that one cannot demarcate the beginning and end points of
Production Management 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.

The following definitions try to explain main characteristics of

production management:
(i) In the words of Mr, E.L. Brech:

ADVERTISEMENTS:

“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.” This definition limits the
scope of production management to those activities of an enterprise which are
associated with the transformation process of inputs into outputs. & the
definition does not include the human factors involved in a production process. It
lays stress on materialistic features only.

(ii) Production Management deals with decision-making related to production

process. So that the resulting goods and services are produced in accordance with
the quantitative specifications and demand schedule with minimum cost.
According to this definition design and control of the production system are two
main functions of production management.

(iii) Production Management is a set of general principles for production

economies, facility design, job design, schedule design, quality control, inventory
control, work study and cost and budgetary control. This definition explains the
main areas of an enterprise where the principles of production management can
be applied. This definition clearly points out that production management is not
a set of techniques.

ADVERTISEMENTS:

It is evident from above definitions that production planning and its control are
the main characteristics of production management. In the case of poor planning
and control of production activities the organization may not be able to attain its
objectives and may result in loss of customer’s confidence and retardation in the
progress of the establishment.

In short, the main activities of production management can be listed

as:
(i) Specification and procurement of input resources namely management,
material, and land, labour, equipment and capital.

(ii) Product design and development to determine the production process for
transforming the input factors into output of goods and services.

ADVERTISEMENTS:

(iii) Supervision and control of transformation process for efficient production of

goods and services.
Functions of Production Management:
The definitions discussed above clearly shows that the concept of production
management is related mainly to the organizations engaged in 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 lay out, 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 production management in the area of

factory management. In the beginning the main function of production
management was to control labour costs which at that time constituted the major
proportion of costs associated with production.

But with development of factory system towards mechanization and automation

the indirect labour costs increased tremendously in comparison to direct labour
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.
In modern times production management has to perform a variety of
functions, namely:
(i) Design and development of production process.

(ii) Production planning and control.

(iii) Implementation of the plan and related activities to produce the desired
output.

(iv) Administration and co-ordination 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 Production Management.

Scope of Production Management:

The scope of production management is indeed vast.

Commencing with the

selection of location,

production management covers such activities as

acquisition of land,

constructing building,

procuring and installing machinery,

purchasing and storing raw materials and converting them into saleable
products.
Added to the above are other related topics

such as quality management,

maintenance management,

production planning and control,

methods improvement and work simplification and other related areas.

Elements of Production System:

The following elements are below;

 Inputs: Inputs are the physical and human resources utilized in the production

process. They consist of raw materials, parts, capital equipment, human efforts,
etc.

 Conversion Process: It refers to a series of operations that are performing on

materials and parts. Operations may be either manual or mechanical or
chemical. Operations convert inputs into output. The conversion process also
includes supporting activities, which help the process of conversion.

 The supporting activities include; production planning and control, purchase of

raw materials, receipt, storage and issue of materials, an inspection of parts
and work-in-progress, testing of products, quality control, warehousing of
finished products, etc.


 Outputs: Outputs are the products or completed parts resulting from the
conversion process. The output generates revenue.
 Storage: Storage takes place after the receipt of inputs, between one operation
and the other and after the output.
 Transportation: Inputs are transporting from one operation to another in the
production process.
 Information: It provides system control through measurement, comparison,
feedback, and corrective action.

 Production Manager:


8 Major Responsibilities of a
Production Manager
 Some of the major responsibilities of a production manager are: (1)
Production planning (2) Production control (3) Quality control (4) Method
analysis (5) Inventory control (6) Plant layout (7) Work measurement and
(8) Other functions:
 (1) Production planning:
 Production planning is the first function performed by the production
manager.
 ADVERTISEMENTS:

 Production planning is concerned with thinking in advance what is to be

produced, how it is to be produced and by what time should it be produced.
It is concerned with deciding about the production targets to be achieved by
keeping in view the sales forecasts.
 (2) Production control:
 Production planning cannot be properly achieved without an effective
system of production control. It is in fact concerned with successful
implementation of production planning. It aims at completing production
well in time and also with lesser costs. A proper system of production
control ensures continuous production, lesser work-in-progress and
minimisation of wastages.
 (3) Quality control:
 The production manager is also concerned with maintaining required
quality of the product. Quality control is concerned with controlling the
 negative variables which affect the ultimate quality of a product. It is
concerned with use of all the ways and means where by quality standards
could be maintained.
 (4) Method analysis:
 There are many alternative methods for manufacturing a product. Some
methods are more economical than others. The production manager should
study all the methods in detail by analysing them in detail and select the
best alternative out of them. The process of selecting the best alternative is
known as methods of analysis.
 ADVERTISEMENTS:

 Methods of analysis are considerably helpful in minimising the cost of

production and improving productivity of the concern.
 (5) Inventory control:
 The next important function to be carried by a production manager is to
exercise proper control over the inventory. He should determine economic
order size, maximum, minimum, average and danger levels of materials so
that problems of overstocking and understocking do not arise. This also
helps in minimising wastages of materials.
 (6) Plant layout:
 Plant layout is primarily concerned with the internal set up of an enterprise
in a proper manner. It is related to orderly and proper arrangement and use
of available resources viz., men, money, machines, materials and methods
of production inside the factory. In other words it is concerned with
maximum and effective utilisation of available resources at minimum
operating costs.
 (7) Work measurement:
 Work measurement methods are concerned with measuring the level of
performance of work by a worker. Time and motion studies techniques can
be used for work measurement. If a worker works below the level fixed by
work-measurement techniques, his performance must be improved through
positive or negative incentives.
 (8) Other functions:
 ADVERTISEMENTS:

 Apart from the above-mentioned functions, the production Department

also carries certain other functions viz., cost control, standardisation and
storage, price analysis and provision of wage incentives to workers etc.