Definition, Objectives, Nature and Scope

1. Prepared by Ms. Shery Asthana
Asst. Prof. (Greater Noida Institute of Management)

2. Production refers to creation of goods and services for consumption by
the society. The production means converting inputs into outputs as per
the need of the society.
Production management encompasses all those activities that enable
conversion of a set of inputs into outputs which are useful to meet the
human needs.
It involves application of planning, organizing, directing and controlling
the production process.
Definition

3. Primary
Objectives
Secondary
Objectives
Right Time
Right
Quantity
Right Quality
Minimum
Cost
Equipment
Quality
Availability of
Raw Material
Right Manpower
Objectives of Production Management

4. One of the important parameters of determining the effectiveness of
manufacturing or production is “timely delivery” as per the specified schedule.
However, due to some factors like absenteeism, delay in the availability of raw
material, machine breakdown, etc. create adverse effects in the completion of
products on time.
The product’s quality is decided as per the requirement of customers. The
engineering or design department translates the requirements of customers into
product specifications. These specifications are further translated into objectives
that are measurable and achievable by the manufacturing department of an
organization. The product’s final quality is determined and a proper balance
between the product quality and manufacturing cost is required to be maintained.
One objective of production management is to ensure that the organization is
producing products and services in the right numbers as per their demand. In the
case of less demand and comparatively high or more production of products, it will
block the capital in stock. Wherein, if the quantity being produced is less than the
demand for products and services, then it will create a shortage. So, the decision is
required to determine the right quantity to produce.
Primary Objectives
(1) Production of Products within the Given Timeframe or Schedule
(2) Production of Goods & Services of “Right Quality”
(3) Producing Goods & Services in “Right Quantity”

5. Manufacturing costs are determined prior to the manufacturing of any product. Product
manufacturing must take place in pre-defined manufacturing costs. Keeping the
difference between standard cost and the actual cost of manufacturing at the minimum
is also the focus area of production management.
This objective includes checking the quality and standards of equipment and machine in
order to ensure the production of products with required accuracy and as per pre-
defined specifications. This also consists of ensuring the minimum level of running and
procurement cost and maximum utilization of machines once purchased and used for
production.
Production management looks after the availability of raw materials on time according
to the specifications i.e. quality, size, shape, colour, etc. It ensures that material is
utilized up to a maximum extent with the minimum level of scrap or wastage.
The aim of Production management also includes providing adequate manpower as it is
considered an important input in the production process and the success of output also
depends a lot on the type of manpower. So, production management ensures the
balance and right match between the workers and assigned jobs to them.
(4) To Ensure Minimum Manufacturing Cost
Secondary Objectives
(1) To Ensure Equipment and machine quality
(2) Availability of raw materials as and when required
(3) Adequate and right manpower

6. Production management is a key tool available
with an organization which assist in value addition. It is a process which enables in
producing high-quality products by purchasing raw materials from the right source,
in right form, at right price and in right quantity. These quality goods provide better
satisfaction to customers thereby improving goodwill of an organization.
It is an inter-disciplinary approach which is derived
from several disciplines and subjects. Different subjects like statistics, mathematics,
economics, engineering, sociology and human psychology have contributed toward
the development of production management approach.
Production management is an essential
component of General management. It is a tool which assist managers in planning,
organizing, coordinating and controlling all activities related to the production of
products and services.
It is a process of transformation in which raw
materials are converted into finished products that are ready for consumption by
consumers. Production management focuses on economical production of
products avoiding any wastage of raw materials used.
Nature of Production Management
(1) Results in Value Addition:
(2) Inter-Disciplinary Approach:
(3) Part of General Management:
(4) Transformation Process:

7. Production management monitors day to day
operations of business for ensuring long-term continuity. It supervises all
production activities on daily basis for checking out whether all resources
are efficiently utilized.
It can be treated both as an art as well as science.
Production management is termed as art as it is the one which assign,
coordinates and monitors all work activities of an organization. Whereas,
it is a science as it manages all machines and technical aspects helping in
production activities.
Production management not only
manages the activities related to production of tangible products. It is a
process which monitors the service sector also where intangible products
are provided to customers as per their needs.
(5) Operative Function:
(6) Both Art and Science:
(7) Management of Service Sector:

8. It involves selecting the right location for setting up
production facilities of business that affects its long term growth. This is an
important decision to be taken as it involves long term commitment and huge
investments in land, building and machinery. Location of facility should be
appropriate from where raw materials, labour and other factors of production are
easily accessible by business.
Plant layout is concerned with physical
arrangement of facilities set up by business. It involves deciding departments, work
Centre’s, machines and necessary equipment’s within the facility for ensuring
better productivity. Material handling refers to managing the movement of
materials from storeroom to machinery and from machinery to another stage of
production like packaging and storing.
Product designing means giving shapes to ideas of products
for converting them into a reality. Every organization should come up with
innovative products in market after conceiving new ideas based on market
requirements.
Scope of Production Management
Facility location:
Plant layout and Material Handling:
Product Designing:

9. Process design is an overall route followed by business
for transforming raw materials into finished products. It is a crucial decision to
be taken as it determines the efficiency of business. It involves choosing
appropriate technology, deciding sequence of production processes and
facilities layout.
It involves planning and controlling
various aspects of production activities. PPC is a process of deciding production
in advance, setting up the exact route for each item, deciding the start and
finish deadline of each product for directing production orders to shops and
following product progress in accordance with the order.
Quality control is a process of checking and maintaining
the required quality standards of production activities within the organization.
It ensures that goods produced are of high quality by setting up check points
and measuring performance from time to time.
It refers to evaluation of all business activities
for identifying any deviations if there. Maintaince management involves taking
all corrective steps for removing these deviations. It focuses on keeping all the
processes on track in line with decided quality, pre-determined cost schedule
and time range. Taking care of all machinery repairs, replacement and servicing
are included in this.
Designing of Process:
Production Planning and Control (PPC):
Quality Control:
Maintaince Management: