Production management is a process of planning, organizing, directing
and controlling the activities of the production function. It combines and transforms various resources used in the production subsystem of the organization into value added product in a controlled manner as per the policies of the organization.E.S.Buffa defines production management as follows: 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 and services of Right Quality and Quantity at the Right time and Right manufacturing cost.1. Right Quality: The quality of product is established based upon the customers need. The right quality is not necessarily being the best quality. It is determined by the cost of the product and the technical characteristics as suited to the specific requirements.2. Right Quantity: The manufacturing organization 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.3. Right Time: Tim e l i n e s s o f d e l i v e r y i s o n e o f t h e i m p o r t a n t p a r a m e t e r t o j u d g e e f f e c t i v e n e s s of production department. So, the production department has to make the optimal utilization of input resources to achieve its objective.4. Right Manufacturing Cost: Manufacturing costs are established before the product is actually manufactured. Hence, all attempts should be made to produce the products at preestablished cost, so as to reduce the variation between actual and the standard (pre-established) cost.
Strategic OM Decisions
These three concepts come into play as operations managers make good decisions in the seven major functional areas of operations management, otherwise known as operations decisions.
Product and Service Management.What good or service do we
offer and what is the design of it? Operations and Supply Chain Management.Should we make or buy what we need to produce our good or service? If we purchase it, who can supply it? Inventory Management.How much should we keep on hand? When do we re-order? Forecasting and Capacity Planning.What does the short-term and long-term schedule look like? How much can we make in what period of time? Operations Scheduling.What do we need for materials? Personnel? Management of Quality.What quality system should we use? What impact does quality have on our organization? Facilities Planning and Management.How is the facility used in production? What is its relationship to other resources? How should it be arranged?