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Scope and Functions of

Production Management: its

Meaning, Definition, Function
and Scope
Production Management : its Meaning, Definition, Function and
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:

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

The following definitions try to explain main characteristics of

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

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

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 customers confidence and retardation in the progress of the

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

(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

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.

Due to the dynamic change in the business environment,
the scope of production and operation management has
increased. Following are the activities which are included
under production and operations management functions:

1. Facility Location - Selecting appropriate location

for the production

2. Plant layouts and material handling - Deciding

upon the machines, equipment and necessary
devices which could lead to effectual and desired
production in the most economic way. Preparation of
plan layout for the establishment of machines in the
required sequence. Storage of material and handling

it in most effective way to avoid the wastage and
delivery at the work centers as and when required.

3. Product design - Designing the product and

conceive the idea about its production.

4. Process design - Determination of the production

process which is most relevant and efficient in the
given state of affairs.

5. Production and planning control - Planning the

production and its various aspects how, when and
where producing a particular product or its assembly
will be done.

6. Quality control - Controlling the production and

ensuring the quality by setting the check points and
taking the periodic measurements of the current

7. Materials management - Managing the inventories

of raw material, semi-finished and finished goods in
a way that neither excessive money may block in
this non-productive operation nor the required

8. Maintenance management - Analysis the

deviations and formulating the corrective measures
to stay in track with planned quality, time-schedule
and predetermined cost schedules.