Meaning of Production Management
The term Production Management is the combination of two words Production’ and Management. The word ‘Production’ refers to the process of conversion of raw materials into finished goods, ready for sale; whereas the word ‘Management’ refers to the utilization of the factors of production (viz. and, labour, capital, raw materials and machinery) in such a manner that they yield maximum output at the minimum costs. In this way, it is not only the process of conversion of raw materials into finished goods but also aims at maximum yield at minimum costs.
According to Prof. Buffa
Production management refers to decision making regarding the production processes, so that the output is produced according to predetermined standards within the given time at minimum costs, for the required demand.
To conclude, we can say that Production Management concerns to the planning and control of production processes which help in providing the consumer quality products at minimum price.
Under production planning, first the demand for the product produced by the concern is anticipated, on the basis of which the quality of output is determined.
This aspect concerns itself with the necessary control of those production processes which keep the cost minimum.
This is an important aspect which ensures the standard quality of the production along with minimum cost.
Importance of Production Management
- It helps maximize productivity.
- Discovery of new inventions and techniques become possible in production.
- Easy flow of raw-material become possible without any hurdle.
- Best Utilization of resources becomes possible.
- Provide services and satisfaction to consumers.
- Cost reduction becomes possible.
- Growth in the profits of organisation becomes possible.
- Improvement in the standard of living of the society.
- Increment in the chances of employment.
- Social security and welfare activities become possible for employees.
- Control over fluctuations of production cycles become possible.
- Useful to improve the morale of organisation and workers.
- It become possible to face the competition arising in the field of production and marketing.