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What is Production Management? – Definition, Functions & Importance

Business management has several components, one of which is production management. In contrast to departments that specialize in other areas like marketing, distribution, delivery, accounting, and information management, it concentrates on the process of turning intakes and raw materials into the company’s final goods.

What is Production?

Let’s get started; We all know that production is the act of manufacturing items from raw materials, but it also has economic significance since, it results in an output that has value and will satiate human desires and requirements.

Simply defined, production generates goods that people want and will pay for, which stimulates the economy and enables producers to keep generating more and more outputs.

A company that creates items is referred to as a producer in economics. These companies generate commodities that customers will want to buy using the inputs like both material and immaterial, which are accessible to them.

Check out this video for the Product Manager Career Path

Table of Contents:

What is Production Management?

Production management is the procedure of controlling a company’s operations to provide the services and products it wants to produce. It comprises organizing, carrying out, and managing processes that transform raw resources into completed products and services.

The company’s production strategy, which calls for the use of certain technologies and the accomplishment of pre-established goals relating to manufacturing mixes, unit costs, quality, and production capabilities, should be successfully implemented, according to the production management.

It usually coordinates, supervises, and regulates the individuals or teams in charge of the manufacturing process itself, equipment maintenance, quality control, and inventory control.

Production Management

As a result, it is possible to state that product management is agitated with acquiring resources, such as management inputs, natural resources, manpower, capital, machinery, and so on, in order to create or produce completed goods.

Production management is, in essence, the procedure between these two checkpoints. Production management is the control and execution of the process that converts raw resources into finished goods.

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Functions of Production Management

The 6Ms of production management—Men, Machines, Money, Methods, Materials, and Market—are used in an effort to meet better customer expectations.

Functions of Production Management

Its primary objective is to create services and products in the appropriate amounts, with the best possible quality, on time, and at the lowest possible cost. Adopting new technology and creative workplace modifications is made easier by production management.

All personnel participating in the company’s production processes must be monitored and controlled by production management in order to guarantee that the desired output is produced.

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Production Controlling and management

Machine maintenance and replacement

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Importance of Production Management

Optimal use of resources and funds

Production management must be implemented effectively. You won’t be able to fulfill deadlines or hit your sales goals if you don’t. There are several advantages to using a well-planned production management solution.

Check out our blog on the Scope of Production Management!

Example of Production Management

Optimal wires for electric appliances are produced by a small company named Black Current. To fill the role of production manager, the general manager most recently employed a fresh specialist.

The production department is subordinate to the four departments of process, quality, maintenance, and planning. The general manager made it very clear in his job description what objectives needed to be accomplished by the end of the first year.

In order to cut production costs by 5%, the production manager must allocate labor, materials, and technology resources as effectively as possible.

Maintaining high standards is necessary. Additionally, he must ensure inventory levels equal to roughly three weeks of sales. He is also in charge of planning a project that would increase manufacturing capacity by 56%.

By putting into practice specific tactics like lean manufacturing, The new production manager is certain that he can meet these goals.


It is tempting to characterize production management as a mixture of other positions because it is a relatively young subject and the function may vary so much from organization to organization.

This strategy, unfortunately, frequently leads to a mismatch between what makes a product manager appear good on paper (for example, an architect who understands some programming or a developer with an M.Sc) as well as what gets a product manager effective in their day-to-day job.

The core skills model, in my opinion, will transform the theoretical discussion of production management into one that is more in line with the actual work that product managers do daily.

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