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Understanding of Production and Operations Management

Production and Operation Management deals with the creation of goods and services through the application of the business concept. They are also vital in both service and manufacturing firms. Production and Operations Management has a primary objective, which is to employ the company’s resources to produce goods and services fit for the market. This post highlights the definitions, importance, and function of both management concepts.

Production and Operations Management

Meaning of Production Management

Every organization has management principles. And the application of that principle to production function is the term “production management.” This management concept involves planning, scheduling, supervising and control of the activities that concern the production of goods to meet the needs of consumers and also generate profit for the business.

Production Management involves using resources judiciously, to create acceptable products. In this case, raw materials are being transformed into value-added products efficiently. The production manager is also in charge of this area of the business. In other words, decisions such as quantity, quality, price, design, packaging style and material for the product, among others, are made by the production manager. He also ensures that the output matches the specifications.

Importance of Production Function and Production Management

Every successful organization has a line function as well as a support function that must be efficient. But the production comes under the line function category which has a direct impact on the customers. Hence it dictates customer experience. Customer experience is critical for the survival of any organization. Therefore line function to a large extent determines the future of the company in question.

What’s the Aim of the Production Function?

The goal of the production function is to add value. Be it product or services; the idea is to create something that will strengthen the relationship between the organization and customers. But this cannot only be made possible by the production department.

The marketing people also have a huge role to play in this. They are the ones that will distribute the product to potential buyers and should have the capacity to inform the production department of what customers or consumers would prefer.

The Function of Production Management

The role of Production Management is quite elaborate. But the sole aim is to ensure the business produces quality products that can satisfy the needs of customers on a regular basis. Below are the functions of production management.

  • Scheduling – This function is critical in every organization. It has to do with planning when the actual production would begin and ends.
  • Cost and Quality Control – Every company knows how essential quality control and price are. Customers are not just looking for the best products. But they also want to have them at the lowest possible price. Quality control is an essential duty the production manager has to perform. It entails multiple checks performed on the product to ensure quality is intact.
  • Maintenance of Machines – Production management also entails making sure that instruments used are in good working condition. And that means replacing the ones that are underper forming or changing damaged parts to enable the machine to function optimally.

Why Production Management is so Important

Production management is relevant to the firm’s success in many ways. Used efficiently, it can lead to numerous accomplishments which will take the business to a great height. Below is the importance of production management.

  • Helps the Firm to Accomplish its Objectives

Production management helps the firm to achieve its sales and business objectives by producing goods and services that meet the need of consumers. Sales and profit will increase if the product produced satisfies the customers’ needs.

  • Boost Business Reputation and Goodwill

A satisfied customer will undoubtedly want to repeat patronage. That’s why businesses should ensure that quality products are delivered continuously. Making sure that your customers are always happy can also boost business reputation.

  • Reduces the Cost of Production

Production management ensures that resources are used judiciously, without compromising on quality. In other words, the business will continue to deliver quality products and sell at a convenient price to customers. But this can only be possible in a situation where the input and output are maximized.

Meaning of Operation Management

Operation Management is in charge of managing the conversion process. This unit handles the day-to-day running of the business to ensure operations within the organization are carried out smoothly. It is also in charge of production administration, manufacturing and other processes like the rendering of services.

In short, everything regarding production processes such as designing, implementation, and control is the duty of operation management. And the sole aim is to deliver the desired products and services to clients while also ensuring that all parties involved are adhering to the policies presented by the management of the company. The focus is also to make sure that there is little or no wastage during and after the production process, through the effective use of the firm’s resources.

The Function of Operations Management

As earlier mentioned the duty of the operations manager entails making sure that resource are used for the right thing and plays a significant role in the production process to ensure the team delivers quality output. Below are the functions of operations management.

  • Finance

Operation management’s responsibility is to make sure that the company’s resources are used in the right manner to generate goods that satisfy its customers.

  • Strategy

Operations managers also help in the development of plans or tactics that could lead to the maximization of resources and production of products that gives the company a competitive edge over its competitors.

  • Product Design

It is the operations manager’s responsibility to come up with product design that not only caters to the needs of customers but follows the market trend.

  • Forecasting

Operation management also predicts the performance of products or services in the future. In other words, he critically analyses what customers’ demand for certain products would be in the future.

Importance of Operation Management

The role of the operation manager is to ensure that products or services are always available and reaches customers promptly. He also makes sure that raw materials are transformed successfully into finished products. One importance of operation management is to improve the overall productivity of the business. Resources are also used properly in other to eliminate wastage and boost profit.


Both are relevant to an establishment. They both help the firm to accomplish its objectives. In the past, the mindset people had was that operation management isn’t pertinent. But if you read this post carefully, you will discover how important the role of the operations manager is. It is best for companies to implement both management concepts and ensure they are run efficiently to achieve business growth and customer satisfaction.

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About Sonia Kukreja

I am a mother of a lovely kid, and an avid fan technology, computing and management related topics. I hold a degree in MBA from well known management college in India. After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people.