Understanding of Production and Operations Management
https://www.managementstudyhq.com/production-and-operations-management-functions-importance.html
Difference between Production Management and Operations Management

Production Management – involves using resources judiciously, to create acceptable
products. In this case, raw materials are being transformed into value-added products
efficiently.

Operations 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.
Contents
Introduction
Meaning of Production Management
Importance of Production Function and Production
Management
Meaning of Operation Management
The Function of Operations Management
Importance of Operation Management
What is the Aim of the Production Function?
The Function of Production Management
Conclusion
Why Production Management is so Important
INTRODUCTION
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.
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 is 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.

Production Control – Here the manager supervises and directs the production process.
He or she also must find out and ensure the right production plan is followed during the
production process. If there are deviations, the production manager has to take the right
steps to correct them.

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 underperforming 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.
Conclusion
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.
Additional Readings:
Definition, Objectives, Scope and Functions of Production & Operation Management
Definition

Production / Operations Management is defined as the process which transforms the
inputs/resources of an organization into final goods (or services) through a set of
defined, controlled and repeatable policies.
The production systems are frequently classified in the following:
 Mass Production – example, car production
 Continuous Production – example, sugar production
 Batch Production – example, production of bread (Angelina)
 Job Shop Production – example, printing press
There are some pre-defined objectives of production management, which are the following:
 Right quality
 Right quantity
 Right time and
 Right cost
Objectives
1. Maximum customer satisfaction through quality, reliability, cost and delivery time.
2. Minimum scrap/rework resulting in better product quality.
3. Minimum possible inventory levels (i.e., optimum inventory levels).
4. Maximum utilization of all kinds of resources needed.
5. Minimum cash outflow
6. Maximum employee satisfaction
7. Maximum possible production (i.e., outputs)
8. Higher operating efficiency
9. Minimum production cycle time
10. Maximum possible profit or return on investment
11. Concern for protection of environment
12. Maximum possible productivity
Production Management v/s Operations Management
A high level comparison which distinct production and operations management can be done on
the following characteristics:


Output: Production management deals with manufacturing of products like (computer,
car, etc.) while operations management cover both products and services.
Usage of Output: Products like computer/car are utilized over a period of time whereas
services need to be consumed immediately.


Classification of work: To produce products like computer/car more of capital
equipment and less labor are required while services require more labor and lesser
capital equipment.
Customer Contact: There is no participation of customer during production whereas for
services a constant contact with customer is required.
Scope of Production and Operation Management
Production and operations management concern with the conversion of inputs into outputs,
using physical resources, so as to provide the desired utilities to the customer while meeting the
other organizational objectives of effectiveness, efficiency, and adaptability. It distinguishes itself
from other functions such as personnel, marketing, finance, etc., by its primary concern for
conversion by using physical resources. Following are the activities which are listed under
production and operations management functions:
1.
2.
3.
4.
5.
6.
7.
8.
Location of facilities
Plant layouts and material handling
Product design
Process design
Production and planning control
Quality control
Materials management
Maintenance management
Location of facilities for operations is a long-term capacity decision which involves a long term
commitment about the geographically static factors that affect a business organization. It is an
important strategic level decision-making for an organization. It deals with the questions such as
“where our main operations should be based?”
Plant layout refers to the physical arrangement of facilities. It is the configuration of
departments, work centers and equipment in the conversion process. The overall objective of
the plant layout is to design a physical arrangement that meets the required output quality and
quantity most economically.
Material handling refers to the moving of materials from the store room to the machine and from
one machine to the next during the process of manufacture.
Product design deals with the conversion of ideas into reality. Developing the new products and
launching them in the market is the biggest challenge faced by the organizations.
Process design is a macroscopic decision-making of an overall process route for converting the
raw material into finished goods. These decisions encompass the selection of a process, choice
of technology, produces analysis and layout of the facilities.
Production planning and control can be defined as the process of planning the production in
advance, setting the exact route of each item, fixing the staring and finishing dates for each
item, to give production order to shops and to follow up the progress of products according to
orders. Planning is deciding in advance what to do, how to do it, when to do it and who is to do
it.
Dispatching is concerned with the starting processes. It gives necessary authority so as to start
a particular work, which has already been planned under “Routing” and “Scheduling”.
Quality Control may be defined as a system that is used to maintain a desired level of quality in
a product or service. It is a systematic control of various factors that affect the quality of the
product. Quality control aims at prevention of defects at the source, relies on effective feed back
system and corrective action procedure.
The main objectives of materials management are:
 To minimize material cost
 To purchase, receive, transport and store materials efficiently and to reduce the related
cost.
 To cut down costs through simplification, standardization, value analysis, import
substitution, etc.
 To trace new sources of supply and to develop cordial relations with them in order to
ensure continuous supply at reasonable rates.
 To reduce investment tied in the inventories for use in other productive purposes and to
develop high inventory turnover ratios.
THE SCOPE OF OPERATIONS MANAGEMENT
Operations management has been gaining increased recognition in recent years because of the
following reasons:
1. The application of operations management concepts in service operations.
2. The growing importance of quality.
3. The introduction of operation management concepts to other areas such as
marketing and human resources, and
4. The realization that the operations management function can add value to the
end product.
Advantages and Disadvantages of Operations Management
https://www.planettogether.com/blog/advantages-and-disadvantages-of-operationsmanagement
Operations management is a term used to describe the processes concerned with planning,
organizing, and supervising the overall production process.
This process was initially developed to help facilities improve the collaboration between various
processes of the organization. Operations management is usually delivery-focused, which
means that the facility will use these processes to ensure that production is carried out in the
most efficient manner possible to deliver its goods on time.
There are 2 key terms that help define Operations Management: Supply Chain Management
and Logistics. With a firm basis in these areas, Operations Management ensures that resources
are utilized carefully by reducing waste and implementing cost-effective decision making
strategies.
As Operations Management has become key for manufacturing operations around the globe, it
is important to understand the advantages and disadvantages associated with the process.
Advantages of Operations Management
Overall, operations management is a key factor for manufacturing organizations that wish to
take their production to the next level. Some notable advantages include:

Profitability Management: When your operations are properly managed, it is easier for your
company’s executives to rely on the production activity to get a better understanding of your
revenue stream. They are then able to rely on that consistent information to find new ways to
increase sales or come up with new product ideas.

Better Resource Management: Operations management processes focus on effectively
managing all of your resources to ensure that their potential is being maximized. Resources can
include physical machines as well as labor resources.

Competitive Advantage: Being able to coordinate the multiple levels and components of your
manufacturing organization means that things will run much more smoothly. Your production
time will likely decrease, allowing you to deliver goods on time which is a crucial aspect of
having great customer relations. This will allow you to promptly deliver great products and keep
you ahead of the competition.
Disadvantages of Operations Management
With any process, it is important to consider the disadvantages that can occur:

Multi-Level Dependency: One of the main disadvantages is that a large amount of the success
of implementing operations management procedures requires coordination between the
different components of the organization. Even if an effective plan is put in place, it will fail if it is
not carried out in the proper manner by all components.

Human Error: Another prevalent problem within manufacturing operations is the fact that
humans tend to be mistake-prone. Most of the time, this issue occurs during the transition from
manufacturing to sale. Because of this, it is important to ensure that operations management is
coordinating various areas effectively such as operations, marketing, finances, accounting,
engineering, information, and human resources.
Overall, if the individual components within the organization are not working well together, there
will only be a limited amount of success emerging from operations management processes. A
software that is becoming extremely common among manufacturing operations is advanced
planning and scheduling software. These softwares can provide thorough insight within the
various components of the production operations. APS softwares like PlanetTogether will take
your facility to the next level by helping you optimize and increase the efficiency of your
operations.
Production Management vs. Operations Management
https://diffzi.com/production-management-vs-operations-management/
Firstly, the main objective of production and operation management is to manage the resources
of the firm. The main difference between production and operation management is
that production management focuses on the production of goods and services. On the other
hand, operation management includes activities like comprising supervisions, planning and
designing of business operations. It can also be said that the production management is also a
part of operation management.
Production management and operations management are management jargon that needs to be
simplified for those who are sitting on the fence or those inside an organization unable to
comprehend them clearly. Lastly, both are part of business activities and both are required to
run the business smoothly.
Comparison Chart
Basis
Production Management
Operation Management
Production Management connotes
the administration of the range of
activities belonging to the creation of
products.
Operations Management refers to
the part of management concerned
with the production and deliver of
goods and services
Production management requires
extra capital to make the capital in
the beginning and needless labor
because it offers with the unit.
The operation management requires
less capital funding because it wants
extra work and needs immediate
outcomes.
Found in
Production management is found in
enterprises where production is
undertaken.
It is found in Banks, Hospitals,
Companies including production
companies, Agencies, etc.
Occurrence
Production management occurs on
outputs after manufacturing raised in
the market.
Operation management occurs on
input during manufacturing.
The objective of production
management is to produce the right
quality goods in the right quantity at
the right time and at least cost
Its objective is to utilize resources, to
the extent possible so as to satisfy
customers wants.
Definition
Capital
Objective
What is Production Management?
Production management performs many tasks regarding the production of goods and services.
It is a process of planning, scheduling, supervising and controlling the activities involved in the
production of goods and services. The main objective of product management is to produce the
right quality at the right time and at the cheapest price.
Basically, production management is found in enterprises where production is found. The
Production Management alludes to the utilization of administration requirements to the
technology work in an industrial facility. Production administration is the process of viable
arranging and controlling the operations of that space of an enterprise which oversees the real
change of supplies into accomplished objects. In this process of production management the
decision regarding the quality, quantity, price, packaging, design, etc. are taken by the
production manager.
What is Operation Management?
Operation management gives the insurance of smoothness and effectiveness of the operation in
the organization. Basically, deals with designing, implementing and controlling system of the
management.
The main objective of the operation management is to make sure that that the operation of
business runs effectively and result in the minimum of wastage. Operations administration
handles totally different very important points together with deciding the span of assembling
crops and enterprise administration strategies and actualizing the construction of information
innovation techniques. It ensures the supplies and work, or another data is utilized as a part of
the very best and productive route conceivable inside an affiliation – alongside these strains
amplifying the yield.
The operations chief wants to consider the common key methods, structural materials
arranging, assembling and creation frameworks, and their examination. Operations
Management is all about the optimum utilization of the company’s resources.
Key Differences between Production Management and Operations Management
1. Production Management can be defined as the administration of the set of activities
concerning the creation of goods or the transformation of raw material into finished
goods. Conversely, Operations Management is used to mean that branch of
management which deals with the administration both production of goods and
provision of services to the customers.
2. Production Management can only be found in firms where the production of goods is
undertaken. Unlike, one can find operations management in every organization, i.e.
manufacturing concerns, service-oriented firms, banks, hospitals, agencies, etc.
3. Production administration requires no enter from the shopper, however, operation
administration takes enter from the shopper as they make the most of companies.
4. Production administration requires extra capital gear to make the product in the
beginning and much less labor because it offers with the units. On the opposite hand,
operation administration requires much less capital funding however wants extra
work as folks need immediate outcomes.
5. Operation Management turns into referred to as the method that offers the
administration aspect of the issues relating to the enterprise actions and the
processes coping with effectivity throughout the group.
Conclusion
Thus, production and operation management are related to each other. Sometimes people
found difficulty in differentiating them. Production management involves in all the activities which
are related to the production of goods and services. On the other hand, Operation management
is related to all the activities regarding management like production of the good, delivery of
services, the quantity of product, quality of product and also meet the customer demands. In
conclusion, both are the most important management activity.