Production management is ‘a process of planning, organizing, directing
and controlling the activities of the production function. It combines and
transforms various resources used in the production subsystem of the
organization into value added product in a controlled manner as per the
policies of the organization’.E.S.Buffa defines production management as
Production management
deals with decision-making related to production processes so that the
resulting goods or services are produced according to specifications, in the
amount and by the schedule demanded and out of minimum cost’.
Objectives of Production Management
The objective of the production management is ‘to produce goods and
services of Right Quality and Quantity at the Right time and Right
manufacturing cost’.1.
Right Quality:
The quality of product is established based upon the customers need. The
right quality is not necessarily being the best quality. It is determined by the
cost of the product and the technical characteristics as suited to the
specific requirements.2.
Right Quantity:
The manufacturing organization should produce the products in right number.If they
are produced in excess of demand the capital will block up in the form of
inventory and if the quantity is produced in short of demand, leads to
shortage of products.3.
Right Time:
Tim e l i n e s s o f d e l i v e r y i s o n e o f t h e i m p o r t a n t p a r a m e t e r t o
j u d g e e f f e c t i v e n e s s of production department. So, the production
department has to make the optimal utilization of input resources to
achieve its objective.4.
Right Manufacturing Cost:
Manufacturing costs are established before the product is actually
manufactured. Hence, all attempts should be made to produce the products at preestablished cost, so as to reduce the variation between actual and the
standard (pre-established) cost.

Strategic OM Decisions

These three concepts come into play as operations managers make good
decisions in the seven major functional areas of operations management,
otherwise known as operations decisions.

Product and Service Management.What good or service do we
offer and what is the design of it?
 Operations and Supply Chain Management.Should we make or
buy what we need to produce our good or service? If we purchase it,
who can supply it?
 Inventory Management.How much should we keep on hand? When
do we re-order?
 Forecasting and Capacity Planning.What does the short-term and
long-term schedule look like? How much can we make in what period of
 Operations Scheduling.What do we need for materials?
 Management of Quality.What quality system should we use? What
impact does quality have on our organization?
 Facilities Planning and Management.How is the facility used in
production? What is its relationship to other resources? How should it
be arranged?