Production Management: Definition, Importance And Functions


Production management involves overseeing the conversion of raw materials, funds, and resources into the final product. Production management is a vital aspect of business management that ensures the success of the manufacturing process. In other words, production management deals with managing raw materials, adhering to the design descriptions, performance, equipment use, and labor to ensure the production process goes as planned.

The primary responsibility of production management is to ensure all production aspects work together while resolving factors affecting production management. Also known as the production 5Ms, the production aspects include men, machines, methods, materials, and money. If one of the aspects is left unattended, you’re more likely to experience adverse effects in the production process. 

On the other hand, a well-functioning and well-designed production management procedure will lead to high profits, lower costs and high-quality products. A production process’s success depends on the effectiveness of production management.

What Are The Importance Of Production Management?

1. Lowers Manufacturing Costs

Production management minimizes inputs while maximizing outputs, resulting in lower production costs of the end product. With lower production costs, the company is more likely to experience an expansion in profit margin, leading to its success.

2. Helps Attain Business Objectives

Every business owner’s dream is to produce end products efficiently to satisfy their customers and grow their business. Luckily, with effective product management, you don’t only attain this but also produce high-quality products. High-quality products delivered on time promote a company’s growth, multiply funds for improvement, and increase clients’ satisfaction.

3. Puts The Company At A Competitive Level

Production management puts a company at a competitive level since the company produces better quality and quantity products. Also, production management ensures that you set the right price for the products while producing them at the right time to align with your customer’s requirements, placing your company in a better position in the market.

4. Helps To Invent New Products

With production management, you can conduct research and come up with improved procedures to develop new products to satisfy different clients. This procedure also helps the company develop high-quality products. With new products, there is a greater chance of increasing your profits since you’ll satisfy a wide range of customers.

5. Enhances Resources Utilization

As earlier said, production management oversees every aspect of manufacturing. This helps to optimize resource utilization and minimize wastage. As a result, the company experiences high returns and minimal wastage.

6. Expands The Company

Production management helps come up with products to suit various clients’ requirements. With quality products, more purchases and profits are achieved, leading towards the company’s expansion.

7. Reduces Product Failure

Once the company determines what its clients are looking for in particular products, production management ensures that the products are manufactured to meet these specifications. Therefore, the chances of manufacturing ‘unwanted’ products are reduced drastically, leading to less wastage and reduced product failure.

Functions Of Production Management

1. Production Planning And Control

It’s vital to choose the perfect production process for a specific product. When doing so, you must make firm decisions to select the best machines and technology and determine the required capital, among other things. However, before making these decisions, you must have a plan.

A production manager supervises production control. The procedure is compared with the initial planning to make compromises, determine loopholes, and attend to them accordingly.

Scheduling is done to determine when to begin and complete specific production activities. Most importantly, inventory and costs must be well taken care of to avoid losses and enhance production. The process of allocating labor and materials is referred to as a production schedule.

2. Production And Design Selection

A company can easily settle on the best product and design with production management. Understanding what clients want puts a company in a better surviving position since you produce exactly what the clients are looking for. After determining the product and the design, the production manager oversees the process to ensure it remains relevant and goes out for a reasonable price.

3. Equipment Maintenance And Replacement

Production management must ensure the machines are working efficiently. If they aren’t, they’re either replaced or mended. It’s vital to note that poorly performing machines can lower production or interfere with the product’s quality, leading to a bad product reputation.


Production management is a critical aspect of a manufacturing company. It ensures all the parties involved work harmoniously to develop a better end product. It’s fair enough to say that without production management, a company can develop products that don’t align with customers’ requirements, leading to a company’s failure. Also, the company can experience lots of wastage since there are no mechanisms to oversee the process to prevent such.


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