• Articles
  • Interview Questions

What is Production Management? - Definition, Functions & Importance

What is Production Management? - Definition, Functions & Importance

Production management is one of the components of Business 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 inputs like both material and immaterial, which are accessible to them.

Check out this video for the Product Manager Career Path

What is Production Management?

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

Get 100% Hike!

Master Most in Demand Skills Now !

Are you interested in Production Management? Check out Intellipaat’s Product Management Course!

Functions of Production Management

The 6Ms of production management fall under the functions of production management —Men, Machines, Money, Methods, Materials, and Market—which 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.

Also, check out the blog: What is Product-Market Fit?

Choose Design and Product

  • Production management aids in the organization’s choice of the appropriate product for production as well as the appropriate design.
  • It becomes crucial for businesses to have a thorough grasp of their customers in order to develop goods that meet their expectations.
  • To satisfy client expectations and still be cost-effective, products must undergo a thorough assessment.

Production Controlling and management

  • It also becomes crucial to select the appropriate production procedures for a certain product. Making decisions on the best kind of machinery and technology, the necessary capital expenditure, and other issues is necessary. Before manufacturing, planning is required.
  • The quantity of output, the order of the operations management, and other choices are all planned. The process of mapping out the steps necessary for a seamless workflow is known as routing.
  • The production manager is in charge of production control. The actual procedure is compared and contrasted with the established blueprint to map out any essential deviations from the original plan and to identify and fix any flaws.
  • Manufacturing activity is scheduled to establish benchmarks for when to start and when to finish.
  • Additionally, inventory management and cost control must be addressed. The production schedule is the distribution of resources like labor, materials, and other activities.

Know the tools to improve your product through Product Management Tools Blogs.

Machine maintenance and replacement

  • To guarantee the effective and seamless operation of production processes, production management is responsible for the maintenance and replacement of machinery and equipment.
  • To avoid speed breaks and production halts, the production manager and crew take care of this.

Importance of Production Management

  • Reduces the possibility of product failure
    • In order to appraise the market and lower the likelihood of failure, a clear roadmap should be prepared along with data and assumptions.
    • A product will be less likely to fail if its designers are aware of the demands and wants of the market.
    • Product management reduces failure but it can’t guarantee success like anything else.

Optimal use of resources and funds

  • Production management maximizes resource use while reducing production costs to the absolute minimum.
  • Utilizing time and resources efficiently is made possible by a clear blueprint, reducing the gap between input and output.
  • It will be possible to manage processes effectively and maximize workforce efficiency by evaluating production processes and maintenance downtime.
  • High-quality goods, a quicker rate of manufacturing, and a lower cost per unit are the outcomes of a well-designed production function.

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.

Understand the importance of quality planning: Recognize the significance of quality planning in ensuring that products, services, and processes meet or exceed customer expectations.


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.) and what makes them 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.

Your doubts get resolved on Intellipaat’s Community Page!

Course Schedule

Name Date Details
Project Management Courses 22 Jun 2024(Sat-Sun) Weekend Batch
View Details
Project Management Courses 29 Jun 2024(Sat-Sun) Weekend Batch
View Details
Project Management Courses 06 Jul 2024(Sat-Sun) Weekend Batch
View Details

About the Author

Senior Content Manager - Content and Content Marketing

Mohammad Waseem is a Senior Content Manager with a passion for crafting profound narratives. With a background in content and content marketing, he blends creativity with strategy to captivate audiences. His experience in content creation resonates across various platforms and gets lakhs of views, showcasing his expertise in content strategizing.