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Production Management: Meaning, Importance & Functions

Production management refers to the process of planning and managing the activities of a business to achieve the desired outputs of products and services. Production management maximises resource utilisation while lowering production costs. A clear plan makes it possible to utilise resources and time effectively, reducing the gap between the production process and the final product. Organizations that must compete in the market might benefit greatly from production management. Process efficiency is increased, and the business is able to deliver high-quality goods and services. But what exactly is production management? What are Production management functions? This blog post will explore the production management functions and concepts relating to it 

What is Production Management?

The position and task inside an organisation that is in charge of a product’s overall success is called product management. Functions of production management is to ensure that the product best satisfies the company’s financial and strategic objectives, product managers collaborate with groups both inside and outside the organisation to develop and implement a plan.

Functions of Production Management

Production management has to perform a variety of functions to ensure effective & seamless business growth. Here are some key functions of a production management.
production management

  • Product and Design Selection: The proper product is first chosen for manufacture by production management. The appropriate design for the product is then chosen. Because the company’s survival and profitability depend on the product and design chosen, care must be taken. The proper design must be chosen once the right product has been chosen. The design must adhere to the specifications provided by the client.
  • Production Process Selection: The proper production procedure must be chosen by production management.  Production management makes it simple to adopt various technology, equipment, a material handling system, etc for better results in business.
  • Production Capacity Selection: To match the demand for the product, production management must choose the appropriate production capacity. This is so that difficulties won’t be caused by excess or a lack of capacity.
  • Planning The Production: Routing, which refers to determining the flow of work and the order of operations, and scheduling, which refers to deciding when to begin and when to finish a certain production activity, are both included in production planning.
  • Production Control: Production management helps the organisation select the right product and also monitoring and controlling production.
  • Cost and quality control: this includes ensuring standards of quality and maintaining costs.
  • Inventory Control: This is another important phase of production management. This means not overstocking or understocking but maintaining the right levels of inventory.

Role of Product Managers

A product manager describes what success looks like for a product, pinpoints the consumer need and bigger corporate goals that a feature will address, and rallies a team to make that vision a reality. You are the go-to resource for the product as its manager. They play a significant role in every step of the process and take ownership of it. Here are some major roles & responsibilities of a production management.

  • Selection of Product and Design

    It describes the creation and implementation of a new product strategy or product with a competitive edge to meet market demands. Differentiation, low cost, quick reaction, or a mix of these can be used to create a competitive edge. Big companies’ effective product selection approach involves concentrating on a small number of products.

  • Production Controlling and Management

    Production control and management is a very crucial part of production management. Production control is the process of anticipating, planning, and scheduling work while accounting for labour, material availability, other capacity constraints, and cost in order to achieve the desired quality and quantity at the time it is required. The schedule is then monitored to ensure that the plan is carried out.

  • Machine Maintenance and Replacement

    production management is responsible for the maintenance and replacement of machinery and equipment for effective and seamless production process. Regularly scheduled service, routine inspections, and both planned and unplanned repairs can all be considered part of machine maintenance. Parts that are worn, damaged, or out of alignment may also need to be replaced or realigned. Machine maintenance can be carried out both before and after a failure.

Importance of Production Management
Production management not only improves certain areas of your business, but it is essential for overall business growth and development. Here are some of the points indicating the importance of production management:
production management

  • Efficient Use of Capital and Resources

    Production management maximises resource utilisation while lowering production costs. A clear plan makes it possible to utilise resources and time effectively, reducing the gap between the production process and the final product.

  • Competitive Edge

    Organizations that must compete in the market might benefit greatly from production management. Process efficiency is increased, and the business is able to deliver high-quality goods and services.

  • Minimizes Risk of Product Failures

    Lesser Risk of Failure: Understanding the demands and wants of the market will lessen the likelihood that a product will fail. In the end, production management, like anything else, does not ensure success but does help to mitigate it.


Example of Production Management

A simple example explaining the functions of production management could be a factory that makes shoes. Depending on the seasonal demand forecast, the production team manufactures shoes using the correct amount of raw materials. The product is then dispatched to customers and retailers via a well-knit supply chain. You can also explore more about the role of a full-stack developer in a production environment.

Risks Associated with Poor Production Management

  • Higher costs
  • Lower profits
  • Incorrect forecasts
  • Inability to meet the demands
  • Surplus items
  • Wasted time and resources

What Role Does Technology Play in Production Management?

  • Increase in productivity
  • Increase in speed and flexibility
  • Increase in efficient processes
  • Streamlined supply chains
  • Cost saving
  • Forecast of demand

Skills Required for Effective Production Management

The abilities that enable this individual to carry out a productive manufacturing process are production manager competencies. They comprise technical knowledge specific to a given product or industry and soft skills that support an effective production process. Interpersonal skills, leadership abilities, and problem-solving abilities are three of the most important soft skills for a production management. Learn more about how product managers are vital for the success of any business. If you are willing to start your career in production management, check out this excellent production management course by Hero Vired.


One needs to have proper production management procedures in place to ensure the seamless functioning of the manufacturing and production processes. This procedure also makes sure that the required quantity of resources is employed and there is no surplus or shortage. When processes are aligned with the goals, it gives the company a competitive advantage and improves the profit margins. For better understanding, here is a comprehensive guide to product management in 2023.


  1. What are the key responsibilities of a production manager?

    • Formulate production schedule
    • Supervise production processes
    • Supervise equipment and maintenance
    • Estimate the budget and costs
    • Confirm the quality meets the set standards
  2. How does production management contribute to the success of a business?

    It seeks to maximise earnings while reducing production costs. It guarantees that both capital and resources will be utilised effectively and fully. As a result, the business is able to provide more returns faster and at a lower cost.

  3. What skills are required for an effective production management team?

    The skills required for a successful production management are include leadership, attention to detail, knowledge, and teamwork. 

  4. What are some common production management techniques?

    Some of the techniques are just in time, materials requirement planning and flow control.

  5. What is the difference between production management and operations management?

    Production management focuses on activities around the product, whereas operations management focuses on the management of operations.

  6. How can production management be used to reduce costs and increase efficiency?

    Production management ensures less surplus and a better supply chain network, along with more productivity, thus reducing costs and increasing efficiency.

  7. What are the risks associated with poor production management?

    Poor production management can lead to wastage of time and resources, lesser profits, surplus items, and higher costs, along with an inability to meet demand.

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