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Difference Between Production and Operations Management

The primary concern of every business is to develop goods and services to meet customer demands. Both production and operations management are terms associated with the manufacturing side of business operations. Production management is about managing activities associated with the production of goods.  

Meanwhile, operations management is one step ahead of production management. It must be noted that production management is a part of operations management. Operations management refers to managers administrating business operations. 

The difference between production and operations management often gets blurred. At times, the two terms are thought to be interchangeable, but they are not. Dig into this article to understand in detail about operations management and production management: meaning, importance & functions.

What is Operations Management?

Operations management is the monitoring, design, and prepping of business operations. The primary goal of operation management is to improve the quality of business operations. Due to a delivery-focused approach, operations management is focused on efficiently converting inputs into outputs. Production and operations management involves the management of resources needed to produce and distribute goods and services.

The administration of production, manufacturing, and service provision in an organization is a part of operations management. Operation management is more concerned with streamlining processes to leverage resources as efficiently as possible. Operations managers require knowledge about different project management tools to smoothly perform their responsibilities. 

As per production vs operations management, production management mainly focuses on cost and quality control while operations management looks into how a company can improve customer satisfaction.

What is Production Management?

Production management is the study of the planning, coordinating, controlling, and guiding of an organization’s production activities. It is associated with the transformation of raw materials into finished goods as well as the determination of the final product’s overall quality. Its primary goal is to produce goods and services of the appropriate quality and quantity at the appropriate time and at the lowest possible cost. Many people think that production and operations management are one and the same, but they are in fact two different fields. So, you must understand the difference between production and operations management.
production and operations management
When you understand “what is product management,” you will realize that it is crucial for organizations to consistently deliver high product quality. It improves the reputation of any business by offering products and services that meet customer requirements. The efficient usage of resources prevents the deterioration of the final product and reduces production costs, which makes the final product available to customers at a lower cost. Moreover, you must learn about these differences between  production vs operations management to make the right decision.

Uses of Operations Management

Like a product management course, an operations management course offers knowledge about the relevant processes. The primary uses of operations management are as follows:

  1. Strategic planning: Operations management revolves around strategic planning to ensure maximum utilization of resources.
  2. Finance: Operations management is all about ensuring that a business is using capital resources efficiently during production.
  3. Production design: Operations management also revolves around creating product designs that meet customer needs and abide by market trends.
  4. Forecasting: Operations management is also used for predicting how products or services will perform in the future and how customer requirements will change with time. 

Uses of Production Management

Do you know how product managers are vital for the success of any business? Keep reading to understand the importance of production management in a business:

  1. Production control: The production management process ensures that the correct plan is used while manufacturing goods and services.
  2. Cost and quality control: Production management ensures that customers get high-quality products at low costs. 
  3. Scheduling: Production management is crucial for formulating the beginning to end of the production process. 
  4. Machinery maintenance: Production management ensures that the manufacturing equipment and machinery are in the best condition without any defects.

Continue reading to learn all the difference between production and operations management.

Production Vs Operations Management

Here are the major distinction between production vs operations management

Basic for Comparison Production Management Operations Management
Definition It revolves around managing all production activities.  It revolves around the management of complete overall business operations, including production and post-production stages.  
Scope of Operation Scope is limited because it focuses on the design, pricing, quality, and quantity of goods production Broader scope because operations management revolves around routine business activities like workforce management, inventory management, and more
Objective Ensures that the right quality of products are produced at the right time Focused on leveraging organizational resources in the most effective way to meet customer requirements
Area of Decision-Making Relevant specifically for different aspects of production Relevant for daily business operations in any organization
Capital Requirement Revolves around high capital requirement initially Less capital requirements.
Skills Required Technical skills, IT skills, project management skills, communication skills, and confidence Leadership skills, data entry and processing skills, decision-making skills, conflict management skills, and organizational skills
Challenges Meeting deadlines without compromising quality is a major challenge for production managers Development of technology and innovative business models pose new challenges to operations managers
Advantages Delivering high quality products on time at low costs Utilization of resources to improve regular business operations and improving business reputation
Prevalence Applicable only in organizations where products are manufactured Applicable in all types of organizations like banks, hospitals, and more

Conclusion

Both production managers and operations managers are crucial parts of an organization aiming to perfect their manufacturing process. If you want to pursue a career as any one of these professionals, you must understand the differences between production vs operations management. Developing the right skills and knowledge is crucial for performing all tasks associated with production and operations management. So enroll in a relevant course today to kickstart your career! Understanding the difference between production and operations management will help you make the right choice.

FAQ's

In the debate between production vs. operations management, the latter has a wider scope. Production management has a limited scope because it revolves around making decisions according to the pricing, design, quality, and quantity of the product. Operations management has a wider scope because it focuses on managing business activities like workforce management, logistics, maintenance, inventory management, and more.
A production manager is responsible for supervising production processes and coordinating different activities to ensure adequate resources are available on hand. They often plan worker schedules, prepare budgets, predict costs, and more to guarantee the completion of production processes on time. An operations manager supervises operational activities at different levels of an organization. Their responsibilities involve recruiting and training employees and running quality assurance programs. They are also tasked with strategizing process improvements to make everyone complete their work on schedule.
As per production vs operations management, the processes involved in production management include production control, cost and quality control, scheduling, and machinery maintenance. The different processes involved in operations management include strategic planning, financial planning, product design, and forecasting.
In terms of difference between production and operations management, production management revolves around transforming different resources into a value-added product efficiently. But operations management ensures that there is minimal wastage of available resources by focusing more on optimizing processes.
The different KPIs useful for measuring the success of product management and operations management are as follows:
  • On-time delivery: On-time deliveries are crucial for manufacturers to keep customers happy. A high delivery success rate is useful for keeping current customers happy and attracting new ones.
  • Total cycle time: It refers to the time taken for a customer order to be complete. It measures the required time from the beginning of production till shipment.
  • Throughput: It helps understand how well the machines are producing. The throughput can be determined by dividing the total time of production by the number of units produced. 
  • Order status: Tracking the status of orders is crucial for ensuring customer satisfaction. The order status revolves around whether an order has been shipped, received, or canceled. 
The different metrics for production management and operations management as per the difference between production and operations management can help with tracking the progress of management procedures.

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