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5 Min. Read

Production Management: Definition & Importance

Production Management: Definition & Importance

In the manufacturing industry, optimizing production management can be incredibly important. Production management is a way for you to plan and control all your internal processes to ensure everything runs smoothly. It can be similar to operations management depending on what your business does.

Have you been searching for ways to make your production processes more efficient? Maybe you want to try and streamline your processes or identify areas that need to get improved. Whatever the reason, understanding how production management works can significantly help your business.

Here is everything that you need to know about production management and why it’s important.

Here’s What We’ll Cover:

What Is Production Management?

Key Areas of Production Management

Why Is Production Management Important?

Key Takeaways

What Is Production Management?

To keep things simple, production management is planning, organizing and executing production activities. The main goal is to try and convert your raw materials into a finished product as efficiently and productively as possible. It can increase production capacity and ensure you meet production deadlines.

Ultimately, you want to optimize how efficient your manufacturing processes are. The main function is to find the right quality, quantity, time and cost when it comes to raw materials. Sometimes, production management can include bringing together the following things:

  • Men
  • Money
  • Machines
  • Materials
  • Methods
  • Markets

These come together to help optimize your production quantity. Plus, they ensure you provide your customers with the products they want and need. The products will get delivered when they’re required by the market and at the lowest possible cost.

Key Areas of Production Management

The primary goal of most manufacturing businesses is to maximize their profit. This is done by having an efficient and well-designed production process that can always get improved. For this to happen, however, there needs to be excellent production management to understand any gains and apply them to your bottom line.

Production management requires you to coordinate and supervise people, equipment and materials. And there are four key areas for you to focus on.

Production Planning

This is going to happen before you move forward with anything else. It’s the time where you’re going to produce the master schedule and it will require you to decide when production will start. You can include things like which machines or equipment will get used and which facilities are needed.

Production planning is doing to differ from business to business. This is since different types of products are going to get produced at different speeds. Plus, different products can require numerous inputs in order to complete. Your overall product mix is going to play an important role in production planning.

Production Control

You have put together your production plan, but do you know how you’re going to control production? This is going to be the floor level process where managers direct employees and assign equipment to manufacture products. It’s worth keeping in mind that this process involves achieving quality standards. As well as monitoring production speeds compared to established run times.

Process Improvement

It’s great that you have put some things into place, but there is still a need to monitor and drive continuous improvement. Try and identify areas that might be causing bottlenecks or are causing your processes to be inefficient. Your processes won’t be static, so continually improving your floor-level processes is important.

Equipment Maintenance

Your equipment is just as important as your employees getting properly trained. Most manufacturing businesses require the use of equipment. Ensuring they’re maintained can make a huge difference. Maintenance costs can usually get included in the full cost of finished goods. And this is especially the case for manufacturers that use a cost-plus system to set prices and determine costs.

Why Is Production Management Important?

There are several reasons why production management is important to know and understand. Without effectively managing your floor-level production processes, mistakes and inefficiency can become common. Here are some other common reasons why production management is important to your business operations.

  • It reduces manufacturing costs
  • It improves competitiveness in the market
  • You have a better chance of accomplishing business objectives
  • It can significantly improve your overall brand image
  • You can optimize the use of all your resources

Implementing effective production management is critical. If you don’t, you won’t be able to meet certain commitments or reach your sales targets. A well-thought-out production management solution can lead to a number of benefits.

Key Takeaways

Production management is the process of planning, organizing and executing production activities. The primary goal is to take your raw materials and convert them into finished products as efficiently as possible. This includes finding the right quality and quantity, optimizing time and limiting costs.

A sound production management process can provide your business with several benefits. You can achieve better quality products, lower your waste levels and reduce your operating costs. Understanding your processes allows you to make better business decisions in the future.

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