Understanding Production and Operations Management
Importance of Production Function and Production Management
Successful organizations have well defined and efficient line function and support function. Production comes under the category of line function which directly affects customer experience and there by future of organization itself.
Aim of production function is to add value to product or service which will create a strong and long lasting customer relationship or association. And this can be achieved by healthy and productive association between Marketing and Production people. Marketing function people are frontline representative of the company and provide insights to real product needs of customers.
An effective planning and control on production parameters to achieve or create value for customers is called production management.
Operations Management
As to deliver value for customers in products and services, it is essential for the company to do the following:
- Identify the customer needs and convert that into a specific product or service (numbers of products required for specific period of time)
- Based on product requirement do back-ward working to identify raw material requirements
- Engage internal and external vendors to create supply chain for raw material and finished goods between vendor → production facility → customers.
Operations management captures above identified 3 points.
Production Management v/s Operations Management
A high level comparison which distinct production and operations management can be done on following characteristics:
- Output: Production management deals with manufacturing of products like (computer, car, etc) while operations management cover both products and services.
- Usage of Output: Products like computer/car are utilized over a period of time whereas services need to be consumed immediately
- Classification of work: To produce products like computer/car more of capital equipment and less labour are required while services require more labour and lesser capital equipment.
- Customer Contact: There is no participation of customer during production whereas for services a constant contact with customer is required.
Production management and operations management both are very essential in meeting objective of an organization.