Production Management:

Production management is the management of an organization's production systems, which converts inputs into the product and services. A production system takes inputs which include material, personnel, machines, building, technology, cash money, information and other resources whereas the outputs include the product and services. Thus, production management is the study (practices) of planning, designing, and production systems and subsystems to achieve the goals of an organization. A call centre company who wants to efficiently utilize the call answering staff to avoid long waits and improving the forecast accuracy would like to take steps to forecast the number of calls received during each work shift.

These situations are some instance of production management decisions. All in all, production management decisions should be taken effectively and efficiently lest it can hurt a company's competitive position and increase its production costs. Good production management decisions may improve profitability and growth. So, understanding the basic concepts of production management is a key to better production management.

Objectives

After studying this unit, you should be able to

• understand production strategy,
• learn development phases of production management,
• describe elements of production strategy, and
• Explain the importance of forecasting in production management.