Difference Between Production Management and Operation Management

Top 4 Difference Between Production Management and Operation Management

Production management and operation management primarily focuses on managing and using the resources of an organisation to maximise its capabilities. Production management stands for managing activities that are related to production. Whereas, operation management takes a step further and manages the administrations and business operations related to manufacturing and other activities.

Production management is a subset of operation management. However, before proceeding to the difference between production management and operation management, a detailed and separate understanding of these two concepts is necessary.

Production Management

Production management means applying the principles of management to build an effective outline for production. It involves various tasks like planning, supervising, scheduling, and enforcing adequate regulation to maximise output. In a nutshell, it is an efficient use of an organisation’s resources to turn raw materials into products. 

Furthermore, production management includes making a decision related to raw materials, quality and quantity, design of the product, packaging, and pricing. A production manager is a person who is in charge of making these decisions and ensuring that the product matches the required quality standards. 

This management technique plays an integral part in the success of a business. It aids a company to maximise its production without compromising in the quality of the final product. Some critical functions of production management are –

  1. It has total control over production; the production manager draws up the basic plan for this purpose. 

  2. Production management enforces scheduling to manage the production efficiently.

  3. It ensures that a company keeps on producing quality products at a minimal cost.

  4. Last but not least, it takes care of the health of machinery involved by scheduling regular maintenance and repairs.

Operations Management

Operations management applies the principles of management to manage the everyday activities of a company. Therefore, it guarantees smooth and effective running of an organisation. It involves planning, designing and supervising production as well as other non-production activities.

Additionally, the primary objective of operations management is to ensure the optimal use of a company’s resources and decrease wastage. Moreover, it seeks to deliver the right product to customers by involving every department of a company to work in harmony.

Furthermore, operations management is vital for a business to improve its overall efficiency as well as delivering quality products. Here are some essential functions of operations management –

  1. It develops a strategy that allows a company to maximise its resources and increase its foothold in the market in which it is operating.

  2. An effective management strategy here can improve a company’s financial standing.

  3. It helps companies to develop products as per the market requirements and current trends.

  4. Operation management also aids in developing a future outline of the company. It takes into consideration changes in market and customer behaviour to provide this forecast.

Now that you know what is production and operations management, here is a comparative study that outlines their differences.

Difference Between Production Management and Operation Management

Here are the primary differences between these two vital factors behind the successful running of a company –

  1. Definition

Production management is part of operations management. However, when you define production and operation management, you can see that they are two very different concepts indicating two different purposes. Production management primarily deals with factors associated with the production of goods and service.

On the other hand, operations management comprises managing production as well as the administration of a business. It ensures a smooth production and delivery system of products at minimum cost without compromising on quality.

  1. Scope of Operation

Scope of operation is a significant point of difference between production and operation management. Production management’s operational scope is limited to production. With its help, a production manager creates a compelling production strategy in an attempt to maximise a company’s potential.

Contrarily, the scope for operation management is much broader as it deals with every aspect of a company. An operations manager is responsible for formulating a strategy that will ensure the proper use of every company resource. Moreover, he/she has to look after non-production areas like product design, human resources, inventory, logistics, waste management, etc.

  1. Objective

Objectives of production and operation management are crucial to their difference. Production management aims to provide the best quality product at minimal cost and on time. In contrast, the objective of operations management is to ensure the best use of company resources.

  1. Where It is Prevalent

Production management is found in companies that manage a production unit. Whereas, operations management is found in every business, whether it has a production unit or not.

There are several differences between these two concepts, as mentioned above. However, the importance of production and operation management is unquestionable for a business to attain success. 

While production management takes care of the entire production unit and ensures its efficient performance. Operations management, at the same time, manages the other non-production factors also. 

It ensures that the company delivers the best product at the best prices. Therefore, for a company to become successful in a highly competitive market, these two aspects have to work for hand in hand and effortlessly.

Difference between production management and operation management is a vital topic for every commerce student. Furthermore, students who want to learn more on other topics of commerce can visit the official website of Vedantu.

FAQ (Frequently Asked Questions)

1. What is Operation Management?

Ans. Operations management is efficiently managing every aspect of a company, be it production or non-production. Thus, it ensures optimal usage of every resource of an organisation and delivers the best products to customers.

2. What is Production Management?

Ans. Production management is proficiently managing the production unit of a company. Therefore, it ensures that a company is producing the best product without compromising on quality.

3. What is the Operation Strategy in Operations Management?

Ans. Operations strategy is a process via which vital operational decisions are made that are in line with the overall objective of a company.

4. What is a System View of Operation Management?

Ans. System view classifies the activities of an operations system in three categories – inputs, transformation process and output.