Which term describes the management of activities from all organizations involved in the production process?

On the other hand, operations management is a step ahead of production management, or it can be said that the production management is a part of the operations management. Operations Management, as the name suggests is the administration of business operations, by the managers of the organization.

The difference between production and operations management is very thin and blurred, which is simplified in this article in a detailed manner.

Content: Production Management Vs Operations Management

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

Definition of Production Management

When the principles of management are applied to the production function of the organisation, it is known as production management. It is a process of planning, scheduling, supervising and controlling the activities involved in the production of goods and services, i.e. the transformation of various resources into the value-added product, in an efficient manner.

In this process, the decision regarding the quality, quantity, price, packaging, design, etc. are taken by the production manager, so as to ensure that the output produced confirms the specifications.

Areas of Production Management

Definition of Operations Management

Operations Management implies the management of day to day business activities, so as to ensure smoothness and effectiveness of operations in the organization. It involves administration of production, manufacturing and provision of services in an organisation.

Operations Management is that branch of management, that deals with designing, implementing and controlling the production process, i.e. converting inputs into the output, using resources, in order to provide desired goods and services to customers while adhering to the policies stated by the management of the organisation.

Operations Management is all about the optimum utilization of company’s resources, i.e. the resources must be utilized as much as possible, by minimizing the loss, wastage and underutilization.

The difference between production and operation management, are presented hereunder:

1. Production Management can be defined as the administration of the set of activities concerning the creation of goods or transformation of raw material into finished goods. Conversely, Operations Management is used to mean that branch of management which deals with the administration both production of goods and provision of services to the customers.
2. In production management, the manager has to make decisions regarding the design, quality, quantity and cost of the product manufactured by the department. On the contrary, the scope of operations management is larger in comparison to the production management wherein the operations manager looks after the product design, quality, quantity, process design, location, manpower required, storing, maintenance, logistics, inventory management, waste management, etc.
3. Production Management can only be found in the firms where production of goods is undertaken. Unlike, one can find operations management in every organization, i.e. manufacturing concerns, service-oriented firms, banks, hospitals, agencies, etc.
4. The basic objective of production management is to provide the right quality goods in the right quantity at right time and best price. In contrast, operations management aims at making the best possible use of organization’s resources, in order to fulfil the customer’s wants.

Conclusion

Production and Operations Management are so closely intertwined, that it is quite difficult to differentiate the two. Production management covers administer all the activities which are involved in the process of production. On the other hand, operations management entails all the activities involved in the production of goods and delivery of services such as material management, quality management, maintenance management, process management, process design, product design and so on.

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Quality management is the act of overseeing all activities and tasks that must be accomplished to maintain a desired level of excellence. This includes the determination of a quality policy, creating and implementing quality planning and assurance, and quality control and quality improvement. It is also referred to as total quality management (TQM).

In general, quality management focuses on long-term goals through the implementation of short-term initiatives.

• Quality management is the act of overseeing all activities and tasks needed to maintain a desired level of excellence.
• Quality management includes the determination of a quality policy, creating and implementing quality planning and assurance, and quality control and quality improvement.
• TQM requires that all stakeholders in a business work together to improve processes, products, services and the culture of the company itself.

At its core, TQM is a business philosophy that champions the idea that the long-term success of a company comes from customer satisfaction and loyalty. TQM requires that all stakeholders in a business work together to improve processes, products, services and the culture of the company itself.

While TQM seems like an intuitive process, it came about as a revolutionary idea. The 1920s saw the rise in reliance on statistics and statistical theory in business, and the first-ever known control chart was made in 1924. People began to build on theories of statistics and ended up collectively creating the method of statistical process control (SPC). However, it wasn't successfully implemented in a business setting until the 1950s.

It was during this time that Japan was faced with a harsh industrial economic environment. Its citizens were thought to be largely illiterate, and its products were known to be of low quality. Key businesses in Japan saw these deficiencies and looked to make a change. Relying on pioneers in statistical thinking, companies such as Toyota integrated the idea of quality management and quality control into their production processes.

By the end of the 1960s, Japan completely flipped its narrative and became known as one of the most efficient export countries, with some of the most admired products. Effective quality management resulted in better products that could be produced at a cheaper price.

The most famous example of TQM is Toyota's implementation of the Kanban system. A kanban is a physical signal that creates a chain reaction, resulting in a specific action. Toyota used this idea to implement its just-in-time (JIT) inventory process. To make its assembly line more efficient, the company decided to keep just enough inventory on hand to fill customer orders as they were generated.

Therefore, all parts of Toyota's assembly line are assigned a physical card that has an associated inventory number. Right before a part is installed in a car, the card is removed and moved up the supply chain, effectively requesting another of the same part. This allows the company to keep its inventory lean and not overstock unnecessary assets.