Top 5 Difference Between Production Management and Operation Management

The main objective of a business is to produce goods and services to meet the needs of customers. Production Management and Operation Management are technical terms that are most often encountered by the students of Management and Commerce. Both these terms are related to the manufacturing side of business operations.

What is Production Management?

Production management is the field of study that deals with planning, organizing, controlling and directing the production activities of the organization.

It deals with the conversion of raw materials into finished products and also with determining the quality of the finished good. Its primary objective is to produce goods and services which are of the right quality, quantity and is produced at the right time with minimum cost.

The importance of production management for an organisation is as follows

  1. Helps the organization achieve its production objectives.
  2. Helps in maintaining organization goodwill, reputation and image in the market.
  3. Introduces new products in the market.
  4. Ensures all production resources are used optimally.

What is Operation Management?

Operation management is the field of study that deals with supervision, design and planning of business operations. The main objective of operation management is to enhance the quality of business operations.

It is delivery-focused which means the emphasis is on successfully turning inputs into outputs in the most efficient manner. Operation management involves the administration of production, manufacturing and provision of services in an organisation.

Operation management is focused more on processes and how they can be optimized so that there is minimum wastage of available resources.

The following table will highlight the most important differences between production management and operations management. It will be helpful for students to grasp the idea in a better way.

Basis of Comparison Production Management Operation Management
Definition Production management is about managing activities related to production only Operation management is about the management of overall business operations which includes production and post-production stages
Area of Decision making Related to aspects of production only Related to the regular business activities in an organization
Objective The objective of production management is to produce the best goods or services that are of the right quality, right quantity at the right time The objective of operation management is to utilize the resources in the most optimum way
Found In It is found in enterprises where production is undertaken It is found in places like Banks, Hospital, Companies etc which are providing service
Capital Requirement More capital requirement initially Fewer capital requirements

This article discusses a valuable topic for Commerce students which involves highlighting the differences between Project Management and Operation Management. Stay tuned to BYJU’S for more such exciting articles.