Answer:
Production may be defined as the conversion of inputs – men, machines, materials, money, methods and management (6 Ms) into output through a transformation process. Output may be goods produced or services rendered.
“Goods produced” is for the manufacturing concerns and “services rendered” is for the service operation units such as banks, hospitals, hotels/restaurants, etc. In this sense, production management may be viewed as operations management.
Production is a primary business function along with marketing and finance, other management areas being HRD (Personnel & Industrial Relations) and Materials Management, etc. Marketing establishes the demand for goods and services, finance provides the capital and equipment while production actually makes the goods or services. In this sense, it plays a vital role in achieving a firm’s strategic plans or goals.
Further, as the production function produces the goods and services, it typically involves the greatest bulk of the companies’ employees and is responsible for a large portion of the firm’s assets.
Moreover, production has a major impact on the quality of the goods and cost of production. In this respect, production is a visible face of the company and is thus the central function of an organisation and hence, we may call production as the heart of any organisation.
