An Overview of Operations Management

Every business either offers a service or sells a product. People are served by even non-profit organizations. You must ensure that your product/service is of sufficient quality and value for your clients to acquire it. As a result, the process of developing a product or service is critical. 

 

Because of its multidisciplinary character, operations management might be misconstrued at times. However, their functions are the lynchpin of enterprises all over the world, and success is frequently dependent on them.

 

Customers will be drawn to high-quality products or services, which will provide you a competitive advantage in the market, raise revenue, and position you as a leader in your field.

 

What is Operations Management? - A Basic Overview

 

People management is essentially what operations management is. Most corporate divisions are focused on achieving very particular objectives - marketing aims to increase sales, HR aims to keep employees happy, and so on.

 

On the other hand, operations management entails making the most of your company's resources. People (performing more work that adds value), technology (maximum efficiency in production, for example), equipment (allowing employees to do more work), and so on are examples of this. 

 

In the context of production, manufacturing, or service supply, operations management is primarily concerned with planning, coordinating, and supervising. As a result, it is delivery-oriented, guaranteeing that an organization efficiently converts inputs to outputs.
 

Materials, equipment, and technology, as well as human resources such as employees or workers, could all be considered inputs.

 

Goal of Operations Management

 

The purpose of operations management is to maximize efficiency while producing goods and services that meet client needs effectively. Numerous operational decisions must be made that affect the organization's ability to provide goods and services that offer value to customers in the long and near term. 

 

If the company has made generally sound operational judgments in building and implementing its transformation system to satisfy consumer expectations, its chances of long-term survival are considerably improved.

 

For instance, if a company manufactures furniture, some of the operations management considerations include:

 

Purchasing wood and fabric, employing and training workers, determining the location and layout of the furniture factory, and purchasing cutting tools and other fabrication equipment are all steps in the process.

 

If the company makes solid operational judgments, it will be able to produce affordable, usable, and appealing furniture that customers will buy at a profit.

 

Also Read | Production Management

 

What is the Role of an Operations Manager?

 

An operations manager, often known as a chief operating officer or COO, is in charge of the company's overall operations and processes. Process design, standard management, process improvement and optimization, and critical firm strategy decisions are all part of the job description. 

 

Additionally, operations managers possess a unique combination of talents, including organization, efficient communication, and strategic thinking, that enable them to effectively carry out their responsibilities.

 

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Different steps involved in Operations Management

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1. Process optimization and improvement

 

Process improvement and optimization entails operations managers examining the phases in a process and either restructuring or completely re-creating the process to optimum efficiency. In most cases, these procedures necessitate the use of human labor.

 

2. Create a Process

 

The invention of new procedures to manage the business's needs efficiently is known as process design. Designing and deploying a new accounting system to track expenditures is an example.

 

3. Interaction between departments

 

Operations managers work with all of the company's departments. In most firms, the department of operations management is one of the few cross-departmental positions. 

 

As a result, operations managers must be knowledgeable about or have experience in many aspects of the firm. Many operations managers begin their careers in a variety of departments before advancing to the position of operations manager.

 

4. Typical Management

 

Day-to-day management methods such as budgeting, personnel control, and firm supply and equipment upkeep are all standard management practices. Create a schedule for equipment maintenance with a clear and exact checklist for employees to use as an example.

 

5. Planning and Strategy

 

High-level thinking and planning are the responsibility of operations managers. Identifying departments or specific processes within departments that require redesigning and outsourcing the review of that process to members of the operations management team are examples of strategies.

 

6. Oversight of Labor

 

Employees' activities and actions are monitored by operations managers to ensure that their job is as efficient as possible. Assessing the packaging process for a company's product and upgrading it to take less time is an example.

 

Also Read | Business Process Management

 

Importance of Operations Management

 

Smaller businesses have very simple and easy processes. Everyone helps to manage the processes, and everything runs smoothly for the most part.

 

However, this does not apply to businesses with more than 20 employees. That's when things start to get tricky. You can't just rely on your employees to perform a good job; you need standardized procedures in place to ensure that everything runs smoothly.

 

Operations management, when done well, can lead to-

 

1. Higher Earnings — By combining the first two, you may improve the bottom line of your firm and increase profits.

 

2. Better Output - The operations manager improves and optimizes procedures that have a significant impact on the product or service. This usually results in increased output, decreased defect rates, and lower costs, among other things.

 

Better output leads to a better product or service, which gives you a competitive advantage. This allows your company to stand out from the crowd and attract new customers.

 

Also Read | Steps in the Product Management Process

 

 

Types of Management Decisions in Operations

 

All management operations, including operation management, need decision making, both strategic and tactical. There are five different sorts of operational management decisions:

 

1. Capacity, location, and layout

 

Operation managers assist in determining the system's capacity, the location of additional facilities, departmental organization, and the physical layout of a facility.

 

2. Process

 

All actions that create products and services require a process. Operation Management, for example, makes judgments regarding the sorts of work to be done in-house, the level of automation to be used, and how to improve existing processes.

 

3. Choosing a Strategy

 

Operation management aids in determining the company's overall strategies and conflicting priorities, as well as how to best create procedures that align with those priorities.

 

4. Decisions Regarding Operations

 

Operation management makes decisions about supply chain management, inventory management, aggregate planning, resource planning, lean systems, and timetables, among other things, at this level.

 

5. Quality

 

All processes and work activities are based on quality issues. Operations management aids in the establishment of quality objectives and the search for ways to improve product and service quality.

 

How Does the Supply Chain Depend on Operation Management?

 

A  fundamental component of operations management is Inventory management across the supply chain. To be an effective operations management specialist, one must be able to comprehend the processes that are critical to a company's operations and get them to flow and operate together smoothly. 

 

The collaboration required to set up efficient corporate processes necessitates a thorough understanding of logistics. An operations management expert is familiar with local and worldwide trends, client demand, and production resources. 

 

To meet customer expectations, operations management approaches the purchase of resources and the employment of labor in a timely and cost-effective manner. Inventory levels are kept track of to guarantee that there aren't any excesses on hand.

 

Operations management is in charge of locating vendors who can provide the necessary items at a fair price and deliver the product on time. The delivery of items to clients is another important aspect of operations management. 

 

This involves making certain that things are delivered within the agreed-upon time frame. Customers are usually followed up by operations management to ensure that the items fulfill their quality and functionality requirements. Finally, operations management compiles all of the feedback collected and distributes it to each department for process improvement.

 

Also Read | Top Supply Chain Management (SCM) Tools

 

 

What Are Some OM Systems?

 

Business process redesign (BPR), reconfigurable manufacturing systems, Six Sigma, and lean manufacturing are the four paradigms that underpin modern operations management. BPR focuses on assessing and creating a company's workflow and business processes. 

 

BPR's mission is to assist businesses in drastically restructuring their organizations by creating business processes from the ground up. Reconfigurable manufacturing systems are built to accommodate rapid changes in the structure, hardware, and software.

 

This enables systems to quickly react to market or intrinsic system changes in terms of their capacity to continue producing and how efficiently they function. Six Sigma is a quality-oriented methodology. The control limits, which are set at six standard deviations from the normal distribution mean, are referred to as "six." 

 

Trending charts, probable defect estimations, and other ratios are all employed in the Six Sigma process. The removal of waste in the production process is known as lean manufacturing. This idea considers resource use for any cause other than creating value for consumers to be wasted, and it aims to remove as many unnecessary resource expenditures as feasible.

 

How can Operation Management be used as a Competitive Weapon?

 

Leaders in industry and government are increasingly understanding the need of incorporating the entire organization in strategic choices in the global era. Because operations use the majority of an organization's people and financial resources, they are a key function in meeting global competition.

 

Because of international competition and the emergence of new technologies, it is being increasingly recognised that a company competes not only by supplying innovative products and services, but also by having unique operational competencies.

 

A strong rival is one that can provide superior products and services at a cheaper cost. That is why, in today's world, operation management is regarded as a competitive weapon.

 

Also Read | Enterprise Content Management

 

Without the role of a dependable operational manager, the success of operations management will not be realized. Not only must operations managers be capable of managing, but they must also be capable of leading. They must be able to motivate and lead by example for their personnel.

 

Operations managers rely heavily on data accuracy because they are responsible for planning, projecting, and assessing many elements of production. 

 

Operations managers can generate precise real-time data on inventory, manufacturing, and sales using an ERP system. This technology also enables for inter-departmental collaboration, allowing staff from many divisions (and even locations) to work together on the same platform.