Operations Management Definition & Overview

KEY TAKEAWAYS

• Operations management is the process of planning, organizing, and controlling resources. Companies use these to produce a product or service.
• An operations manager handles ensuring quality and other internal processes. This includes productive workers and high-quality products.
• An effective operations manager should have strong supervisory, organizational, problem-solving, and communication skills.

What Is Operations Management? 

Operations management is the way you design, control, and improve your processes. Companies use certain processes to create their goods and services. It helps to transform inputs into the desired output. And it involves managing your resources to meet customer demands. 

It’s an important factor in many industries. Some include health care, manufacturing, retail, and service businesses. It also includes making sure you’re able to deliver the goods and services you promise customers. So, it’s a balance of meeting demands while keeping costs low. 

Operations and Supply Chain Management

Supply chain management is related to operations management. Your supply chain is the process you take to get materials and products to your customers. This often involves suppliers, distributors, retailers, and manufacturers. 

The main goal of a supply chain is to get the right product, to the right place, at the right time. There’s a high level of coordination required between everyone involved. Operations managers are responsible for the day-to-day operations of an organization. 

Operations Management Systems 

In operations management, there are four main systems. Let’s take a closer look at how they work.

Business Process Redesign

This system improves how efficient business operations are. It does this by redesigning how you carry out your processes. This leads to an improvement in manufacturing, service, and administrative processes. 

Reconfigurable Manufacturing Systems 

These systems let businesses adapt to changing market conditions quickly. It’s a computer-aided manufacturing system. It helps companies change how they produce products. This helps meet the demands of customers. 

Six Sigma

Six Sigma focuses on improving the quality of products and services. It leverages data and statistics to help achieve these goals. As well, it reduces the possibility of defects by only providing good products. This helps reduce downtime and keeps costs low. 

Lean Manufacturing 

This type of system helps to cut waste. It does this by removing non-essential activities from the production process. It’s also centered around the philosophy of value over time. 

Skills for Operations Management 

Operations managers need a wide range of skills. There are several roles and responsibilities they could take on. Here are some of the most important skills they should hold:

• Supervision Skills: Ensuring workers complete their tasks well and on time.
• Organizational Skills: There can be a lot of moving parts. Staying organized to meet deadlines is important.
• Problem-Solving Skills: Solving problems quickly can make a big difference. 
• Communication Skills: This can include communication with workers, suppliers, and customers. 
• Finance Skills: Making informed decisions about products and services can help keep costs low. 
• Technical Skills: This contributes to improving the efficiency of the production processes. 

Responsibilities in Operations Management 

There is a wide range of activities that operations management teams can take on. But, a primary one is quality control. As well, they manage inventory and ensure products get delivered on time. This all helps contribute to keeping costs low. 

Here is what an effective operations management team can do:

• Planning and Organizing Work: Ensuring tasks get organized and scheduled makes a big difference. This includes managing the work floor, supplies, and setting deadlines. Employee productivity can increase and delivery of products will be more efficient.
• Coordinating Activities: Managing inventory levels makes sure products get delivered at the right time. There’s also a focus on removing excess stock to limit wasteful spending.
• Minimizing Costs: Making a profit is every business’s goal. This can be a challenge if costs aren’t managed well. But there’s still a need to make sure quality and customer service aren’t sacrificed. 
• Customer Satisfaction: Angry or upset customers aren’t good for business. Ensuring customers receive the right product is important. Plus, there’s a need to meet customer demand within the market. 

Summary 

Operations management includes controlling and improving processes for operational efficiency. Several businesses need these processes to provide their goods or services to customers. Simply put, it’s meant to ensure a company can deliver on customer demands. 

Implementing effective operations management techniques can help with several things. Including operating profit and inventory management. As well, it will contribute to enhanced customer success and drive customer loyalty. An effective operations manager can increase production efficiency.