Operations management (OM) is the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.
Understanding Operations Management (OM)
Operations management involves utilizing resources from staff, materials, equipment, and technology. Operations managers acquire, develop, and deliver goods to clients based on client needs and the abilities of the company.
Operations management handles various strategic issues, including determining the size of manufacturing plants and project management methods and implementing the structure of information technology networks. Other operational issues include the management of inventory levels, including work-in-process levels and raw materials acquisition, quality control, materials handling, and maintenance policies.
Operations and Supply Chain Management (OSCM)
A critical function of operations management relates to the management of inventory through the supply chain.1 This process is known as operations and supply chain management (OSCM). To be an effective operations management professional, one must be able to understand the processes that are essential to what a company does and get them to flow and work together seamlessly. The coordination involved in setting up business processes in an efficient way requires a solid understanding of logistics.
An operations management professional understands local and global trends, customer demand, and available resources for production. Operations management approaches the acquisition of materials and the use of labor in a timely, cost-effective manner to deliver customer expectations. Inventory levels are monitored to ensure that excessive quantities are on hand. Operations management is responsible for finding vendors that supply the appropriate goods at reasonable prices and have the ability to deliver the product when needed.
Another large facet of operations management involves the delivery of goods to customers. This includes ensuring that products are delivered within the agreed time commitment. Operations management also typically follows up with customers to ensure that the products meet quality and functionality needs. Finally, operations management takes the feedback received and distributes the relevant information to each department to use in process improvement.
What Operations Managers Do
Operations managers are involved in coordinating and developing new processes while reevaluating current structures. Organization and productivity are two key drivers of being an operations manager, and the work often requires versatility and innovation. As part of their daily responsibilities, operations managers must possess a variety of skill sets, including:2
- Technical expertise in areas such as production automation, data entry, budget tracking, and design.
- Organizational ability and attention to detail to include keeping track of project files, employee reports, budgets, schedules, and other details related to company processes.
- Motivational prowess in the form of strong leadership skills that provide the expertise to motivate others, inspire ideas, and foster a supportive and diverse team.
- Analytical aptitude, including skill in risk analysis and mitigation when initiating new projects. Operations managers also must analyze processes to identify challenges and offer solutions in the event that negative situations develop.
- Decision-making proficiency, especially under stress when there is very little time to assess all factors.
- Ability to maintain quality standards, including as they relate to raw materials, machinery, manufacturing procedures, packaging, delivery processes, and the finished product.
A master of business administration (MBA) degree in operations management can provide global perspective on industry trends and an awareness of financial regulations and political uncertainties that can affect an organization. It also provides a solid grasp of the inherent complexities and the tools needed to respond well to change.