What is Operations Management? (PDF included) Definition, Responsibilities, Nature, and Benefit of OM
Operations management is an area of management involved in planning and conducting the process of production and redesigning business operations in the production of goods or services. It requires the responsibility of ensuring that business operations are efficient to use as few resources as needed and effective in satisfying customer requirements.
It is dealt with managing an entire production or service process, which is the process that transforms inputs into outputs. Operations develop products, maintain quality, and create services. Operation management deals with the sectors like banking, hospitals, corporations, working with suppliers, consumers, and using technology.
What you are going to learn?
Definition of Operations Management
Operations management is a field of business that is involved in the administration of business practices to boost efficiency within an organization. It requires planning, organizing, and inspecting the organization’s processes to balance revenues and costs to carry out the highest possible operating profit.
The administration of business practices to create the highest level of efficiency possible within an organization is called operations management. It is concerned with turning materials and labor into goods and services as efficiently as possible.
Operations management is managing the planning, organizing, and inspecting of the production of goods and services. It assures that your organization successfully converts inputs (materials, technology, labor, etc.) into outputs efficiently.
Nature of Operations Management
Dynamic Process
OM is a dynamic process that keeps changing as per market trends.
Transformational Process
OM is the management of activities involved in the conversion of raw materials into finished products.
Continuous Process
OM is a continuous process. It is engaged by organizations for managing its activities as long as they continue their operations.
Supervision
OM monitors and controls all activities of the organization. It secures that all activities are going smoothly and there is no mis-utilization of any resource.
Duties and Responsibilities in Operations Management/ Operations System
The primary responsibilities in operations management are called operations system. They are all aligned with each other.
The duty of an operations manager is to ensure that they are all working together efficiently and effectively in order to reach the desired goal of useful goods and services for consumers.
The operations system includes inputs, processes, outputs, and outcomes.
- Inputs: expertise, funding, practices, equipment, technologies, facilities, etc.
- Processes: planning (capacity, product, service, inventory, quality control, production, etc.), and managing productivity.
- Outputs: best quality product and service.
- outcomes: satisfied consumers.
The operations management responsibilities are:
1. Product Design
Product design means planning and creating a product that will be sold to the customers. It involves developing new concepts or expanding on current ideas in a process that will lead to the production of new products. The responsibility of an operations manager is to ensure that the products sold to customers meet their needs, as well as that is following current market trends.
Customers always choose quality over quantity, so the organization should create products and services that meet the needs of the customers.
2. Forecasting
Making predictions of events that will happen in the future based on past data is called forecasting. One of the duties of the operations manager is to predict the customer’s demand for the company’s product. The forecast helps the company to determine the future trends and the number of products needed to satisfy the market demand.
3. Supply Chain Management
A supply chain is an associated network of individuals, associations, resources, activities, and technologies involved in the manufacture and sale of any product or service. A supply chain starts with the delivery of raw materials from a supplier to a manufacturer and ends with the delivery of the completed goods or services to the customer.
The operations manager manages control of inventory, the production process, distribution, sales, and sourcing of suppliers to supply goods at acceptable prices. A well-managed supply chain process will cause an effective production process, low expanses, and time to time delivery of products to consumers.
4. Delivery Management
Delivery management is one of the major responsibilities of the operations manager. The manager makes sure the goods are delivered to the consumer from time to time. They should follow up with consumers to assure that the products delivered are what the consumers required and that they meet their functionality needs.
If the customer is unsatisfied with the products or services, the operations manager must receive the feedback and forward that to the specific departments.
Above are some of the most important responsibilities of operations management. Now here are some other responsibilities of OM:
- provide leadership for the organization.
- Make policies, strategies and decisions.
- Assist HR when necessary.
- Promote a company culture that encourages top performance.
- Work with stakeholders.
- Work with board directors to decide values and mission.
- Define short-term and long-term goals.
- Identify the issues and opportunities for the organization.
Benefits of Operations Management
Now let’s discuss some key benefits of operations management:
1. Product Quality
The first crew in a company that verifies durability and safety in a product is the operations management. Operations management reviews to quality of products which would suit customers on and after delivery.
2. Productivity
Productivity is actually the ratio of input and output. It is the only way to measure employees’ effort. Operations management ensures the best staffing to maximize the output of a company. The only way to secure productivity is through an active operations management.
3. Customer Satisfaction
Operation management helps to enhance the goodwill and presence of the organization. It assures that best quality products are delivered to all customers that could provide them with better satisfaction and make them happy.
4. Utilization of Resources
Operation management concentrates on maximum utilization of all resources of the company. It frames appropriate strategies and subsequently continues all operations of the organization. Operation managers keep a control of all activities and ensure that all resources are used by only useful means and are not wasted.
5. Maximize Revenue
Operational management directly affects the profitability of the organization. It focuses on cutting down the cost of operations by reducing the misuse of resources. Operations managers review every production activity and take all significant steps for maintaining productivity in the organisation. Operations managers try to keep an appropriate balance between cost and revenue.
6. Improve Innovation
Operation management implements innovative changes in organisational activities. All decisions regarding production planning are taken by operation managers by conducting research and study of prevailing market conditions. It considers all technological changes and develops a strong base of knowledge and operations. This brings various innovations into operations of the business.
