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What is Operations Management?

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Operations Management
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Operations Management is an excellent field in the business landscape. It is the execution of backend organisational functions. Operations management encompasses all the functions related to manufacturing, inventory and quality control which ensures that the product and services are up to the market standards. Operations management is crucial for the business as it helps maintain business efficiency. In this blog, let us learn more about operations management in detail.

Define Operations Management

Operations management can be defined as the implementation of an organisation’s best practices to improve operational efficiency. Planning, supervising, and organising supply chain functions such as production, manufacturing and delivery of final products to the customers are overseen by the operations management team. This approach is executed to measure and take remedial measures to boost the operational efficiency of an organization. It analyses all the internal processes, checking their efficiency.

The teams of operations management try to balance costs with revenue to gain the highest net operating profit. Operations management leverages resources such as staff, materials, equipment and technology to achieve efficiency.

Operations management has numerous tasks to take care which include finalizing the size of manufacturing plants, project management approaches, and applying the structure of information technology networks.

Some of the operational challenges include maintaining inventory levels such as work-in-process levels, acquisition of raw materials, quality control, materials handling, and maintenance policies. Operations management analyses all the resources such as raw materials etc. and ensures less wastage.

There are numerous formulas used by operations managers such as the economic order quantity formula etc. The economic order quantity formula determines how long it takes an inventory order to process and the amount of inventory to hold on hand.

Also Read : What are Operating Costs?

Operations and Supply Chain Management

An operations management helps with the inventory through the supply chain. This process can be called operations and supply chain management(OSCM). The best operating managers know about all the processes and must ensure which process works best for the company and should make it work together seamlessly.

In addition, operation managers require deep insights into logistics to set up the business efficiently. Further, have to stay updated with local and global trends, customer demand and the availability of resources required for the production process. The operations manager must know the different approaches to rightly manage the acquisition of materials and the utilisation of labour in a cost-effective and timely manner fulfilling the demands of the customer.

In addition, the managers also monitor inventory levels to ensure that the right levels are maintained. Also, the operation managers must find the right vendor that supplies quality materials at a reasonable price. Plus, they must also ensure that the delivery is made on time.

The operations manager should also look into delivering goods to the customers. They must ensure that the products are delivered within the decided time frame. Additionally, they also reach out to the customers to comprehend if the product meets all the quality and functionality requirements. Feedback from the customers is taken and then passed it to the relevant departments to make improvements.

Operations Managers

An Operations manager has a crucial role to play in the organisation. They are involved in managing complex tasks such as coordinating and developing new processes and simultaneously analysing the current structures. For operating managers two qualities are mandatory for success- organization and productivity. The operating managers must possess the following skills enumerated below:

An Operations manager should possess technical expertise in areas such as product automation, data entry, budget tracking and design.

The most important quality of the operations manager is to have organisational ability. Plus, attention to minute details is also a necessary trait. Paying attention to details such as tracking required project files, employee reports, budgets, schedules and other information regarding business processes.

In addition, operations managers must possess strong leadership skills like motivational prowess. The ability to motivate colleagues, and should support and inspire ideas from individuals and teams.

Analytic aptitude is a mandatory skill required for an operations manager. It helps in identifying risk and assists in mitigating it. This will be very useful when initiating new projects. Additionally, they should have the capability to find solutions for all the challenges even in the worst-case scenarios.

One of the most crucial traits for the operations manager is the ability to make the right decisions.

Again this is also an important requisite for the operations manager, the ability to maintain quality standards. Quality regarding raw materials, machinery, manufacturing procedures, packaging, delivery processes and finished product.

Candidates aspiring to become an operations manager can pursue a post-graduation course- an MBA in operations management. This course will provide insights into global industry trends, awareness of political uncertainties and financial regulations which tend to impact the organisation.

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Responsibilities of an Operations Manager

Responsibilities can differ based on company characteristics and job specifics, but typically, individuals in business operations are tasked with:

  • Assessing, creating, and executing business processes.
  • Guiding logistical procedures and the supply chain.
  • Supervising production, distribution, and quality assurance processes.
  • Handling and scrutinizing financial budgets.
  • Formulating strategic decisions and collaborating with senior executives on business strategy.
  • Overseeing staff and ensuring effective supervision.
  • Assisting HR in recruitment endeavours.
  • Cultivating connections with stakeholders and suppliers.

Types of Operations Management

We learned previously that operations management is the application of best practices for the business to increase operational efficiency in the organisation. There are three main ways to approach operations management: focusing on the overall goal, the specific tasks, or the individual employees. The choice depends on what your company needs and aims to achieve. In different situations, a manager might use different approaches based on what’s most suitable.

→Objectives Management

Deciding what’s most important, making choices that align with business goals, and organizing how things work to help the whole company succeed.

→Task Management

Handling day-to-day activities by following work progress and step-by-step workflows to assign tasks before moving on to the next stage.

→Individual Supervision

Making operations work better by getting information directly from managers and employees who are doing the job in real time.

What is the Purpose of Operations Management?

Operations Management is crucial for the organisation as it establishes control over the manufacturing process and helps manage business operations efficiently. Operations managers ensure to balance operating costs with revenue to increase net operating profit. Enumerated below are some significance of operations management:

→Minimizes Waste

If your business is involved in manufacturing, there will be a lot of waste if the activities are not planned properly. However, operations management can minimise the wastage. Proper planning and optimal use of resources will reduce the risks of overproduction, defects, inventory damage, waiting periods and overprocessing. Hence, if the loss is less, the organisation will experience increased productivity and profit.

→Ensures Quality

Maintaining quality standards is one of the important aspects of operations management. During each stage of production, the operations management team can implement standardised procedures to maintain quality. The team should prioritize and emphasize safety and consistency to increase the sales of the product and maintain the brand’s reputation.

→Better Customer Service

Improving customer service is the focal point of the operations management team. More satisfied customers will increase brand loyalty. The trust has to be maintained with the brand and the customers. When the trust is there it will result in positive reviews, repeat purchases, and referrals. All these will boost the sales and the revenue of the business. Quality assurance and waste management will help increase customer loyalty towards the brand.

→Boosts Revenue

If product quality and customer service are managed efficiently, the company can boost sales and increase revenue. This will attract more customers and the organisation can expand its market share. The three most important factors are responsible for increasing the revenue of the business- Quality, reduced waste, and operation management processes.

→Increase Employee Productivity

Employee productivity can be increased with operations management strategies. The operations manager can analyse all the departments and suggest areas for improvement. All these challenges can be addressed by executing new operational strategies and can elevate employee productivity.

Also Read : What is Operating Income?

Example of Operations Management

In a manufacturing company, operations management involves overseeing the entire production process. This includes evaluating and refining the assembly line, ensuring the timely availability of raw materials, and supervising workers to maintain efficiency. Managers use real-time data from the production floor to identify bottlenecks, allocate resources effectively, and optimize workflows. They make strategic decisions to align daily operations with broader business objectives, such as increasing output or reducing costs. By setting priorities and streamlining tasks, operations management ensures a smooth and productive workflow, ultimately contributing to the company’s overall success and competitiveness in the market.

Best Practices of Operations Management

Every business has a unique way of managing its operations. However, let us discuss some common ways to manage the operations of an organisation effectively.

⇒Leverage Automation

Technologies such as modern ERP systems are an advanced business solution to smoothly manage all the operational functions. It can provide deeper insights with the help of artificial intelligence and data analytics. This information can be used to improve the operational efficiency of the organisation. Even other advanced technologies can also be leveraged for seamless management of operations.

⇒Stay Agile

Operations managers must readily accept change and adapt to market conditions. However, we have a solution, a cloud-based system helps the business to stay agile and helps with change and innovation.


Operations management is like a plan for businesses to work their best and make the most money. Operations managers use organization and efficiency to reach their main goals and make sure everything runs smoothly. They focus on doing things in the best way possible to be as profitable as they can be.

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