DEFINITION AND EXAMPLES
Operations
- Operations means the actions and decisions
made by participants and members of a
business that affect the production, distribution,
service, management, etc. needed for a
company to function that requires the use of
resources and assets.
- Operations is the work of managing the inner
workings of a business so it runs as efficiently as
possible.
- It simply means the end-to-end process of
transferring and storing supplies of finished and
unfinished goods.
Management
- a single or group of individuals who challenges
and oversees a person or collective group of
people in efforts to accomplish desired goals
and objectives. Furthermore, the definition of
management includes the ability to plan,
organize, monitor and direct individuals.
- In the simplest of terms, business management
refers to the coordination and administration of
business activities, tasks, and resources to
achieve a set objective. This often involves
supervision and training of staff, overseeing
core operations, and designing company
infrastructure to optimize for the future
- Management includes the activities of setting
the strategy of an organization and coordinating
the efforts of its employees (or of volunteers) to
accomplish its objectives through the
application of available resources, such as
financial, natural, technological, and human
resources.
Operations Management
- operations management is the administration
of business activities to accomplish goals,
achieve higher productivity, and maximize
profitability.
Examples of managing business operations
- Healthcare – An operations manager of a
healthcare facility is generally responsible for
ensuring efficiency in delivery of high-quality
care. That can include overseeing administrative
costs, managing claims and billing, and legal
compliance.
- Manufacturing – A company that makes home
appliances, for example, has processes for
sourcing materials, managing factories,
maintenance, overseeing inventory, and
ensuring quality.
- Restaurant – usually responsible for facility
maintenance, employee training and
supervision, financial planning, inventory
management, compliance, and payroll.
- Retail – In an industry that can span multiple
environments, from brick-and-mortar to
ecommerce and single stores to chains,
business operations can encompass many
functions, including sourcing, inventory,
staffing, logistics, store management, and
customer service.
- Transportation – includes overseeing vehicle
maintenance, fuel supply, routing, staffing, and
communication, among other functions.
DIMENSIONS AND DIFFERENT TYPES
Four dimensions of operations management
- Volume, Variety, Variation and Visibility. They
can be used to assess all different types of
business operations and understand how and
why they operate, their key competitive
strengths, weaknesses and approaches.
1. Volume Dimension
- McDo is a well-known example of high-volume
low-cost hamburger and fast-food production.
Said volume (or bulk and mass) of their
operation is key to how their business is
organized. Essential to their operation is the
repeatability of the tasks, as well as the
systemization of the work. From this, standards
and procedures drive the way in which each
part of the job is carried out and then by
combining in this way provides the organization
with a low-cost base. In contrast a local café or
restaurant will have a much lower volume of
 output, less labor, less systemization, and each
staff member completes a wider variety of tasks
which results in higher unit costs.
2. Variety Dimension
A common example used to describe the variety
(different forms) dimension is the contrast
between a taxi and a bus service. Both offer
hired transportation services but a taxi service
has a much higher variety dimension as they
will basically pick you up and drop you off
wherever it is you need to go. A bus can only
provide a defined route and schedule. Whilst
they offer a similar service, variety and flexibility
is high for the taxi company and low for the bus
company. It is worth noting here that a low-cost
model is more easily achieved with less variety.
3. Variation (change in form or condition)
Dimension
- Consider two home building contractors. One
offers prefabricated homes that you choose
from a catalogue or online. It is transferred to
site and erected over the course of a few days.
Second building company offers customized
homes they have display homes they have built
that you can walk through. Each aspect of the
home from the façade to the number of
bedrooms to the floor materials to the type of
heating can all be customized to customer.
Design and build phase can take anywhere
between 24 weeks to 52 weeks. Company two
has a much higher level of cost and lower
volume than company one who offers standard
pricing and can control costs much more easily.
4. Visibility Dimension
- This dimension refers to a customers ability to
see, track their experience or order through the
operations process. A high visibility dimension
includes courier companies where you can track
your package online or a retail store where you
pick up the goods and purchase them over the
counter. A low visibility dimension could be a
web design company who takes your order and
advises your new website will be ready in 4 – 8
weeks. The service skill of employees will
greatly affect the customers’ experience.
Three Types of Operations Management
- Operations management includes three
different levels: strategic, tactical, and
operational. Strategic level defines company
goals, and Tactical level outlines a plan to
implement that strategy. Operations level
contains daily operations required to produce
the desired outcome.
Strategic, Tactical, or Operational Management Plan
- Strategic plans are based on longest-term
planning horizon, operational plans for shortest
planning horizon (even on a day-today basis),
and tactical plans, in between. In terms of
relationships, operational plans lead to the
achievement of tactical plans, which in turn lead
to the attainment of strategic plans.
Strategic, Tactical, Operational and Contingency Plans
- Contingency plan is a plan drawn up for possible
unforeseen events or circumstances. It is a
course of action to be followed if a preferred
plan fails or an existing situation change.
- Strategic, tactical and operational plans are
directed courses of action intended to achieve a
certain set of goals and objectives. They are
formulated based on usual assumptions and
expected outcomes. These are the similarities of
these three kinds of plans.
- For the differences among the three plans
o In terms of level of planning, strategic
plans are highest, operational plans
lowest, tactical plans in between.
o In terms of scope, strategic plans are
broadest, operational plans seem least
broad, tactical plans in between.
 Strategic plans are based on longest-
term planning horizon, operational
plans for shortest planning horizon
(even on a day-to-day basis), and
tactical plans, in between.
o In terms of relationships, operational
plans lead to the achievement of
tactical plans, which in turn lead to the
attainment of strategic plans.
o In terms of cascading flow, strategic
plans are cascaded to tactical plans,
tactical plans to operational plans.
o In the context of an organization,
strategic plan includes the statements
on vision, mission, core values and
strategic goals / objectives. Tactical plan
includes the action plans to achieve the
strategic goals / objectives. Operational
plan includes the action plans to
achieve the tactical goals / objectives.
o • Details specific activities and events to be
Action Plan
- is a sequence of steps that must be taken, or
activities that must be performed well, for a
strategy to succeed, or for a goal or objective to
be achieved. An action plan has three major
elements (1) Specific tasks: what will be done
and by whom. (2) Time horizon: when will it be
done. (3) Resource allocation: what specific
funds are available for the specific activities.
Simplifying things, tactical and operational plans can
be lumped together as action or operational plans.
These are plans to operationalize or to achieve the
strategic plan. If there will be a difference between the
two, tactical plans are more general or broader than the
operational plans.
Strategic plan is a general guide for the
management of the organization according to the
priorities and goals of stakeholders. The strategic plan
DOES NOT stipulate the year-to-year, month-to-month,
and day-to-day tasks and activities involved in running
the organization.
Operational Plan DOES present highly detailed
information specifically to direct people to perform the
year-to-year, month-to-month, and day-to-day tasks
required in the running the organization. Organization
management and staff should frequently refer to the
operational plan in carrying out their everyday work.
Operational Plan provides the what, who, when and
how much:
• what – the strategies and tasks that must be
undertaken
• who – the persons who have responsibility of
each of the strategies/tasks
• when – the timelines in which strategies/tasks
must be completed
• how much – the amount of financial resources
provided to complete each strategy/task
Operational Plan
• A specific plan for the use of the organization’s
resources in pursuit of the strategic plan.
undertaken to implement strategies.
• Plan for day-to-day management of the
organization (one year time frame).
• Should not be formulated without reference to a
strategic plan.
• May differ from year to year significantly.
• Produced by chief executive and staff of
organization.
• One purpose of the Operational Plan is to provide
organization personnel with a clear picture of
their tasks and responsibilities in line with the
goals and objectives contained within the
Strategic Plan.
• Basically, Operational Plan is a plan for the
implementation of strategies contained within the
Strategic Plan.
• It is a management tool that facilitates co-
ordination of the organization’s resources
(human, financial and physical) so that all the
goals and objectives in strategic plan can be
achieved.
CRITICAL AND STRATEGIC DECISIONS
 - An inventory manager’s role is to ensure that
products are delivered on time and in the
correct quantities, that resources are allocated
appropriately, and that inventories are kept
under control. Businesses can keep their day-to-
day operations running smoothly if they make
the right operational decisions.
- Critical decision is a decision that has a
significant impact on the overall success or
failure of a business or organization. Critical
decisions are often made by upper-level
management, as they are the ones who have
the most knowledge about the company’s
overall strategy and goals.
Strategic Decisions
- Strategic decisions are those decisions that have
an influence over years, decades, and even
beyond the lifetime of the project. Once a
strategic decision is made, it is very unlikely to
be altered in the short term.
- Strategic decisions examples are varied. For
instance, when a company wants to launch a
new product, considering factors like the cost of
making the product and the target market is
strategic decision making.
- systematic use of methods and tools to try to
Strategic Decisions in Operations Management
- In 2008, Ford Motor Company reorganized
using what’s known as the ten strategic
operations areas. It was part of the company’s
turnaround and enabled the organization be
more flexible and survive the financial crisis
without taking government bailouts. Toyota,
Google and Jet Blue are also known for using
the ten area system in all of their business
activities. It is used across industries as a guide
to operations management.
10 OPERATIONS MANAGEMENT DECISIONS
1. Goods and Services
- This includes looking for ways to implement
consistency in costs, quality, and resources
across all business divisions.
2. Quality Management
- is the systematic control process of keeping an
intended level of quality in the goods and
services, in which the organization deals. It
attempts to prevent defects and make
corrective actions (if they find any defects
during the quality control process), to ensure
that the desired quality is maintained, at
reasonable prices.
- This defines the expected quality from the
consumers view point as well as established
policies and procedures that the company
intends to adopt towards attaining such quality
levels.
- Its objective is to maintain Operations
Management practices towards the course of
maximizing quality of output and matching the
company's brand image with the expectation of
consumers. This decision area in Operations
Management at organizations is applied
through quality assurance and quality control
programs. This area is the process controlling,
measuring and improving the quality of an
organization's processes, goods and services.
Quality Improvement
- Term 'quality improvement' refers to the
continuously improve quality of care and
outcomes. There are a range of different
methods and tools, such as Lean, Six Sigma and
Models for Improvement.
- Easy to implement and follow up, one most
commonly used quality management process is
the plan/do/check/act (PDCA) cycle. Other
processes are a takeoff of this method, much in
the way that computers today are takeoffs of
the original IBM system. PDCA cycle promotes
continuous improvement and should thus be
visualized as a spiral instead of a closed circle.
- Another popular quality improvement process
is the sixstep PROFIT model in which the
acronym stands for:
o P = Problem definition.
o R = Root cause identification and
analysis.
 o O = Optimal solution based on root
cause(s).
o F = Finalize how the corrective action
will be implemented.
o I = Implement the plan.
o T= Track the effectiveness of
implementation and verify that the
desired results are met.
- If the desired results are not met, the cycle is
repeated. Both the PDCA and the PROFIT
models can be used for problem solving as well
as for continuous quality improvement. In
companies that follow total quality principles,
whichever model is chosen should be used
consistently in every department or function in
which quality improvement teams are working.
- Once the basic quality improvement process is
understood, addition of quality tools can make
the process proceed more quickly and
systematically. Seven simple tools can be used
by any professional to ease the quality
improvement process: flowcharts, check sheets,
Pareto diagrams, cause and effect diagrams,
histograms, scatter diagrams, and control
charts.
Quality Control and Assurance Program
- Quality Control can be defined as "part of
quality management focused on fulfilling quality
requirements." While quality assurance relates
to how a process is performed or how a product
is made, quality control is more the inspection
aspect of quality management.
- Examples of quality assurance activities are
process checklists, process standards, process
documentation and project audit. Examples of
quality control activities include inspection,
deliverable peer reviews and the software
testing process.
- - Different markets mean different challenges
3. Process and Capacity Design
- Design strategies which support all production
goals including technology and resources. A
value stream map can help determine what
processes are necessary and how to keep them
running efficiently.
4. Location
- In developing a location strategy consider
supply chain and how the location will receive
supplies, movement of goods and services
internally and to customers, and the role of
marketing and public relations in location
choice.
Forecasting
- This relates to using the organization’s historical
data, facts, and figures, collected statistics, and
details when making production decisions.
These decisions are made for future
productions based on the past data available.
Accurate forecasting should be able to decide
the production volume that is necessary for a
specific time period. This will help the business
to avoid maintaining excess inventory with the
company or face shortages in the inventory in
the production process.
5. Layout Design and Strategy
- Consider the placement of desks, workstations,
and how materials are delivered and used.
6. Human Resources and Job Design
- Implement continuous improvement programs
with regular reviews, provide continuous
training for employees, and institute employee
satisfaction programs to achieve success in this
area.
7. Supply Chain Management
- Determine the best strategies to streamline, be
cost effective, and to develop trusted partners.
8. Inventory
when it comes to inventory but all need to
strategize and plan their inventory control.
Weather, supply shortages, and labor all
influence how an organization maintains its
inventory.
 9. Scheduling
- Consider both production and people. Ask
questions such as how much product is required
to be produced for the customer in the required
time? How many people and how many
machines are required to do the job effectively
and efficiently? This differs among industries
and business departments. For example,
emergency rooms need to maintain different
schedules than a general hospital’s corporate
office.
10. Maintenance
- This includes maintaining people and machines,
as well as, process. What do you need to do to
maintain quality and keep resources reliable
and stable?
MAIN FUNCTIONS, ROLES AND RESPONSIBILITIES
Key Functions within Operations Management
1. Finance - ensuring that financial resources are
properly allocated and utilized to their full
extent. Helps create a budget that will allow the
organization to meet its production goals and
can help evaluate various investment
opportunities to make the best decision.
2. Strategy - Strategic management is the
planning, monitoring, analysis, and assessment
of tall aspects of an organization on a
continuing basis. Help manufacturing
organizations make better decisions regarding
production planning and scheduling, keep
customers happy and allow the facility to meet
its overall goals. Many business strategies
include supply chain configuration, sales,
capacity to hold money, and optimal utilization
of human resources.
3. Operation - This function of operations
management is concerned with planning,
organizing, directing, and overall control of all
activities within the organization. This is the
primary function of operations management
and will effectively aid in converting raw
materials and human efforts into a durable
good and service that consumers will be able to
utilize.
4. Product Design - One of the main duties of
operations management is to ensure that a
product is designed properly and caters to
market trends and satisfies the needs of
consumers. In addition, introducing new
product designs can be challenging due to the
existing product mix and available resources.
5. Forecasting - the process of predicting what the
demand for certain products will be in the
future. It identifies what both current and
future customers will want to buy and tells
manufacturing facilities what they should
actually produce. Producing too few items leads
to stock shortages and can negatively impact
customer relationships. On the other hand,
having too much inventory is costly and can
lead to having excess stock if the items become
obsolete. Finding the right balance is one of the
functions of operations management.
6. Quality Control - In addition to the product
design function, operations managers should
strive to produce the best quality product
possible. Modern-day consumers are concerned
about quality instead of quantity, which is why
it is so crucial to develop a durable and top-
notch quality product. Operations managers
should ensure that quality control processes are
defined and implemented to catch any
defective items.
Functions and Roles in Operations Management
 Planning and implementing manufacturing
plants.
 Managing projects.
 Planning information systems.
 Helping to design and develop products and
services.
 Managing inventory through the supply chain.
  Managing delivery to customers in a timely
manner.
 Optimizing quality control.
Operations Management Overview: Roles and
Responsibilities
- An operations manager touches everything
from process design to management systems
because they are responsible for overseeing
and improving how business operations
function at a company.
Operations Management Responsibilities. The role of an
operations manager crosses many boundaries, including
responsibilities as diverse as product development and
project management.
1. Capacity Planning: This involves determining
the number of products or services that a
company can distribute or sell in a specific
period. The operations manager may evaluate
the raw materials needed to produce the
inventory, the human resources to make the
product, the market demand for the product,
and the production planning to meet these
goals promptly.
2. Inventory Management, also known as supply
chain management or inventory control,
involves instituting an efficient manufacturing
system to produce, process, store, and
distribute a company’s products for sale. An
operations manager develops the business
operations strategy to make, track, and manage
inventory that prevents bottlenecks and meets
customer demands.
3. Product Design or service design involves
creating a product or service that will give the
company a competitive advantage in the
marketplace. An operations manager is often
involved in product design because they
understand how the production systems make
the end product. These managers need to
consider the cost-efficiency of a product and
whether it meets customers’ needs. They might
oversee the design of new products to ensure
that the finished goods will be compatible with
the assembly line or other systems already in
place.
4. Project Management: An operations manager
will oversee any projects related to a company’s
manufacturing processes and inventory
management. They may devise schedules,
source third-party service providers, and
manage the employees responsible for
executing particular projects.
5. Service Design relates to how the company
interacts with service providers and customers.
An operations manager needs to consider how
a company attracts customers, meets their
needs, and retains business.
6. Quality Control also called quality assurance or
quality management, involves monitoring
products and services with a company to ensure
high-quality products and satisfied customers.
Quality control may involve checking each step
in the production process or service operations
for errors or potential problems in finished
products or presentment.
Roles and Responsibilities of an Operations Manager
 Organizing events to increase staff motivation
and engagement
 Analyzing data to calculate the cost-benefit
ratio
 Locating problems in company’s supply chain
through quality control checks
 Establishing and monitoring employee
schedules
 Creating programmes for employees’
professional development
 Establishing objectives for increased output and
improved efficiency
 Monitoring the overall budget of the business
as well as departmental budgets
  Establishing corporate guidelines and carrying
out frequent changes while ignoring workflow
or procedure
 Resolving disputes between departments about
resources
 Examining company’s resource management
and looking for ways to boost employee
productivity
 Developing tools to automate repetitious
processes
 Monitoring on-site projects and field operations
 Resolving inventory management concerns
 Constructing the logistics-enhancing re-
solutions
How To Become an Operations Manager?
1. Earn a Bachelor’s Degree
2. Develop Hard Skills
3. Strengthen Soft Skills
4. Take up Additional Courses
5. Create Your Resume
BASIC PRINCIPLES AND CHARACTERISTICS
Management Traits of an Operations Manager
- ensuring that operations are efficient and
effective.
- the skillset needed for operations managers
includes thinking analytically, communicating
effectively, and executing efficiently.
- Establishing an effective operations process
involves strategy development with some trial
and error.
1. Realistic
- A good operations manager understands that
employees are valuable and can effectively
communicate with operations staff. That means
delivering the hard facts, providing thoughtful
and constructive feedback, and listening to
empowered employees who are part of the
same team.
- Results showed from a 2007 study, “The
Relationship between Transformational
Leadership and Leader-Member Exchange in
Different Cultures,” showed that the teams with
strong and trusting leadership positively
impacted team members’ individual and
collective performances.
- For example, if an operations leader realizes
that production is slowing down, costing the
company revenue, communicating directly with
employees might be a better approach. An
effective operations manager can impress upon
employees the need to improve and explain the
reasoning behind the request. If a goal cannot
be reached, employees are empowered to
share with management the necessary
information for developing alternative,
achievable plans.
2. Looks for Efficiency
- the master and commander managing resource
input and output. These professionals optimize
processes to decrease the cost of goods per
unit, making it possible to sell at a lower price
and leave a high margin to remain agile in
competitive business environments.
- Today’s efficiency models date back to the
1950s when Toyota shifted to a “just-in-time
(JIT)” model, focusing purely on production
costs, product quality, delivery, and worker
involvement to minimize excess time and
overall costs. This model became the
foundation for lean manufacturing, today’s
more commonly used efficiency model.
- Production from a system pushing out products
in batches is taken to a flowing design that
systematically produces single units as needed
at an optimum cost.
- Efficiency is one of many essential qualities of
an operations manager. An operations manager
needs to ensure the focus remains on the
organizational objective rather than the narrow
focus of the different department and division
goals. To accomplish this, operations leaders
must implement areas of flexibility into all
 stages of operations and facilitate
crossfunctional communication, enabling
adaptability between teams and departments.
3. Focuses on Quality
- In today’s marketplace, the focus on quality has
progressed to ensuring value at the source. For
example, rather than use a supplier with a
rejection rate of 5% with provided parts, an
effective operations leader might go with a
supplier who charges slightly more but has a
lower rejection rate to ensure the product’s
lifespan and consumer satisfaction.
- When operations leaders pay greater attention
to quality, it helps to inspire their employees to
strive to meet leaders’ expectations. Anyone
who has studied how Steve Jobs operated at
Apple understands how his demand for
perfection drove his people to do everything
possible to meet those demands. It was well-
known that Jobs took tremendous pride in the
equipment and devices that his company
developed. By setting high standards for himself
and everyone around him, Jobs took Apple from
a company once in decline to the most valuable
company in the world in 2012 at $623.5 billion –
exceeding the previous record of $618.9 billion
set by Microsoft on Dec. 30, 1999.
- Not only does focusing on quality help
operations leaders maintain productive teams
by fostering pride in a product or service. It can
also drive down costs, helping an organization
gain an advantage over the competition.
4. Operations Leaders are Effective at Supply
Chain Management
- Supply chain management plays a vital role in
the success of a company. Operations leaders
within an organization are working on designing
and executing supply chain strategies that
maximize productivity, minimize risk and
effectively respond to fluctuations in demand.
Supply chain management encompasses the
shaping of supply and demand and the optimal
design of products, creating a wide range of
responsibilities. As a result, operations leaders
have begun to treat their supply chain networks
—consisting of logistics providers and contract
manufacturers—as partners to align goals and
effectively orchestrate collaboration across
these groups.
- As an operations leader, having practical
approaches to supply chain management
requires knowledge of manufacturing,
warehousing, logistics and transportation, and
customer service. Knowledge of effective supply
chain management is not only beneficial to the
daily duties of an operations manager but also a
competitive quality to have in today’s job
market. Products need to be delivered to
consumers in timely, cost-effective ways that
also meet demands—in other words, the right
products, in the right place, at the right time!
5. Operations Leaders Do Not Manage; They
Lead.
- One essential quality of an operations manager
is leadership. Strong operations leaders ensure
staff is encouraged to perform to the best of
their abilities by providing the tools necessary
to make tasks seamless. Maintaining healthy
and motivated teams is more than just applying
strategies and project management tools to
create an optimum output result; it involves
thoughtful leadership and management of each
level of human capital.
- One of the most complex parts of being a good
operations manager is identifying when a team
member is struggling to meet performance
goals and addressing sensitive issues.
Employees who aren’t performing only reduce
the effectiveness and efficiency of their co-
employees, and identifying possible solutions as
a remedy is a difference between building trust
in leadership and building fear for one’s position
in tactical positions.
- Operations leaders need to make sure their
management team keeps them informed of
individuals who are excelling and individuals
who are falling behind in crucial competencies.

Their ultimate goal should be consistency. An effective
operations manager should encourage top performers
to perform at their peak and find ways to bring
underperformers up to standards.
Principles of Operations Management include the
following:
1. Reality - Operations management should focus
on the overall problem, instead of just the tools
and techniques.
2. Change - With new theories and solutions
available to manufacturing operations, being
open to change, ensure to maintain stable
operations in the long run.
3. Organization - Within a production facility,
everything within the operation is
interconnected.
4. Humility - it is important for managers to
understand that they have limitations. Knowing
what your limitations are will allow you to save
money and time and help production in the long
run.
5. Success - the interest of your customer should
always be taken into account. If you wish to be
successful, you have to keep your customers
happy and coming back.
6. Accountability - Managers are expected to be
able to set rules and metrics while also checking
on a frequent basis that these goals are being
met. This keeps workers accountable and allows
them to put in the necessary efforts to meet
those goals.
7. Causality - Problems are very similar to
symptoms, in which these two things usually
have underlying causes. In order to rid of the
problem forever, you have to remove the
underlying cause as well.
8. Fundamentals - In operations management, the
Pareto Rule of Efficiency (aka the 80/20 rule) is
applicable as 80% of success comes from
maintaining current processes while 20%
acquired from applying new techniques to the
processes.
9. Variance - That the variance of demand signals
can be problematic for manufacturing facilities.
However, variance in terms of the techniques
and processes put in place should be
encouraged to foster creativity and allow for a
better response to the other sources of
variation.
10. Managed Passion - Passionate employees are
your most valuable asset. They are the key to
long-term performance and success of the
company. It is crucial to have motivated
managers as that can instill a sense of passion in
their employees.
Important Features of Operations Management
Characteristics of Operations Management
1. Narrow Scope
- its primary task is to ensure that all raw
materials, machines, and labor are working
according to the long-term goals and objectives.
- The focus of operations management is more
on day-to-day functioning of the company
rather than looking at bigger picture and goals
2. Timing and Quality
- In the case of operations management, the
main emphasis of the operations manager is on
timing and quality of products because if raw
materials are converted into finished products
on time then the company will be able to
deliver the products to the end user that is
consumer on time thus improving the efficiency
of the company besides operation management
has to ensure that quality of products is good
and same as it will lead to enhancement of the
brand image of the company as far as quality of
products is concerned.

3. Closer to Employees and Customers
- Operations management is very close to both
employees of the company as well as customers
of the company and we all know that
employees and customers are the backbone of
a successful company.
- In simple words operations, management is a
link between employees and top management
and that is the reason why any issue of
employees related to the workplace can be put
forward to top management by the operations
manager, similarly, customers requirements, as
well as feedback regarding company’s product,
goes through operations management which
can be used by top management of the
company to alter its plans and policy so as to
ensure that customer get what they want.
PROCESSES AND BEST PRACTICES
Operations Management: Processes & Best Practices
- Operations Management influences every part
of how you run a company. That includes how
you produce a product or service, how you track
and improve your efficiency and how you
contribute to the bottom line. Simply put,
operations management drives efficient
workforces, processes and supply chains.
- This guide explores the types of operations
management and how they bring value to a
business. Explore the ins and outs of operations
management strategy and learn the best
practices to achieve success.
Key Takeaways
- Operations Management focuses on multiple
aspects of an organization’s day-to-day
operations, not just resolving the inevitable
one-off problems that arise.
- Without operations management, critical
business functions like R&D, client service
delivery, information technology and inventory
control are prone to mismanagement and
underfunding.
- Behind most successful supply chains is solid
operations management because it provides
managers the means to direct resources toward
desired results.
Purpose of Operations Management
 One purpose of operations management is to
promote and support efficient business
processes. Common practice focuses on the
staff, processes and physical resources required
to operate a business.
 Operations Management also refers to how an
organization coordinates and oversees the flow
of information among its departments; how
successful it is at complying with business and
regulatory requirements; how well it ensures
customer satisfaction; and how efficiently it
manages daily operations, not just resolving
problems that occasionally arise.
Goals of Operation Management
 Many goals of operations management are
about maximizing the organization’s efforts,
mainly around producing goods and/or services
and managing supply chain and infrastructure.
The focus is on controlling costs, maximizing
profitability and properly allocating resources.
 Operations managers seek to reduce operating
costs by coordinating business tasks, ensuring
qualified people are in the right positions and
continuously monitoring performance metrics.
Importance of Operations Management
 An effective operations management practice
makes a business more competitive and
prevents it from wasting time and money on
activities that don’t forward the company’s
strategic vision. An effective operations
manager ensures the organization meets
business goals.
 Operations Management is necessary for
companies to stay competitive in any industry,
but healthcare, technology and manufacturing
 firms often have a particular focus. Without
efficient operations management, critical
business functions like research, client service
delivery, IT and inventory control may fall prey
to mismanagement.
Types of Operations Management
There are three main types of operations
management that focus on the objective, tasks and
individual employee. Which you use depends on your
company’s needs and goals, and a manager might use
different types based on the situation.
1. Objectives Management
- Setting priorities, making operational decisions
based on business goals and aligning operations
to support overall company objectives.
2. Task Management
- Managing daily operations based on work in
progress and linear workflows to assign tasks
before moving to the next phase.
3. Individual Supervision
- Using real-time information from managers and
employees on the ground performing the work
to optimize operations.
- Some facets of operations management may
require additional functions. For example, tasks
may consist of planning and researching;
creating operational budgets; and managing
physical inventory, supply chains and vendors.
- In addition to the types of business functions,
there are three categories of modern
operations management environments:
a. Centralized:
- Shops with centralized operations management
typically use one central control system to
manage essential supply chain functions and
oversee multiple employees who work in one
location.
b. Decentralized operations management uses
multiple systems, including advanced
infrastructure and technologies like web
applications and cloud databases, to coordinate
work across global supply chains and multiple
locations.
c. Hybrid:
- A hybrid operations management environment
leverages the advantages of centralized and
decentralized operations. For example, you
might have a centralized production center with
unified manufacturing and warehousing
capabilities and equipped with an automated
infrastructure connected to cloud-based
networks for real-time monitoring
What is today's operation management environment?
- A concept that takes a total system approach to
creating efficient operations: Large,
sophisticated software systems used for
identifying and planning enterprise-wide
resourceso Business Management vs.
Operations Management
- Companies may combine the practices of
business and operations management, but
there is a difference. Business management
focuses on long-term planning, while operations
management concentrates on daily activities.
- Operations Management is a broad term used
to describe the process of overseeing day-to-
day activities at a business. These functions
include scheduling staff, making payroll,
receiving and processing payments, organizing
equipment and supplies and more.
- Business management focuses on planning and
strategizing for future results. Business
management requires extensive general
knowledge and incorporates external factors,
while operations management requires a high
level of operational expertise.
Examples of general business management goals
might include maximizing revenue, minimizing costs and
maintaining customer satisfaction. Operations
management goals include:
 Maximizing resources for research and
development
  Environmental protection
 Maintaining quality control in manufacturing
 Meeting financial obligations
 Maintaining industry-specific legal and
compliance requirements
Operations Management Example
 First is a manager who oversees company’s
production, workflow, inventory, equipment
and people. Another one is a manager
overseeing a service, such as IT.
 OM field has evolved to include service-related
tasks involved in making efficient, value-driven
operational decisions. For example, IT
operations management includes maintaining
the hardware and software to enable IT
strategy, planning, decision- making, research
and technical support.
 Operations workflows in IT ops management
include the techniques that support the
organization’s efficient and safe use of
technology resources and deal with the design,
implementation, administration, monitoring
and performance of security measures in
information systems. Those tasks protect the
integrity, confidentiality and availability of data.
This role requires a comprehensive knowledge
of IT security policies and operational
awareness combined with proactive thinking
and problem-solving skills.
Operations and Supply Chain Management
- Operations management is vital for any
company that relies on logistics management
and supply chain. That practice protects supply
chain operations, boosts productivity and
reduces costs.
- Operations management is critical in companies
that have complex supply chains because it
provides a framework for process-specific
technology, tools and activities to support a
steady flow of materials and finished goods and
gives managers the means to efficiently direct
resources toward reaching goals. Operations
managers rely on strong logistics management
and supply chain management.
- A mature operations management practice
helps create processes and systems to manage
and measure supply chain activities. For
example, when customers cancel orders or
return goods to the warehouse, the operations
management team is responsible for having
procedures in place to reduce administrative
overhead, adjust production levels and/or
maximize the resale value of the items.
- Effective operations management touches all
aspects of essential work, including supply
chain, and ensures the company is meeting key
performance indicators (KPIs). Managers use
operations management KPIs to make informed
decisions and coordinate efforts across the
supply chain and organization as a whole.
Operations Management Process
- Operations Management Process is about
making a company’s daily actions as sharp and
effective as possible. This process involves
smart use of resources and data to reach goals
while keeping costs down.
- Operations Management also refers to the
processes, tools and resources necessary to
support an organization’s full workflow. It
requires communication with clients,
stakeholders and business units.
There are three categories of operations management
processes, based on desired business outcome.
Included are:
1. Implementation: Designing and engineering
infrastructure and systems so business
operations function efficiently.
2. Optimization: Ensuring that staff and
infrastructure serve the business’s goals as
effectively and efficiently as possible.
3. Improvement: Introducing operational methods
that previously did not apply — for example,
remote work — and maximizing the efficiency
and effectiveness of existing processes.
 Ideal operations management process for a given
company varies by industry, company size and other
factors. Generally, it captures the process of managing
the daily flow of tasks and information to ensure
consistent and effective performance across projects.
This process can include variables such as finance,
human resources, information technology, inventory,
facilities management, and more.
Best Practices for Operations Management
Operations Management best practices start with
modern methods that allow employees to do their jobs
efficiently and deliver a desirable product or service to
customers. However, best practices may vary by
company and need to evolve in tandem with changing
priorities.
While there is no single path to efficient operations,
organizations and individuals have found effective ways
to improve modern operations management. Those
included are:
1. Use technology to gain efficiency
- As workforce automation eliminates more and
more routine business processes, modern
operations managers optimize operational
capabilities using data-led design and
engineering.
2. Turn to data for decision-making
- Modern ops management strategies focus on
making sound business decisions based on data-
driven analysis rather than relying solely on past
results, employee and customer behavior and
personal biases.
3. Use operations management for business
processes.
4. Use operations management methods: for
business process redesign (BPR) and business
process automation (BPA) projects.
- BPR for operations management refers to
overhauling critical business processes using
information and data gleaned from operations
management performance metrics. BPR can
improve return on investment, reduce
operational costs, increase production capacity
and enhance service capabilities
- Business Process Automation (BPA) for
operations management refers to using
technology to assist with or replace manual
tasks and processes. BPA can increase
efficiency, save time and money, reduce errors
and increase transparency. Automating
operations management is most effective when
replacing tasks that involve in-efficient use of
time and resources.
Benefits of Operations Management
• Giving to company a competitive advantage
• Increasing profitability
• Increased product quality
• Ensures to comply with Government regulations
• Increased customer satisfaction
• Helps in waste reduction
• Increased teamwork