What Is Operations Management?

Operational excellence is fundamental to the success of any business. For many decades, it was overlooked as a decisive contributing factor. Today, that is no longer the case. A variety of business trends have put operations management in the spotlight including a growing need for business agility, digital transformation and ongoing disruptions to the global supply chain. In order to keep up with constant change, companies are reexamining and rethinking their processes to improve efficiency, promote sustainability and establish a competitive advantage. To get it right, they are relying on operations managers.

If you are considering a career as an operations manager, your success depends on a thorough understanding of the role, responsibilities and requirements, along with how the functions of an operations manager play out in diverse industries.

Operations Management Defined

Operations management is a critical aspect of a business that deals with the design, execution and control of systems and processes to produce and distribute goods and services. It involves managing the day-to-day activities and tasks required to create and deliver products and services to customers focusing on achieving high levels of efficiency, quality and customer satisfaction.

One of the key objectives of operations management is to ensure that resources — such as labor, materials and equipment — are used effectively to produce goods and services. This requires careful planning and coordination of all activities involved in the production process, from sourcing raw materials to delivering finished products to customers as expeditiously and cost-effectively as possible. Operations management also requires expertise in the latest technological advancements and the skills to implement innovative solutions to improve the efficiency of production processes.

In addition to production and process management, operations management includes supply chain management, inventory management and quality control. Supply chain management involves managing the relationships with suppliers and distributors to ensure that the right materials are available at the right time and price. Inventory management consists of making decisions about how much inventory to hold and when to reorder, ensuring that the business has sufficient stock to meet customer demand.

Finally, quality control is a critical aspect of operations management so that goods and services are produced to meet or exceed customer expectations. Quality control processes involve monitoring and evaluating the production process to identify and resolve any issues that may impact the quality of the final product.

Core Functions of an Operations Manager

Operations managers are involved in administrating and continually improving business practices and processes. Some of the day-to-day management functions include:

  • Developing and evaluating business processes, constantly looking for efficiency improvements
  • Generating new product ideas to meet consumer needs
  • Supervising teams and providing objectives, milestones and goals to reach
  • Streamlining and refining techniques, especially to result in greater speed and cost-efficiency
  • Working with executives to devise more cost-effective operational strategies
  • Managing and improving processes for supply chain and logistics operations
  • Working within budgets and making cost-effective financial decisions
  • Forecasting consumer demand for products and planning to meet demand
  • Building internal relationships with stakeholders and decision-makers, as well as external relationships with business partners and vendors

Why It’s Critical for Business Professionals

For a business to succeed and turn a profit, its operations are crucial. Business operations management ensures that processes are efficient, equipment is fit for purpose and physical locations are profitable, ethical and safe. An effective operations management system is essential to meet rising customer expectations and product and service quality standards and build brand equity and the business.

Operations Management in Practice Across Industries

The specific focus and responsibilities of operations management will vary based on the industry and the specific organization. Some examples of operations management in different sectors include:

Manufacturing: This involves the production of tangible goods. Operations management focuses on supply chain management, inventory and quality control.

Healthcare: Operations management in this industry involves the control of patient flow, allocating resources such as staff and equipment and effectively using technology.

Retail: This involves managing the supply chain; ensuring efficient use of space in stores, forecasting and purchasing inventory; and implementing systems for inventory control and customer service.

Hospitality: This sector involves oversight of food and beverage services, managing housekeeping and maintenance and coordinating events and conference services. Operations management helps keep these elements working together.

Logistics and supply chain: Operations management is essential in this industry, which involves the planning and management of the movement of goods, finances and information from one place to another.

Prepare for a Career in Operations Management

The Radford University Master of Business Administration (MBA) online curriculum develops problem-solving skills designed to reduce uncertainty in the decision-making environment of operations and production in manufacturing and service firms. In particular, the Operations Management course emphasizes mathematical models, and the Strategic Management course emphasizes environmental analysis for decision-making. Elective courses — and including High Performance Innovation: Innovative People, Processes, and Organizations and Predictive Analytics and Data Mining — enable students to focus on specific specializations to develop the aptitudes necessary to meet the growing demand for well-qualified operations managers.

Learn more about Radford University’s online MBA program.

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