Operations management (OM) concerns with managing the entire production or service system that converts inputs to outputs. Inputs include consumer requirements, raw materials, labor and energy while outputs are products and services. For example, suppose an organization makes bread. Some of the operations management decisions involve the following: purchasing flour and other ingredients, hiring and training workers, location and layout of the factory, purchase mixing tools and other breadmaking equipment. The goal of operations is to produce products using as few resources as needed, manage quality and create services meeting customer requirements. OM covers all sectors like technology, mining, manufacturing, banking systems, hospitals and many others. Together with supply chain, marketing, finance and human resources, operations is among the significant functions in an organization. The operations function requires management of both the strategic and day-to-day production of goods and services.
Due to its multi-disciplinary nature and intersection with other major functions in an organization, operations management is often misunderstood. However, operations management is vital to the success of businesses the world over. Let us delve deeper into operations management and its many aspects.
The roles of operations management
Operations management focuses on the processes to produce and distribute the desired products and services. The emphasis is on the efficiency and effectiveness of processes. It means that the individual in charge of operations management will be required to perform various strategic functions. This includes the following roles:
Product Design
OM is involved at the earliest stage of production. It ensures that the products sold to consumers meet their needs and match current market trends. The operation manager participates during product design as they have cross-functional knowledge of all processes used to create the products or services. Consumers are more interested in the quality of the product than the quantity. Hence, the organization creates systems for products to meet consumer needs.
Forecasting
Forecasting is inferring future events based on past data. Operations managers are required to forecast consumer demands. He/she will use past and present data on using the company’s products to determine future trends in consumption. The forecasts will help the company know the volume of products needed to meet the market demand.
Supply Chain Management
Supply chain management (SCM) concerns with managing the production process from raw materials to the finished product. It controls everything from production, shipping, distribution to delivery of products. SCM is a separate function but the operations manager oversees the supply chain process. The operations manager maintains control of inventory, the production process, distribution, sales, and supplier sourcing at reasonable prices.
Delivery Management
Operations managers ensure that products and services are delivered to the consumer promptly. They must actively seek consumers’ feedback to ensure that the goods delivered are what the consumers ordered and meet their functionality needs. Any complaint or feedback, the operations manager must direct it to the correct department.
Unlike other organizational functions, like marketing and finance, where they are responsible solely for their departments, operations management is cross-functional. It assumes an array of responsibilities across multiple disciplines.
The importance of operations management
Successful operations management has many benefits for the organization. This includes the quality of the products and services, customer satisfaction, efficiency of the processes and employee satisfaction. Below are some of these benefits:
Product/service quality
From the product design until delivery to customers, operations managers are involved every step of the way. This why a great operations manager will be an operations manager who will positively impact the product or service quality.
Customer satisfaction
A customer review can make or break a business. It is therefore vital to ensure that your customers’ needs are at the forefront of your product or service. It is the responsibility of the operations manager to audit the quality management process so that a product/service meets the customers’ needs. If the organization is a service provider, the operations manager ensures that the service quality is the best.
Revenue Increase
More revenue follows from satisfied customers. The primary function of operations management is to ensure that the entire production process results in products or services that delight customers. The revenue growth then helps launch new and innovative products/services. It can also be used to increase resources and technology.
Competitive advantage
An effective operations management also means a business can be ahead of its competition. If internal and external factors are managed well within an organization, it results in a good performance within the market.
Compliance
Operations managers see to it that the business complies with with rules and regulations. The manager will have specific controls for processes and products to adhere to rules – from health, environmental, safety and commercial and many others.
Motivated employees
Operations managers make sure that employees know their roles within an organization. To maximize and make production, operations managers help define the roles within the production process. As a consequence, employees contribute in a meaningful way.
The ideal skills of operations managers
Why do employers want cross-functional skills for operations managers? The cross-functional nature of operations management entails a working knowledge of all areas of the production process. This is necessary for leaders at the senior management, which includes operations managers. These cross-functional skills and working knowledge of the production process allows operations managers to steer the company towards an efficient and effective production process.
Here are the most critical skills that operations manager must have:
Organizational Abilities
A good operations manager focuses on different projects without getting distracted by the many processes. He/she plans, executes, and monitors each project to the end without losing focus. Lack of organizational skills could lead to uncompleted tasks, inefficient communication and more time spent than necessary in completing tasks.
Coordination
Coordination involves carrying out specific activities simultaneously and switching between them with ease. It also deals with interruptions, obstacles, and crises. It is also efficiently going back to the normal routine functions to prevent further disruption.
People Skills
This is perhaps the most critical skill for operations managers because they deal with people in the entire production process. They must know how to relate and communicate with employees, other members of senior management and customers. An operations manager knows how to balance between the delicate communication lines. He/she relates to people from both the professional and personal levels.
Tech-savvy
In the digital age, an operations manager needs to tech-savvy to design processes that are both efficient and tech-compliant. Modern organizations are becoming increasingly tech-dependent to gain a competitive advantage. Most of the processes conducted manually, such as procurement, must transition to a more efficient automated process. When an operations manager is familiar with the latest innovations in the tech industry, he can use innovations to improve internal processes.
Best practices in operations management
The role of operations management is to contribute to the bottom line. This is done by increasing productivity, decreasing waste generated, and generating profits in the process. This is achieved via the following best practices:
Equipment Upgrades
Operations managers analyze work functions and determine what equipment upgrades would improve productivity. A solid equipment upgrade plan as a capital expenditure ensures that production is done with the most efficient equipment.
Communication Coordination
Improved communication within an organization increases productivity. A great and adaptable communication plan ensures information is sent from one department to another quickly and accurately. It increases the pace at which the company operates and ensures that all necessary parties get the information they need to be productive.
Revenue Collection
By analyzing revenue collection procedures, the operations manager creates ways of collecting revenue quickly to make sure the company has cash on hand.
Training
Analyzing work functions is one of the many tasks that operations managers perform daily. Operation managers work with the human resources department and department managers to develop efficient ways for employees to do their jobs.
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