Table of Contents
- Understanding Operations Management
- What Is Operations Management?
- What Operations Managers Do
- Important Note on Operating Activities
- Operations Management Tools
- Operations and Supply Chain Management (OSCM)
- What Is the Purpose of Operations Management?
- What Education Is Required to Become an Operations Manager?
- What Is the Difference Between an Operations Manager and a Project Manager?
- The Bottom Line
Understanding Operations Management
Let me tell you directly: operations management employs and prioritizes business practices in an organization to achieve maximum efficiency. As someone who's looked into this, I see that operations managers coordinate the activities of all departments within a company to optimize everything from production to end-product distribution.
What Is Operations Management?
Operations management, or OM as it's often called, plans, organizes, and revises business practices to hit maximum efficiency and profitability. You need to know that operations managers oversee multiple departments in a company, helping them coordinate to work toward the company’s goals. These teams balance costs with revenue to achieve the highest possible net operating profit.
Key Takeaways
- Operations management is the practice of administering business processes to maximize an organization’s efficiency.
- Operations managers coordinate new processes while reevaluating current structures.
- Operations managers balance costs with revenue to maximize net operating profit.
What Operations Managers Do
Operations managers coordinate new processes while reevaluating current structures. Organization and productivity drive their work, and it often requires versatility and innovation. They might determine the size of manufacturing plants or implement the structure of information technology networks. They oversee inventory management processes, work-in-process levels, raw materials acquisition, quality control, materials handling, and maintenance policies.
In their daily responsibilities, operations managers need technical expertise in production automation, data entry, budget tracking, and design. They must have organizational ability to track project files, employee reports, budgets, schedules, and other details related to company processes. Motivational prowess comes in the form of strong leadership skills to motivate others, inspire ideas, and foster a supportive and diverse team. Analytical aptitude is key, including risk analysis and mitigation when initiating new projects—they analyze processes to identify challenges and offer solutions. Decision-making proficiency is essential, especially under stress when there's little time to assess all factors. Finally, they maintain quality standards across raw materials, machinery, manufacturing procedures, packaging, delivery processes, and the finished product.
Important Note on Operating Activities
Remember, the daily activities of a company to produce and sell a product and generate revenue are its operating activities.
Operations Management Tools
Let me explain the tools directly. Business Process Reengineering, or BPR, focuses on analyzing and designing workflow and business processes within a company—it seeks to optimize processes and eliminate redundancies, helping companies dramatically restructure by designing processes from the ground up. Six Sigma, introduced by Bill Smith at Motorola in 1986, improves manufacturing quality; the 'six' references control limits at six standard deviations from the normal distribution mean, using tools like trending charts, potential defect calculations, and other ratios. Lean Manufacturing aims to reduce waste and improve continuity in supply chain management, targeting the flow of products from production to customer delivery.
Operations and Supply Chain Management (OSCM)
A critical function here is inventory flow through the supply chain, known as operations and supply chain management or OSCM. Operations management professionals understand logistics, global trends, customer demand, and available resources for production. They approach the acquisition of materials and the use of labor in a timely, cost-effective manner to deliver customer expectations. Inventory levels are monitored to ensure ample quantities are on hand. They find vendors that supply the appropriate goods at reasonable prices and deliver when needed. They use formulas like the economic order quantity to determine inventory order sizes and how much to hold on hand. Managers follow up with customers to ensure products meet quality and functionality needs, then distribute feedback to departments for improvement.
What Is the Purpose of Operations Management?
Operations management evaluates the production process and business operations to create an efficient outcome. Professionals in OM balance operating costs with revenue to maximize net operating profit.
What Education Is Required to Become an Operations Manager?
Operations managers usually hold a bachelor’s degree in a business field. A master of business administration (MBA) in operations management provides a global perspective on industry trends and awareness of financial regulations and political uncertainties that can affect an organization. It also gives a solid grasp of inherent complexities and the tools needed to respond effectively to change.
What Is the Difference Between an Operations Manager and a Project Manager?
An operations manager coordinates the activities of all departments in a company to ensure smooth and efficient running. A project manager plans and executes projects with a firm start and end time, coordinating input from various employees on the project.
The Bottom Line
Operations management is the process of prioritizing and employing business practices to achieve maximum efficiency. Operations managers balance the efficient use of resources, including staff, materials, equipment, and technology.
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