Operations management is a business practice that focuses on turning resources into quality products and services. It involves overseeing the organization's production processes to create the highest level of efficiency and profitability. Operations management (OM) is the administration of business practices to create the highest possible level of efficiency within an organization. It deals with converting materials and labor into goods and services as efficiently as possible to maximize an organization's profits. Operations management teams strive to balance costs with revenues to achieve the highest possible net operating profit.
Operations management is primarily concerned with planning, organizing and supervising in the contexts of production, manufacturing or service delivery. As such, it focuses on delivery, ensuring that an organization successfully converts inputs into outputs in an efficient manner. The inputs themselves could represent anything from materials, equipment and technology to human resources, such as personnel or workers. Therefore, operations managers are responsible for managing activities that are part of the production of goods and services. Their direct responsibilities include managing the operations process, including design, planning, control, performance improvement and operations strategy.
Their indirect responsibilities include interacting with managers from other functional areas of the organization whose functions have an impact on operations. These areas include marketing, finance, accounting, personnel and engineering. A closed system mentality can occur when operations functions lose contact with external customers and suppliers and focus solely on the transformation process they control. A stereotypical example of an operations manager would be a plant manager in charge of a factory, such as an automotive assembly plant. Supply chain management oversees every touchpoint of a company's product or service, from creation to sale, making it an important aspect of managing since doing things right or wrong affects efficiency, costs and profits. For example, you may not have participated (at least in the last month) in the design of the operating system, so you may not have made any decisions that pertain to the cells in column A, although you will almost certainly have found some examples to put in column B and perhaps also in column C.
David Garvin's article discussed how a process perspective can enable managers to gain a greater view of organizational performance management. Qualified supply chain management requires a perfect link between a company's forecasting and logistics processes, just as successful development of new products depends on well-designed planning and strategy formation processes. Some managers have a specific and central role in managing operations, such as a production manager in a factory or an operations manager in a hotel chain. Therefore, operations management must focus its attention on key interfaces within the organization, as well as on the interfaces between the organization and its customers and external suppliers. Establish strong lines of communication with your entire team early in the process, and then be sure to maintain that communication during and after the operations management analysis begins. It also analyzes the role of operations managers, particularly emphasizing the importance of focusing on suppliers and customers outside this limit as well as other aspects of the external environment of the operations system. A fundamental function of operations management relates to inventory management through the supply chain. When most managers think of operations management they view it as part of a restructuring of internal practices and procedures.
The Cass Business School in the United Kingdom offers a specialized master's degree in Global Supply Chain Management (GSCM).