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7 functions of operations management (plus the skills you need to master them)

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Companies have operations departments to keep everyday functions on track. The operations department focuses on maintaining the efficiency of the production process and helps teams make smart decisions. In this piece, you’ll learn the seven functions of operations management. These functions outline the essential duties of the operations team.

Operations management keeps processes running smoothly within organizations. Think of your company as an airport. Each team is an airplane taking off in different directions with their projects and ideas. As an operations manager, you’re the air traffic controller keeping everyone and everything on track. 

Operational planning

Product design

Quality control

Forecasting

Supply chain management

[inline illustration] functions of operations management and skills needed (infographic)

Operations is involved in almost every aspect of an organization. For example, if a project manager wants to hire a new team member, the operations team will first perform a cost-benefit analysis . When the production team wants to create a new product, the operations team starts by assessing customer demand. 

You may spend more time managing some functions than others. For example, if your company doesn't provide a physical product, you likely won't focus much on supply chain management. But understanding every operational function is the best way to prepare to work in any industry. 

1. Operational planning

Operational planning is the foundational function of operations management. Your duties within this function may include:

Monitoring daily production of goods

Managing and controlling your inventory

Keeping tabs on team member performance and well being

Production planning

The role of operations management is to uphold operational efficiency . Always be on the lookout for new advancements to remove bottlenecks and improve your operations strategy.

Skill needed: Resourcefulness

When you’re resourceful, you’ll have an easier time maintaining business processes. As an operations manager, you’ll have to manage your team and keep the company’s wellbeing front of mind. To handle these changes, you need to be fast on your feet. In situations when you don’t have the tools you need at your disposal, it’s critical to think quickly and use what you have to come up with solutions. 

Finance is an essential—and universal—function of operations management because every company strives to reduce costs and increase profits. As an operations manager, you’ll ensure company leaders keep the budget in consideration when they make important decisions. Some of your tasks may include:

Creating budgets to meet production goals

Finding investment opportunities

Allocating budgets and managing resources

You may wonder how the financial duties of the operations team differ from those of the finance department. The finance department will handle everything from revenue to salaries. Meanwhile, you should limit your financial participation to things relevant to the production process.

Skill needed: Financial planning

Financial planning happens when you determine if your business has the budget to achieve strategic objectives and goals. To push your company leaders toward financial success, you’ll need to plan ahead.

Keep production costs low by finding high-quality vendors with low prices. You want to create a top-notch product that stays within your customer’s budget.

3. Product design

Product designers may be the creatives of the team, but the operations team is the eyes and ears that gathers information from the market. Once you identify customer needs and marketing trends , you'll relay what you've learned back to the designers so they can make a strong product. 

Specific tasks your team may handle in this function include:

Consolidating market research into digestible results

Communicating results to a product design team

Offering design direction to help designers devise a product

Without the operations team, the product design team would have trouble knowing what to create. The market is always changing, and creating a successful finished product requires extensive research.

Skill needed: Data interpretation

The ability to interpret data is a key skill for this function of operations management. As the operations manager, you must turn data into understandable directions. Your goal should be to clearly communicate how you want your product to match or exceed other products on the market. 

Once you have a plan in place, streamline communication across teams by using one platform or tool. Create a central project plan to track action items, information, and feedback. Then, share it in a project management tool so everyone can access it and view changes in real time.

4. Quality control

Quality control goes hand in hand with product design. After the production team creates a product, the operations team will ensure it meets quality standards. You’ll need to test the product to guarantee there are no defects before releasing it to the public. Your tasks for quality control may include:

Performing risk analysis to identify potential problems

Inspecting products to make sure they meet quality standards

Creating tests to control your product quality

Documenting any defects or deficiencies of products

The level and standards of quality control vary by industry—one of the first things your team should do during the quality control process is to perform market research to determine what quality standards should be in your industry. Once you’ve outlined a set of quality standards, use them as a benchmark for quality management moving forward.

Skill needed: Conflict management

Not every product will be top quality after one round through the production process. It may take many rounds of design and a few trips back to the drawing board to create a quality product up to standards. 

This type of feedback will ultimately make your product the best version of itself, but it can be hard to hear in the moment. In order to excel at this function of operation management, build strong conflict management strategies . That way, you can weather these times of uncertainty and create products that wow customers.

5. Forecasting

Forecasting isn't just a term for the weather—operations teams also use forecasting to predict the demand for a product. Your team can master forecasting by trying to answer hypothetical questions like:

What will the demand for this product be in the future?

What marketing and promotions should we plan for this product?

What sales initiatives should we plan for this product?

Can we estimate the storage costs we’ll need for inventory?

Can we determine the cost of sourcing and raw materials?

Skill needed: Data driven decision making

Data driven decision making will serve you well in many functions of operations management. The only way to make accurate predictions is to base your predictions on facts. Start by forecasting product demand by analyzing past trends. Then, communicate forecast results to department leaders so they can adjust future plans accordingly.

6. Strategy

Strategy is a broad function of operations management that can involve operational planning , monitoring, and analysis. The goal of strategic management is to make sure production decisions align with business goals. Your company’s business objectives may include: 

Prioritizing customer satisfaction

Improving the production system 

Controlling costs while maintaining a competitive edge

Your job as operations manager is to find ways to meet the business objectives of your company. Some strategies you could use for the examples above include:

Analyzing your inventory: To prioritize customer satisfaction, start by analyzing your inventory. This can increase customer satisfaction by ensuring you’re always able to meet customer demand. 

Collaborating among teams: More collaboration among teams will improve the production system because communication will increase, resulting in less room for error.

Prioritizing green processes: Switching to more environmentally friendly processes can save money in the long run and keep customers invested in your brand.

Skill needed: Critical thinking

Critical thinking is important for the strategic function of operations management because it’s how you create thoughtful ideas and tie them back to fundamental points. When you logically think through concepts, you’re able to develop strong strategies. You can use research and data to support your ideas and then use what you’ve learned to make well-supported decisions for your team. 

7. Supply chain management

If your company produces products or services, your company will need supply chain management for sourcing, producing, and shipping. You may have a separate department for the supply chain, but supply chain issues related to internal production will be yours to handle. The supply chain should flow in a cyclical fashion as follows:

Raw materials

Production/manufacturer

Distributer

The supply chain is cyclical because once you analyze consumer demand, you'll source more raw materials and go down the chain again. 

You don’t necessarily have to follow each of these steps. For example, if you work at a small company, you may send products or services directly to consumers. This cuts out distribution and retail costs, but you’ll still need to keep the supply chain intact. If there’s a bottleneck in one stage of the supply chain, it can wreak havoc on every other stage.

Skill needed: Problem-solving

As an operations manager, you'll need to organize, plan, and delegate . But to take your skills a step further, you must be a good problem-solver as well. There are many problem-solving strategies you can study and keep in your toolbox—and your team members will appreciate your quick solutions when things get tough. 

The importance of operations management

The functions of operations management are critical for every business—whether you’re in the manufacturing or tech industry. While tech companies may find finance and strategy more important and manufacturing companies may focus more on the supply chain, these seven functions draw a full picture of how to run any internal team.

[inline illustration] importance of operations management (infographic)

Companies make many decisions through the production process, and the operations team often serves as a voice of reason between departments. Without operations management, departments may have trouble aligning decisions with company goals, avoiding conflict, and keeping operations running smoothly. In particular, operations management:

Motivates team members: The operations team motivates team members by keeping the workplace organized and improving workplace conditions. Team members are more excited to work when they have a functioning work environment.

Utilizes resources: Another part of your job as operations manager is to build a budget that uses the company's resources wisely. Try to reduce costs whenever possible, stretch resources to fit project needs, and keep resources from going to waste.

Enhances collaboration: You can enhance team collaboration within your organization by improving decision making. When you make good decisions, you establish trust among teams, which results in the delivery of top-quality products to customers. 

Helps achieve objectives: You'll help achieve business objectives by serving as a checkpoint for big decisions. When department leaders consider changes or initiatives, you’ll assess whether their ideas align with company goals.

Improves productivity: Increase productivity by making the product’s delivery process more efficient. Team members in your organization may complete their work faster when you make improvements to production.

Understanding the operations team in relation to other departments

An operations department can take on different roles depending on company size and the product. If you’re a small company, the human resources team may share some duties with the operations team, like financial planning. But larger manufacturing companies often have clear lines between operations and human relations. In this setting, you’ll likely work hand-in-hand with a supply chain management team.

[inline illustration] how an operations team might fit into an organizational structure (example)

You may wonder why supply chain management is one of the main functions of operations management if it’s also a separate department. Even though these two processes are typically closely tied together, the teams focus on slightly different priorities.  Traditionally, operations management involves the internal part of production, while supply chain management involves the external part. 

Guide teams toward efficiency with Asana

The goal of operations management is to make your decisions smarter and your production leaner. Whether you’re keeping daily projects on track, monitoring product quality, or developing business strategies, Asana can give you the high-level perspective you need to do it all. 

Operations Management: Processes & Best Practices

task of operation management

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.

Inside this article:

  • Types of operations management
  • Business management vs. operations management
  • Operations management process
  • Best practices for operations management

What Is Operations Management?

Operations management is the practice of handling day-to-day business functions in a manner that is efficient and that maximizes profitability. This discipline focuses on formulating strategies and taking actions to optimize production and supply chain performance.

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.

What Is the Purpose of Operations Management?

The purpose of operations management is to promote and support efficient business processes. The 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

The goals of operations management are about maximizing the organization’s efforts, mainly around producing goods and/or services and managing the 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

The three main types of operations management focus on the objective , the task or the individual employee . Which you use depends on your company’s needs and goals, and a manager might use different types based on the situation.

Objectives management:

Setting priorities, making operational decisions based on business goals and aligning operations to support overall company objectives.

Task management:

Managing daily operations based on work in progress and linear workflows to assign tasks before moving to the next phase.

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:

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.

Decentralized:

Decentralized operations management uses multiple systems, including advanced infrastructure and technology like web applications and cloud databases, to coordinate work across global supply chains and multiple locations.

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.

Operations Management Eco-System

operations management

Strategic vs. Tactical Operations Management Decisions

Strategic operations management focuses on long-term success, while tactical operations decisions are about reacting and adjusting in the short term. Use a combination of these approaches for the best results.

Strategic operations decisions involve estimates, predictions, goals and comparative analyses. This approach concentrates on the future to meet long-term objectives and ensure lasting success. One key aspect is using operational data to analyze results and adjust long-term strategic plans where necessary.

Tactical operations decisions, on the other hand, involve how the company responds to changing operational conditions. For example, an organization might need to adjust production schedules or workforce planning as the marketplace fluctuates.

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 the day-to-day activities at a business. These functions could 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

What’s the Difference Between Business Management and Operations Management?

project management vs operations management

Project Management vs. Operations Management Which One Does Your Small Business Need?

Operations and supply chain management.

Operations management is vital for any company that relies on logistics management and the supply chain. The 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.

What Are the Main Functions of Operations Management?

The main functions of operations management are developing effective processes, ensuring production is efficient and determining the most cost-effective way to achieve goals. Operations managers help organize resources using sound HR concepts, the right technology and up-to-date best practices.

Functions often are cross-departmental and include:

  • Process analysis
  • Financial oversight
  • Risk management
  • Data privacy and security
  • Quality assurance
  • Preparing and disseminating reports
  • Scheduling staff
  • Providing technical support
  • Managing equipment and supplies
  • Controlling inventory
  • Overseeing external vendors

Operations Management Process

The operations management process is about making a company’s daily actions as sharp and effective as possible. The 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.

Three categories of operations management processes, based on desired business outcome, include:

Implementation:

Designing and engineering infrastructure and systems so your business operations function efficiently.

Optimization:

Ensuring that your staff and infrastructure serve the business’s goals as effectively and efficiently as possible.

Improvement:

Introducing operational methods that previously did not apply — for example, remote work — and maximizing the efficiency and effectiveness of existing processes.

The 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, facilities management, inventory management and more.

Role of Operations Management

The role of operations management boils down to driving optimal results while reducing costs. An effective operations manager allocates a company’s resources to achieve goals and meet standards.

Most companies have an operations department for this reason, although the specific role may vary from company to company and industry to industry. The responsibilities of an operations manager include the overall direction of company operations, financial planning and resource allocation for specific projects and service offerings.

In general, ops managers direct their companies’ day-to-day business activities. They ensure that the workforce conducts daily operations following company policies and standards and relevant laws and regulations. Their key responsibilities include overseeing daily business activities, studying processes and preparing operational and financial reports.

In addition, these managers measure the impact of business operations by collecting, processing and communicating operational KPIs .

Effective operations management requires a holistic view of the business, including resource allocation, documentation review, quality control, coordination of efforts, sharing information across departments and initiating appropriate actions when needed. Typically, operations managers have a cross-departmental view, carry out duties assigned by leaders, ensure the efficient use of resources and help plan and prepare to achieve future goals. Day-to-day operational management tasks include record-keeping and operational reporting .

Depending on company size and scope, ops managers may take on business development or marketing roles. For example, ops management teams may include financial analysts, sales leaders, software developers and IT support. The practice typically includes cross-functional coordination among department heads and units.

Operations Management Example

To understand operations management, consider these examples. The first is a manager who oversees a company’s production, workflow, inventory, equipment and people. Another one in is a manager overseeing a service, such as IT.

The 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.

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. These include:

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.

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.

Use operations management for business processes.

Use operations management methods for business process redesign (BPR) and business process automation (BPA) projects.

BPR for ops management refers to overhauling your 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.

BPA for ops 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 ops management is most effective when replacing tasks that involve inefficient use of time and resources.

Challenges in Operations Management

Operation management challenges include decision-making, resource allocation and time management; the goal is to ensure objectives are met on time and within budget.

Common operation management challenges include:

Business dynamics:

Operations managers juggle multiple business functions and make decisions that touch other departments in areas such as product development, customer support and finance.

Global ops:

Global supply chains challenge operations management to stay current with global market trends and find operational efficiencies across international operating environments.

Advanced technology:

Advances in technology continue to increase the technical complexity of this discipline. Today, ops managers require significant technical proficiency and information management expertise.

Time management:

Operations management problems arise from many places, but the most frequent challenge is inefficient time allocation caused by factors such as labor shortages.

Sustainability:

Evolving regulations and resource shortages challenge operations managers to find sustainable business practice efficiencies that account for future operating environments.

Operations management is partly responsible for shaping the organizational policies and practices essential for safe, efficient and secure departmental functions. It involves planning, controlling, supervising and controlling the work of assigned employees necessary to accomplish set goals and objectives.

An operations manager has two primary purposes: Manage operational resources and meet the organization’s goals and objectives. Understanding common operations issues allow ops managers to prevent or eliminate operational inefficiencies that affect an organization's ability to perform its core functions efficiently.

Human Behavior and Operations Management

The field of behavioral operations management examines the decision-making role. This is key because human beings don’t always base their decisions on logic and factual information.

Many organizations are undergoing a transformation — from being purpose-built for one market to being massively complex with dozens of functions. As a result, operations management techniques must become more agile and cross-functional. Unfortunately, small to midsize businesses may lack cross-functional leadership and accountability in operations management. When leadership is lacking, inefficiencies and behavioral issues can grow and spread throughout an organization.

Research in this field from the Journal of Operations Management focuses on understanding human behavior to improve operations management and realize its benefits. For example, risk aversion is a behavioral issue that research shows can hinder ops management. This issue manifests in many forms and can also harm performance.

An Example of How Technology Fuels Operations Management

The family-owned, online furniture company casalife needed an integrated business solution to become more efficient to stay competitive with larger online retailers. The small retailer couldn’t afford the high up-front IT investment and maintenance costs associated with typical on-premises solutions.

With NetSuite’s SuiteCommerce solution, casalife was able to meet the demands of its ecommerce operations and become more agile and able to take on growth opportunities. The result was an estimated savings of $120,000 a year in personnel and other costs using NetSuite for purchasing, operations management and CRM compared to the competing solution.

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Redefine your operations workflows and more effectively monitor manufacturing processes by integrating industrial monitoring devices and software with NetSuite’s Advanced Manufacturing solution . NetSuite eliminates the gap between operational intelligence and business outcomes with real-time visibility and reporting and customizable operations dashboards that bring clarity and context to ops management.

Gain a more cohesive picture of your manufacturing operations and empower quicker response times to ensure optimal production. The system’s built-in business intelligence toolkit helps you create more informed strategic decisions through real-time analysis of supply chain data that drives system improvement. Empower your ops managers, put ops data into action, and get products to market faster and more efficiently with unified global manufacturing management (opens in new tab) in the cloud.

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Operations Management 101 & 201: Definitions, Pro Tips, Trends

By Kate Eby | May 25, 2017 (updated March 3, 2023)

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The term operations management encompasses planning, implementing, and supervising the production of goods or services. Operations managers have responsibilities in both strategy and day-to-day production, in either manufacturing or services. Sometimes called production management, the field is cross-functional, tying in with other departments such as sales, marketing, and finance. It’s involved in product or service creation, development, production, and distribution. In effect, it connects dots along the value chain.

Technology, ever changing, plays a key role in springboarding constant advancements in operations management (OM). That’s truer now than ever before thanks to budding advancements like self-maintaining smart machines (for production) and drones (for distribution). Companies that use technology well can thrive, and those that don’t may not survive.

“The future of operations management is going to involve increasing automation to the point that we will hardly recognize the way new organizations function,’’ says Iris Tsidon, Co-Founder and CEO of Okapi Vision , a cloud-based key performance indicator (KPI) platform.

 This article will provide an overview of operations management: its history, importance, functions, strategies, principles, and types of production. You’ll also hear from seven operations management professionals about tips, challenges, trends, and the future.

Deeper Definitions: What Does Operations Management Mean?

Operations management refers to the activities involved in overseeing the process of creating goods and providing services, including resources, technology, people, and products. These elements must be well managed in order for the business to remain competitive.

 As we define operations management more fully, we consider these foundations of OM: 

  • Planning: Operations managers must constantly forecast, plan, and adjust to optimize processes based on conditions.
  • Process: Production of goods or services requires having strong, repeatable processes.
  • Efficiency: Managers must troubleshoot bottlenecks, inadequate resources, and downtimes to create optimal efficiency.
  • Cost Control: Production is typically a major part of a company’s cost structure, and you must manage it wisely.
  • Quality: Good quality control is necessary to maintain customer satisfaction and the company’s reputation. Companies can greatly suffer without it.
  • Continuous Improvement: To remain competitive, companies need to have processes in place to consistently seek better ways of doing things.
  • Technology: Underlying all of these foundations is technology. Well-used technology keeps a company ahead of the curve.
  • Profitability: Executed properly, all of the above foundations lead to a strong bottom line.

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The History of Operations Management

Operations management dates back to 5000 B.C. with the Sumerians, who tracked inventories, transactions, and taxes, and has evolved into modern day services like overnight and same-day deliveries. We’ve listed some notable historical highlights below:

  • The Industrial Revolution (1760s to early 1800s) ushered in the foundations of division of labor and interchangeable parts, keys to efficient production. Eli Whitney, inventor of the cotton gin, also manufactured 10,000 muskets by using the concept of interchangeable parts.
  • In 1883, Frederick Winslow Taylor used the stopwatch method to time tasks for complex jobs. This became key for studying efficiency and productivity.
  • In about 1912, Frank and Lillian Gilbreth laid the foundation for predetermined motion time systems (PMTS), which predict the time it takes to complete tasks.
  • In 1913, Henry Ford’s first moving assembly line started rolling, cutting production time for a car from 12 hours to less than three.
  • In post-World War II Japan, Toyota developed just-in-time production (JIT), later called the Toyota Production System. The company designed it to eliminate waste and increase productivity and quality.
  • In 1971, FedEx started overnight package deliveries. Nowadays, Amazon even offers same-day delivery on orders. 

The Importance of Operations Management

Operations management serves as an organization’s engine room , and plans and drives manufacturing and services. Operations managers maximize efficiency, productivity, and profit, which are vital to a company’s growth, survival, and competitive edge.

Most companies have an operations department with many employees and a large budget. Forbes magazine reported in 2011 that three-quarters of CEOs come from an operations background, which shows the importance of understanding how a company functions.

We can also see the importance of operations management in these aspects of a company’s success: 

  • Customer service
  • Product or service quality
  • Correctly-functioning processes
  • Market competitiveness
  • Technological advances
  • Profitability

 It’s no exaggeration to say everything depends on operations.

Functions and Roles in Operations Management

Operations management includes a diverse set of functions and roles, which can differ based on industry and company size. To carry out these tasks well, operations managers need to be organized, analytical, creative, resourceful, versatile, and have strong leadership skills. 

Now more than ever, operations managers need to be tech-savvy to compete in a rapidly changing market. Technical specialization can arm you with the analytical and problem-solving skills vital to succeeding in this field. We’ve listed the major functions and roles required of a modern operations manager below:

  • 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
  • Conducting procurement and purchasing
  • Managing logistics
  • Managing transportation and distribution
  • Managing and maintaining facilities
  • Conducting enterprise resource planning (ERP)
  • Forecasting for planning
  • Capacity planning
  • Navigating industrial labor relations
  • Analyzing the value chain
  • Optimizing resource allocation
  • Eliminating waste and bottlenecks
  • Continuously improving processes
  • Executing a company’s strategic plan

The Relationship of Operations Management to Other Departments

Operations managers facilitate cooperation between departments and ensure that department and company goals are aligned, and to standardize logistical approaches to budget and project constraints. Operations teams must collaborate with all other departments to be effective.

task of operation management

Operations Management Strategies

Operations managers are deeply involved in strategy, in addition to their daily production roles. From designing and testing processes to facilitating interdepartmental collaboration, we have outlined some key strategy and tactics points below: 

  • Data Use: Analytics are essential for strong planning, adjustments, and decision making. Two common types are efficiency metrics and effectiveness metrics.
  • Inventory Analysis: To manage inventory in the supply chain, ABC analysis (also called Pareto analysis ) comes into play. This method divides inventory into three categories: A, B , and C . Category A has the highest value and tightest controls, and Category C has the lowest value and loosest controls.
  • Data Challenges: Data is often siloed, which makes it difficult to compare. But newer systems and setups make this process easier and help analysts and managers to examine data in new, helpful ways.
  • Process Design: Researching, forecasting, and developing a sound process takes expertise and energy, but the results can be lasting.
  • Forecasting and Goal Setting: The best forecasting often combines a look at historical data with an analysis of changing conditions.
  • Collaboration Among Departments: With good communication and collaboration, operations management can work effectively with finance, sales, marketing, human resources, and other departments.
  • Being Green: Ecological soundness has become a strategic and legal necessity at companies nowadays, especially in manufacturing.
  • Managing People: With all the advancements in machinery and technology, people remain critical to the equation, though often in different types of jobs.

Levels of Operations Management

Operations management includes three levels: strategic, tactical, and operational. The strategic level defines company goals, and the tactical level outlines a plan to implement that strategy. The operations level contains the daily operations required to produce the desired outcome.

Principles of Operations Management

There are many widely accepted principles of operations management. Most experts advise a focus on organization, risk management, and adaptation. We’ve outlined two prominent lists of principles by experts below:

Randall Schaefer, CPIM, described The 10 Principles of Operations Management at his presentation at the 2007 conference of the American Production and Inventory Control Society ( APICS ).

  • Reality: There is no universal solution to the problems in your business.
  • Organization: You must organize all aspects of production into a coherent whole.
  • Fundamentals: Adhere to fundamentals, such as accurate inventory records.
  • Accountability: People try harder when they’re held accountable.
  • Variance: Variance is part of every process.
  • Causality: Problems are often symptoms. Get to the root cause.
  • Managed Passion: People with a passion for their jobs will drive your company.
  • Humility: You don’t have to know everything.
  • Success: Define success, and change with the market.
  • Change: Every manufacturing solution is temporary.

 Another set of operations management principles comes from author Dr. Richard Schonberger . His 16 principles are: 

  • Team up with customers. Know what they buy and use.
  • Engage in continual, rapid improvement.
  • Maintain a unified purpose. Involve employees in strategy.
  • Know the competition.
  • Organize resources.
  • Invest in HR.
  • Maintain equipment.
  • Use the simplest, best equipment.
  • Minimize human error.
  • Cut times. Shorten the product path to the customer.
  • Pull the system. Improve the workflow and cut the waste by producing on demand.
  • Employ total quality control.
  • Fix root causes.
  • Manage visibility. Let the market know about your achievements.

Types of Production and Production Systems

You can categorize production and production systems in several ways, including by technical elements, processes, or lead time. Most modern production systems are software-based, meaning that planning, scheduling, and inventory control systems and processes are managed by software.

  • Technical Elements: This includes machines, tools, and organizational behavior, such as people, division of labor, and information flow.
  • Process Production versus Parts Production: Process production means the product undergoes a physical-chemical transformation, such as paper or cement. Parts production means parts are made and assembled into a product.
  • Lead time: Categories include purchase to order, make to order, assemble to order, and make to stock.

The Biggest Operations Management Challenges

Some of the biggest operations management challenges include acquiring and maintaining the right workforce and the right technology. We’ve asked our experts to weigh in on some other common challenges below:

Iris Tsidon

Iris Tsidon:  The CEO of Okapi Vision notes that, “Today's biggest challenges in operations are all related to keeping up with the pace of innovation. Millennials are the largest population entering the workforce. They expect that the companies they work for are going to be as tech savvy as they are, yet existing employees resist change and implementing new technologies. So there is a clash between generations, and operations management needs to balance between the two.”

Daisy Jing

Daisy Jing : CEO and founder of  Banish beauty product line  says the biggest challenges are “making sure that we get the right people and maintain their good performance for years to come.”  

Katharine Leonard

Katharine Leonard:  Lean Six Sigma Black Belt and Co-Founder of  ShiftChange  says, “It's when you don’t have the right resources and the time or leadership support to solve business problems and instead [put] a Band-Aid on problems. Because of this, teams end up overcomplicating their processes and relying on a few experts, who become the single point of failure for your business.” 

Matt Wilhelmi

Matt Wilhelmi:  Associate Business Consultant for  Individual Advantages Business Advisors  advises, “Managing the operations of small and medium-sized businesses comes down to effective communication. There are so many distractions in today’s workplace that we sometimes lose sight of how we communicate. In our experience, effective communication means being consistent and fair. The challenge in effective communication is that sometimes an operations manager needs to encourage and other times needs to discipline/coach. This all happens while maintaining the vision he or she casts for the team.” 

Chris Wiegand

Chris Wiegand:  CEO of the  Jibestream “indoor navigation” platform , comments, The ‘Internet of Things’ — the interconnection of computerized devices via the Internet — has the potential to drive efficiency, but it also brings challenges in complexity and cost. To be efficient, companies need a location infrastructure using addressable maps and technologies, like Bluetooth beacons. An example is a hospital knowing the real-time location of its infusion pumps and other devices to organize their usage. A big challenge is that companies often store data in separate databases, leaving analysts to pull it into spreadsheets to compare. "There’s no single dashboard to bring it into.” 

Richard Lowe.

Richard Lowe, Jr.:  The former Director of Computer Operations for Trader Joe’s and current Owner and Senior Writer of  The Writing King  says, “The technology is changing so quickly, it makes it hard on an operations manager to keep up...The whole model of the way things are working is changing." Using the example of trucking for product distribution, concepts such as robotic trucks and location-aware tracking bring challenges along with advancement. "It’s a lot more data to manage." Technology training presents challenges too. "How do you keep people up to speed with new technologies?”

David Shelton:  COO of healthcare service company  PatientMatters  lists these challenges: “Staffing: I'm convinced your staffing determines your success. A mixture of new employees combined with seasoned experts allows your operation to maintain stability while training staff, expanding sales opportunities, and identifying new solutions to existing problems. Technology: Whether a service provider or manufacturer, new technology and your ability to understand and react to internal data will dictate your operational success. Growth: Do you have the materials, vendor relationships, and labor to keep pace with your sales team and market demands?" 

Tips for Good Operations Management

Operations management is concerned with the quality of a company’s technology and people. Our experts provide their best tips for how to maintain quality resources to ensure efficient and effective operations management:

  • Keep Current on Innovation Trends: “Take the time to listen to suggestions of tech-savvy employees; only use technology that is simple to use and engaging for employees at every skill level,” suggests Tsidon. “Invest in educating managers and employees on the goals of implementing new systems, and make sure to build in rewards so that everyone is motivated to learn and use new technology.” 
  • Encourage Effective Communication: “Make sure that you communicate processes, rules, and policies to everyone. Have a smart marketing plan and be up to date. Pattern your marketing plan after whatever is on trend. Do it as soon as possible, and use that concrete plan with a timeline until a new trend arrives. Have weekly reports of everything about the company. Then, from there, manage everything based on the needs of each category,” says Jing.
  • Collect Data Electronically: “Having team members write down their processing numbers for data collection can lead to inaccurate data and [will] not give you the results you need to run your operations efficiently,” explains Leonard. “Use report dashboards and rely on data and analytics. Determine what information you need to run your business, measure it, and use analysis to augment your process and continually improve your operations. Be customer-focused: Design your processes with the end customer in mind. Think about what they see as value and what they’re willing to pay for, as well as how quickly they expect to get results.”
  • Listen to Your Teams: “Field-level employees, internal sales, and vendors have invaluable information and know what is going on with your product or services and the competition,” notes Shelton. “Measure and analyze. We are constantly examining our internal processing times and employee performance and measuring success rates. Measuring your internal performance allows you to exceed customer demand. Expand your network. Managers from competitive firms change jobs. A friendly relationship can become a key alliance. Vendor partnerships in developing new products or services allow you to grow your operations while controlling costs. Joint ventures that benefit both parties can substantially increase your knowledge base while increasing your speed to market.” 
  • Slow Down: “It’s important to consider the side effects of each decision and how you relay communication to the team,” advises Wilhelmi. “People tend to like working for (and have higher engagement with) leaders who maintain a level head and aren’t too quick to pass judgment. Be proactive and strategic. It’s important that leaders aren’t reacting all day. The constant reactionary environment can turn great leaders into fire chasers, which tends to devolve their communication. Stay focused on the numbers. If something isn’t working as it should, it’s better to focus on the measurable data than on the emotion of disappointment or the result. When you can tweak a process and measure it along the way, you remove the subjectivity and remain objective.”
  • Assign an Internal Owner: Make sure every project has an internal owner, or it can go off track,” says Wiegand. “Understand the key performance indicators that will drive the business. Just because you can measure it doesn’t mean it matters. Protect the data. Operations managers have to safeguard the info. Consider leveraging infrastructure as a service, with hosting, security, and redundancy built-in.”
  • Keep Up With Your Field:  “Read a lot. Learn a lot. If you’re a logistics manager, connect with your tech people,” suggests Lowe, Jr.

Current Trends in Operations Management

The field of operations management has evolved over time to keep pace with technology and human behavior. From Lean manufacturing to sustainability, we’ve outlined some current and existing trends for operations managers:

  • Business Process Reengineering (BPR): BPR helps companies revamp their organizations from the ground up by reorganizing and reassigning processes to better align with company goals.
  • Lean Manufacturing: Lean, Six Sigma, and Agile are disciplines focused on efficient, adaptable production. They continue to be mainstay approaches.
  • Reconfigurable Manufacturing Systems: These systems are designed to be flexible  and adaptable to sudden market changes.
  • Behavioral Operations Management: This approach focuses on human behavior as it relates to operations management.
  • Sustainability: This approach highlights maintaining ecologically-minded practices under changing laws.

Expert Opinions on Operations Management Trends

Most experts agree that computers and tech are at the center of operations management. We’ve gathered expert observations of current operations management trends, from data visualization and forecasting to further trends, below: 

  • Data Visualization: “The key trend that I see is companies combining data visualization with key performance indicators to create real-time monitoring and management systems,” says Tsidon.
  • Automation: “I see firms moving toward technology to solve the mundane, time- consuming, and error-prone tasks that inhibit operations teams from providing the best service to customers,” Leonard notes.
  • Trend Forecasting: “How can you incorporate internal and external data to make decisions that are ahead of the curve?” asks Shelton. “The best sports analogy I know is ‘Skate where the puck is going.’ We've got to be planning ahead in order to anticipate customer needs and beat our competitors; managing resources and minimizing waste. Both product and service organizations wrestle with maximizing resources (materials or staff) to produce the best product for the consumer.”
  • Collaboration: “I see operations management becoming more closely aligned with human resources as companies are increasingly aware of how important their culture and human capital are as they relate to operations and engagement,” observes Wilhelmi.
  • Location Technology: “With hyper-accurate location services, one trend is using that technology for real-time alerts, such as for a dementia patient wandering off,” says Wiegand.
  • Use of the Internet: “Internet shopping continues to be a big trend, involving pretty much any product, including food. Amazon sends some products within a few hours of being ordered. You better be able to match that. You have to be able to meet tighter inventories, such as just-in-time (JIT) stocking, with some food staples, such as bread and eggs, arriving two or three times per day,” notes Lowe, Jr.

What Is the Future for Operations Management?

The future of operations management can be inferred from its past. While no one can know for sure, our experts anticipate a future of ever-increasing data and technology, including self-drive vehicles and the automation of low-skilled jobs. 

  • Automation: “With increasing automation will come sweeping organizational change,” Tsidon says. “Operations are going to reduce hierarchy and make management easier, so, while many are concerned about the loss of low-level jobs, I see that there will be a sweeping change at every level, including upper management. Previous positions that needed highly skilled workers will no longer exist because artificial intelligence will provide better results without human error. In the future, the most valuable management skills will be the ability to combine data analysis with emotional intelligence. This is something that no algorithm can replace and that will be more crucial than ever.”
  • Remote Management: “The future will bring remotely-handled operations management. Nowadays, there's nothing a remote worker cannot do. It is possible, and it will be the next trend,” predicts Jing.
  • May Require a Technical Background: “I envision operations management becoming a high-tech position, requiring a highly analytical skill set and product-focused mindset,” says Leonard. “With Amazon delivering packages on the same day, customers are coming to expect instantaneous results, and, to maintain competitiveness, operations needs to drive toward that type of success.” 
  • Larger Focus on Quality Labor: “There are opportunities presented by technology to build or service faster, better, and cheaper. It’s critical to utilize technology, interpret data, source new materials, and identify talented labor. You must confront labor challenges and build a better workforce. How do you better utilize your labor force? Improved recruiting techniques allow you to draw in new labor, but how can you also better train existing staff to advance within the organization? This is a key area we are focusing on. We strongly believe we have an obligation to train our existing team to grow and advance internally,” explains Shelton.
  • Human Resources: “The future of operations management is sliding toward creating data (so it can be measured and studied from an objective position) around the culture of a company’s human operations. Dozens of reports have come out in the past few years that are confirming that lack of engagement by employees leads to a substantial loss of productivity — or worse, high turnover. In the truest sense, it’s the operations manager’s responsibility to maximize their operations. The better your culture, the better your operations,” observes Wilhelmi.
  • Location Based Services: “The future will include location-aware devices and smart buildings that will maintain themselves,” predicts Wiegand. “For example, an elevator could know that it needs service work through data inputs and could initiate the repair as part of a structured workflow. There will be greater use of artificial intelligence to recognize a problem and start a workflow. There will also be greater use of predictive analytics. Moreover, you’ll see greater protection of proprietary data, especially if problems result from data being too available. Finally, you’ll find greater gender equality in operations management. We certainly have great female leaders in operations today. That diversity brings a lot of value.”

Other Resources for Operations Management

  • American Production and Inventory Control Society (APICS)
  • Journal of Operations Management
  • Professor Gad Allon's online course , Northwestern University
  • Wharton online course
  • University of Illinois online course
  • Introducing Operations Management

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What Is Operations Management? Benefits, Functions, and Types

Last Updated on February 24, 2024 by Owen McGab Enaohwo

Operations Management

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Harvard Business School Professor Marco Lansiti defines operations management as the power to act.

He heads the university’s Technology and Operations Management Unit and says the operations department creates, captures, and shares value for customers, shareholders, and the entire business ecosystem. He adds that software and data transform the systems that define and deliver that value to various economic agents.

If you are putting in 55 to 90 hours a week yet not enjoying your operating environment, this is your catch-up guide. It will introduce your operations department to tools like SweetProcess that will keep you afloat in this decade’s unpredictable, disruptive, and volatile business environment.

Click here to claim your 14-day free trial of SweetProcess and see how it enhances your operations management. No credit card is required.

Table of Contents – Operations Management Full Guide

What Is Operations Management?

Key Functions of Operations Management in an Organization

Essential skills you need to succeed as an operations manager, how sweetprocess can make your job easier as an operations manager, types of operations management, major performance objectives of operations management.

Frameworks for Analyzing Operations Management

Challenges of Operations Management (And How to Overcome Them)

Factors Influencing the Performance of Operations Management

Manage Your Business Operations Effectively Using SweetProcess

What is operations management.

Operations management (OM) delivers the power to act by linking process and value. Operations managers, therefore, plan, organize, and supervise manufacturing and production. However, their decisions are only efficient when they utilize the least resources to create shareholder value and satisfy customer demands.

Magdi Batato , Nestlé’s head of operations, defines the operations management office tasks as strategic or tactical decision-making. OM department heads make big-picture, long-term impact strategic decisions like the reallocation of capital or the entrance into a new market. Their management expertise is also of immense value in logical points like distribution, logistics, manufacturing, and sourcing where the rubber meets the road.

Why Is Operations Management Important?

Enhances team collaboration.

Operations Management 2

An excellent case study on the benefits of a modern operations management model is Nestlé. Nestlé has over 350 factories in diverse locations all over the globe. Its workforce has crossed the 275,000 range.

So, how do the operations management offices in the world’s largest food and beverage company marshal their forces and give all its team members the power to act? In 60 of its factories, all operators have iPads. These tools ensure staff leverages software platforms to create team-based, flexible, and comprehensive operations manuals .

For instance, business process management (BPM) tools improve collaboration by enhancing process visibility. Nestlé operators use their iPads as car dashboards, giving them a sense of ownership of the factory floor and its processes. Here, they can track progress, check task status, and spot any growing bottlenecks instantly.

Helps Achieve Business Objectives

Nestlé’s products have found a cozy spot in just about any household. Their modern approach to operations management supports fast decision-making. It streamlines processes and saves revenue by lowering inefficiencies. Operations management also focuses on quality control and enhancing customer satisfaction.

Boosts Employee Productivity

Concern over employee productivity is a significant challenge that keeps many operations managers up at night. How can you keep your teams working better and faster without exerting undue performance pressure on their heads?

The best business process platforms can keep your employees engaged and in learning mode after their training sessions. They can easily log in to mobile gadgets, read, and then apply their tribal knowledge to the everyday business process.

Information will lower work errors and enhance the speed of task accomplishment. Over and above that, these operations management tools will provide clear task assignments and outline steps to workflow efficiency.

Lastly, they support a conducive work environment by fostering an operator-centric organization. For instance, at Nestlé, devices provide skill building that instills a culture of honesty and transparency into every operator and factory manager through continual learning and upskilling initiatives.

Improves Customer Satisfaction

You would be forgiven for thinking customer satisfaction is the marketing and sales department’s task. However, the largest key performance index with the most significant impact on customer satisfaction is first call resolution (FCR).

First call resolution is a metric that tracks your ability to resolve your customers’ challenges after first contact. Higher FCR rates are a product of equipping your customer-facing task force with adequate data at the right time. Automation and real-time guidance processes and data will enhance your customer experience at a rate of 1% for every 1% improvement you make in your FCR processes.

If your operations manual templates fail to enhance FCR, customer satisfaction will drop by 15% each time a client or buyer calls for updates about an old issue. To this end, knowledge base features in SweetProcess’s standard operating procedure tool can share your team’s collective knowledge on problem resolution.

According to Atlassian, knowledge-based support teams have 15% better first-call resolution rates. In addition to that, an operations management team can ensure timely and consistent delivery of products, fostering loyalty amongst users.

Reduces Costs

Most businesses, especially SMEs, have finite resources and must put their budgetary, technological, material, and financial allocations to their best use. Operations management teams can lower operational costs by embracing technology.

Digital technology, for instance, can lower travel allowances and expand remote workforces, downsizing costs of office space and travel. These platforms can pinpoint hazardous tasks and processes and lower health and safety costs.

The operations management teams can also optimize processes by eliminating activities that do not add value. Lastly, an operations team should leverage systems that provide insight into services or products that provide the best returns.

Ensures Product Quality

Operations management enhances product quality by monitoring and enhancing production. On top of that, they implement a high quality control system that adheres to regulations and meets customer expectations and product reputation.

They will, for instance, note any defects and ensure they are rectified. Then they will create standard operating procedures for all production processes and ensure all production teams have access. They will also monitor these processes, identifying deviations and upskilling employee knowledge through training and feedback loops.

Increases Revenue

Over and above that, businesses with the power to act are agile and adaptable. The core principle of shared data workflows is that they should scale instantly as per demand. They should also split across the organization without imposing more hardware performance challenges and costs.

As a result, your business will enjoy higher productivity and timely delivery of products or services. Better customer satisfaction will ultimately drive higher sales and revenue for the business. For instance, Nestlé’s operations digitization has brought about a consistent operating profit margin of 17% and an earnings-to-share margin of 6% to 10%.

1)     Strategic Alignment

Operations Management 3

Say your company plans to increase its market share by increasing its product lines. How does the operations management team align this objective to the organization’s core goals? The team may first increase production capacity to support higher production.

Alternatively, they may focus on streamlining their supply chain processes to ensure a consistent production capacity.

To roll out these objectives, the operations management will first translate these goals into actionable plans.

It will define all key performance indicators (KPI), allocate resources, and optimize them for effective deployment. Data can give you the upper hand, ensuring you can counter threats and actualize opportunities in real-time.

Technology can disperse decision-making to various points where the people close to the action are in your organization. Other strategic alignment roles include quality management , cost efficiency and control, risk management, and performance measurement.

2) Product Design and Delivery

Before 2019, Nestlé India had a single operating model regarding product quality for the entire country. However, its operations management team launched a new model focusing on product quality and satisfaction.

For instance, it broke down its customers into 15 diverse clusters to address regional consumer disconnect. By defining customers through measurable metrics like customer first rather than location first, they began to appeal to consumption occasion, frequency, and equity for various products. As a result, their profits grew by 33.5% in FY20 .

Operations management plays a crucial role in product design. It provides manufacturing design, supply chain, and cost insights crucial in product design. After that, the operations team brings the marketing, design, production, and engineering teams together for collaboration.

They also work with the materials team, ramping up resource use measures and roping in the supply chain team for the timely delivery of raw materials. They oversee quality assurance and logistics teams for optimum warehousing, transportation, and distribution networks of goods and services.

3) Process Optimization

Process optimization is your first step toward enhancing and eliminating bottlenecks from your everyday processes. It is a crucial function in the age of fierce competition and endless disruption where efficient use of storage spaces can overcome seemingly insurmountable challenges like space shortages.

Operations managers can, for instance, amend space shortages by analyzing the flaws within the storage process. They will systematically analyze and use flowcharting, process mining, mapping, and simulation to examine and deconstruct the storage process.

Using process optimization, the operations team could, for instance, pinpoint poor warehouse setup as the cause of the storage problem. If your products are fast-moving, they can use pallet racking to build up rather than out. By expanding your space vertically rather than horizontally and using high-reach trucks, you will enjoy more use of your 40-foot-high ceilings.

Reach trucks and other specialized forklifts will quickly access the highest-selling inventory and help streamline your dock-to-stock pipeline. Over and above that, an efficient warehouse management system (WMS) will optimize your processes further and increase agility, compliance, efficiency, and customer satisfaction.

4) Daily Target Achievement

Operations management plays a crucial role in supporting the achievement of daily targets in an organization. The operations team meets this epic challenge by ensuring efficient and effective use of resources. They also optimize processes and focus on key performance indicators (KPIs).

However, the modern operations team does not wait until midyear to analyze progress toward targets. An operations team needs to set daily targets. Day-to-day, one-on-one meetings with the operators regarding training and process efficiencies will enhance target achievement.

Operations managers leverage technology to automate processes and improve efficiency. Manufacturing execution systems (MES) and enterprise resource planning (ERP), for instance, help in real-time tracking and management of daily operations.

Efficient communication through business process management tools like SweetProcess ensures that teams understand their roles and responsibilities.

These tools ensure that operations managers promptly address operational issues to prevent disruptions.

5) Purchasing and Supply Chain Management

Did you know that 69% of businesses do not have the big picture on their supply chain processes? Only 6% of businesses do, yet supply chains are the lifeblood of any organization. They are a crucial cog in the gears of your business and can double your profits and give you a competitive edge in the market.

As per Zippia data , 57% of companies say that efficient supply chain management has given them an edge in commerce. Then, 70% say that good supply chains are a vital KPI for high customer service ratings.

Operations management plans are vital in aligning, optimizing, and integrating an organization’s purchasing and supply chain activities. Coordinating between these functions is essential for ensuring a smooth flow of materials, timely deliveries, and cost-effective operations.

The operations management team analyzes performance metrics and highlights any areas of the supply chain that require further visibility. Their major task is aligning the organization’s strategic goals with the procurement and supply chain teams. They also build robust relationships with the purchasing and cost control teams to ensure fast delivery of items and cost-effective supply chain practices.

6) Project Planning and Control

Projects are brief processes that create value for a business by developing unique services or products. Therefore, the operations and project teams create value for the business by introducing or improving existing products. Since operations management views all business processes via the lens of efficiency, they are vital in project planning and control.

They provide the frameworks, processes, and oversight to ensure that projects are executed efficiently and meet their objectives. Some vital project planning and control tasks for the OM team include resource allocation and capacity planning.

Operations managers also work with project managers to develop realistic timelines for project activities. They contribute to risk assessment and management strategies to ensure project success.

7) Scheduling and Task Management

Operations Management 4

Operations management is critical in supporting an organization’s scheduling and task management. Firstly, scheduling is a process that deconstructs a project into its activities, milestones, and deliverables. The scheduling team then determines a project’s duration and start and end date.

In addition, the operations team factors a project’s resources into its scheduling processes. The operations team can leverage the master project, milestone, or detailed schedule to identify and track a project’s activity.

They will use project scheduling software to generate easy-to-use Gantt charts that display a variety of views and details of a schedule. Other useful project management tools include the critical path method (CPM) that tracks each project’s most essential tasks sequentially.

On the other hand, the program evaluation and review technique (PERT) leverages mapping tools to map all of a project’s activities. Like a Gantt chart, it is more suited to initializing your project’s task management and scheduling needs. The Gannt chart, on the other hand, is handy when reviewing a project’s milestones during its lifetime.

Some benefits of scheduling include tracking progress and enhancing team collaboration. Then operations management uses task scheduling platforms to highlight concerns, monitor progress, and identify and designate task relationships.

8) Material and Equipment Management

Do you know materials and equipment account for at least 60% of your business costs ? For this reason, operations management must use the best standard operating procedures to manage this valuable resource. Materials management is vital to the effortless flow of products to the customer level. Material and equipment management also balances out any conflicts in material availability.

It also lowers inventory costs and enhances customer satisfaction. Material and equipment management operations include inventory, purchasing, warehouse, and transportation management. Material requirements planning (MRP) is a digital technology management objective that uses lead times to plan the production and procurement of materials.

9) Capacity Management

Operations management gives organizations the power to act and maximize their activities by ensuring they have the right resources, including workforce, equipment, technology, and facilities, to meet current and future demand efficiently.

Operations may undertake a capacity management study of your IT needs to ensure that each department has adequate capacity to meet the year’s projected workloads.

Capacity management also balances an organization’s production capabilities with the level of demand for its products or services. It optimizes the use of resources to achieve the highest possible output while maintaining quality standards and efficiency. The main forms of capacity planning include product, workforce, and tool capacity planning.

10) Productivity Management

As the business world adjusts to the post-pandemic environment, productivity has become one of the most significant hurdles every organization faces. For instance, as per Microsoft data , Teams meetings have escalated by a massive 192% in the hybrid work model. Heavy meeting software users spend at least eight hours each week, or an entire workday period, in online meetings.

The multinational technology corporation states that the rising onslaught of meetings has become the leading distraction in the workplace. Distractions hurt productivity and lower employee morale. Business, therefore, needs productivity management to ensure that its labor, capital, and outputs are put to productive use.

Operations management can achieve this feat by enhancing communication and giving team ownership and accountability over work. They should identify a team’s weaknesses and strengths and use project management tools to boost productivity.

Reward and constructive feedback systems also improve productivity and keep employees motivated. The benefits of productivity management include lower overhead costs, better time to market, and more profits for all stakeholders.

Operations Management 5

Operations managers analyze and interpret data to ensure that their organizations have the power to act. For instance, operations managers track cash flows, sales transactions, customer accounts, shipments, and supply chain tasks via the best business platforms. Consequently, an operations manager should develop knowledge of business data computing platforms to track all business functions.

Risk Analysis

As per Big 4 audit firms , some of the modern business’s existential risks include data security, IT governance, and cybersecurity. There are also escalating risks in talent management, diversity, and human capital management.

Moreover, ESG (environmental, social, and governance) reports will soon become compulsory in all business spheres. Any unprepared business will face regulatory risks. An operations manager should perform mitigation and risk analysis to highlight potential risks and generate solutions should these challenges arise.

The modern operations management model should also ensure that businesses respond to unforeseeable risks by keeping in close contact with the people closest to the threat radius through technology.

Strategic Planning

Strategic planning develops long-term direction and broad goals that align an organization with its objectives. Consequently, an operations manager must integrate departments like finance, human resources, accounting, and marketing into strategy management.

Data analysis is core to strategic management. Therefore, an operations manager must perform an economic and industry data analysis to provide positive insights in the planning phase. Then they will host quarterly or monthly strategic management planning meetings with all stakeholders to discuss a strategy’s functional and financial vision with all stakeholders.

Decision-Making

The operations management office has five major decision-making spheres. They include policymaking in the physical production process. They also make short-, medium-, and long-term decisions on their organization’s output capacity. Operations management also makes logistical decisions on inventory and the workforce. Lastly, they oversee the control and planning of quality.

Budget Management

Businesses have a variety of budgets that include operating, master, static, cash, financial, production, and labor budgets. The operating budget identifies a business’s projected expenses and revenues. It ensures that the organization sticks within its overall operating budget.

For this reason, an operations team has to prepare their operating budget at the start of the fiscal year. However, in the turbulent business environment of the day, they also have to leverage technology to disperse real-time budgetary decision-making points to all corners of the business. This advantage will ensure that you respond to all disruptions in the business environment.

Skills you need to make company budgets include understanding financial concepts and analytical skills—strong mathematical skills to perform budgeting-related calculations such as percentages, ratios, and forecasting. Then you need budgeting and accounting software to streamline the budgeting process. You also should adhere to ethical standards when handling financial information and making budgetary decisions.

Problem-Solving

Business problem-solving is both a process and an inner ability. Operators with robust problem-solving abilities are more productive and creative in the workplace. However, since problem-solving involves a series of processes, any manager can increase job fulfillment and satisfy their clients through analysis, communication, adaptability, and teamwork. They can write standard operating procedures that identify problems and explore potential solutions by defining goals and objectives.

Communication

Effective communication helps operation managers to manage relationships with all stakeholders in a business. For instance, suppose team members fail to fulfill a task outlined in a process. You would send them a short email about the missed step and why they must repeat it. While at it, you could mention that these repetitions exert undue pressure on company resources.

This communication process has failed the test of effective communication by, for instance, not using positive language, communicating aggression rather than assertiveness, and failing to ask questions. For instance, open questions in an email may help staff speak freely and elaborate on challenges that hinder them from effectively fulfilling a process.

Effective communication in business involves clear and concise expression of ideas, active listening, empathy, and adaptability. It requires transparency, organization, and an appropriate choice of tone. Nonverbal cues, cultural sensitivity, and the use of technology play crucial roles.

Some operational managers have a natural affinity for leadership. That said, there is a growing realization that leaders are made through mentorship and educational experiences. Ultimately, a combination of interpersonal skills, strategic thinking, and a commitment to personal and team growth contributes to effective leadership in the managerial role.

Organization

Operations managers should hone their organizational skills to prioritize tasks efficiently. Top-notch organizational skills will help you create and maintain clear systems and set realistic goals. In addition to that, you should learn to leverage tools and technologies to streamline workflows and ensure effective time management.

Then, developing information, documents, and schedules for organizational systems is vital. Continuously assess and refine processes for greater efficiency, and lead by example in maintaining a well-organized work environment.

Product Development

Product development oversees the product lifecycle while bringing new products to the market. An operations manager requires attention to detail, communication, and problem-solving skills. These skills will ensure you can control product development and quality costs and stick to timelines.

You will use your product development skills to create appealing, functional products that resonate with the needs of your clientele. You will achieve positive outcomes by conducting prototype testing and continuous learning. You will refine and enhance your product development skills by staying abreast of industry trends.

Operations Management 6

How to Map Out and Document Your Company’s Procedures and Processes using SweetProcess

Let us imagine that you are facing persistent quality control challenges. After intensive research, you find out that you need a process that controls the delivery of fresh raw materials. You must ensure that the products you receive from your suppliers are contamination and damage-free. You can build a quality control process on SweetProcess in an instant.

  • Log in to your SweetProcess account (you can do this straight from your 14-day free trial )
  • Use the Add Teams feature to select the teams you will share your process with. Click on the “Add Teams” button on the bottom right.
  • Next, use the Procedures and Policies tab to look up or create processes that tackle your quality assurance challenge.

Operations Management 8

  • We chose the Quality Control Checks process from the list of possible procedures and policies and added it to our account.

Operations Management 9

  • The SweetProcess AI wrote our process in minutes.

Alternatively, you can create your process manually using SweetProcess’s easy-to-use interface.

  • Log in to your SweetProcess account and click the “More” tab.

Operations Management 10

  • Select “Processes,” and click the “Create Process” button at the top right.
  • Type in your process title. In this case, we choose “Quality Assurance Process for Raw Material Integrity” as our header.

Operations Management 11

  • Break down your task into simple, digestible steps.
  • Click on the “Create Process” button.

Operations Management 12

  • After that, use the “Add step” button to add a sequence of steps to your process.
  • SweetProcess will quickly generate a visual process map.

You can add decisions to your procedures. Decisions use conditional logic or “yes-no” branching to generate guidance options based on the reader’s choice. Click the “Add a Step” button and select the “Add a Decision” tab.

  • Click “Finished Editing” and approve your process.

How to Collaborate With Team Members in Real-Time Using SweetProcess

When Katie became Preferred Home Services ’ customer experience director, she found SweetProcess was being used for process documentation. Soon, Katie learned that her team members had not explored SweetProcess’s full potential.

She not only deployed SweetProcess to every corner of her organization but explored its effective task assignments and collaboration features. Today, her team members have all their questions about unfamiliar tasks answered in real time.

Like Katie’s team, you can use the “More” tab in the navigation bar to select teams you want to collaborate with:

Operations Management 13

Create your new team and assign its roles. Add members to your new role and assign them teammate or super manager status.

Operations Management 14

Now they can make comments and will be notified via email to respond to comments from other team members. They can either log in and comment using the SweetProcess interface or reply to the comment via email.

How to Track and Monitor the Progress of the Tasks Assigned to Team Members in SweetProcess

The team at Benchmark Wealth Management had brilliant talent on board, but their operations management team needed to deal with the standardization of standards across their team members.

Sarah Beach, their branch operations manager, first did away with storing tribal knowledge in notebooks. Instead, they digitized their processes using SweetProcess and streamlined their documenting processes. Then she worked on enhancing collaboration among team members. Now, while Sarah has fewer knocks at her office door, her teams sit in one digital room and address each other’s pain points on SweetProcess.

Our process documentation software has sweet tracking features, ensuring all team members complete their tasks. You can create one-off or repetitive tasks that you can assign collectively to all teams or individually using the super manager status.

Operations Management 15

To assign a task to your team, use the three-dots menu on the top right of your process. Alternatively, use the “Actions” menu and click “Share.”

Operations Management 16

Try out SweetProcess’s process documentation, task management, and collaboration features via their demo page or a 14-day free trial period .

Objectives Management

Objectives management, or strategic control, is a top-level operational management function that monitors company strategy as it undergoes implementation. Objectives management also evaluates any deviations from the strategy and reins them through adjustments.

So, say your organization’s flagship product is on the verge of becoming obsolete. How do you leverage objectives management to reassess your strategy and make a quick save on your bottom line? Top management steps in and reviews the business environment and the demise of the product on the firm’s survival.

Then they formulate adequate goals and new strategies by monitoring external and internal forces through the operational management office’s power to act or data.

Any major errors at the objectives management level are often fatal to business objectives. For instance, when BlackBerry’s objectives management team chose to position their flagship product in the cell phone market, they lost their envious position to the iPhone.

Task Management

Task management, or operational control, oversees intermediate processes, keeping them in tune with pre-established objectives. Task managers use internal data pipelines, enforcing corrective actions at various production levels.

Some task management objectives include a choice of logistics equipment or stock management. Any oversight at this level will translate to delays, low morale amongst workers, and falling sales revenue.

Individual Supervision

Individual supervision ensures that the organization meets its overall strategy. Ground-level supervisors oversee the individual efforts of all team members, interacting with them and passing on instructions from the task management team. Real-time data and a robust operational management team can mitigate risks that lead to the loss of short-term opportunities in a competitive business ecosystem.

Operations Management 17

Did you know that staff and customers base their expectations of your business on the quality of your products or services? Quality is a consistent indicator of your organization’s integrity, performance, and customer satisfaction. It is, therefore, a crucial operations management principle that lowers costs and increases customer satisfaction.

Speed goes in hand with quality. Faster turnarounds that do not compromise on quality save costs. It is also an integral component of your buyer’s decision-making process . You will enjoy more revenue if you deliver your service or product right when they are ready to purchase. On top of that, your business will rely less on inventories and lower forecasting errors.

Dependability

Do you make your promises and keep them? As we stated, your customer experience rates rise at 1% for every 1% improvement you make in your first call resolution processes. Your customers expect you to anticipate their needs at every turn.

For instance, if your purchase order cycle time is nine days, lowering that cycle time can improve your overall process turnaround and enhance customer satisfaction rates. For this reason, Amazon has invested heavily in logistics, placing 185 fulfillment centers in various places globally. At least 110 of these centers are in the US to ensure that its Prime premium delivery service, which comprises 71% of its clientele , enjoys an exceptional two-day delivery lead time at zero fees.

Low business cost is every operations management’s objective since low prices attract more sales. So, operations teams must strive to lower the indirect and direct business costs to provide lower price tags for the market. In addition, cost minimization liberates resources that can meet other business objectives.

Flexibility

According to Magdi Batato, Nestlé’s head of operations, operational management teams need to adopt the principle of subsidiarity. In political and social circles, subsidiarity implies that central authorities allow local operatives closest to the input and output centers to make decisions. By doing so, a business will achieve flexibility that enables rapid response to threats or opportunities in the market.

Frameworks for Analyzing Operations Management 

Value chain.

Value chain analysis is a systematic framework that identifies your customer’s most significant source of value in your products or services. It is a process that examines the entire sequence of activities involved in creating and delivering a product or service. Then it highlights opportunities for efficiency and cost-effectiveness across the value chain for overall business performance.

System Thinking

Systems thinking is a process management framework that analyzes a process’s dynamics, conditions, and restraints. Defining a system as an interdependent and interrelated set of parts, only separated by boundaries, seeks behavior patterns in the sum of a system’s parts. Its analysis features will provide knowledge improvements that you can run as experiments and discover any unknown side effects to the larger whole.

Business Process Reengineering

Operations Management 18

Business process reengineering (BPR) is the modern analysis and radical redesign of existing processes. Business process redesign improves efficiency by leveraging technology and cross-functional collaboration between teams. It restructures key aspects of the production flow, such as process optimization and technology integration. Furthermore, through an analysis of performance metrics and change management, it provides continuous improvement in organizational workflows.

Critical Path Analysis

A critical path is the most time-consuming project sequence that operators must wind down before the entire project receives the completed designation. In critical path analysis, the operations team highlights a project’s most crucial tasks and notes its dependencies. Afterward, they perform task duration calculations and then plan a project by building the project schedule around the critical path.

Lean Manufacturing

Lean manufacturing focuses on minimizing waste, optimizing processes, and maximizing efficiency. Operations management is a systematic method that analyzes operations to eliminate non-value-added activities. Over and above that, it reduces inventory and enhances overall productivity.

Six Sigma analyzes processes to identify and eliminate defects or variations. Operations managers leverage statistical methods to improve quality, reduce errors, and enhance efficiency in Six Sigma step sequences. Its ratios, trending charts, and calculations ensure consistent and high-performance operations, lowering the cost of business and increasing profits.

As per the American Bureau of Labor Statistics, work-related fatalities rose by 5.7%, from 5,190 to 5,486 in 2022. Referring to it as the toll of neglect, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) say that every day, on average, 343 workers lose their lives to hazards in the workplace.

Maintaining a safety culture is one of the operations manager’s most crucial challenges. Besides complying with Occupational Health and Safety Administration (OSHA) standards, operators can lower workplace incidents by ensuring that productivity never trumps safety.

You should have a safety process documentation strategy and communicate it to team members interactively, assertively, and frequently. The technology could seamlessly fuse safety and production and establish workplace safety accountability among all ranks.

Global Operations

Trade barriers between economies are crashing as more national economies join the global trade network. To this end, operation managers now face more complexity and challenges related to cultural differences and diverse regulatory environments.

Logistical intricacies have also come to the fore, and operation managers must navigate these factors to ensure efficient supply chains. In addition, the command-and-control model of operations management unraveled under the pressure of the pandemic, forcing the loosening of strict decision-making.

Today, the operations team has to collaborate with all production points on the go to survive the turbulent business environment. Technology can enhance effective communication and successful coordination of activities across international borders. It also positively impacts fast decision-making, risk management , and organizational performance.

Quality Control

Some challenges that limit quality assurance in many businesses include low commitment from management. Proper commitment and support through determining process costs, details, and justification can enhance the quality of products and business systems. Quality assurance is an objective that all team members must adhere to through reporting, audits, and continuous improvement.

Process Improvement

Consistent quality operations are the lifeblood of business excellence. Where businesses have failed to achieve an excellent operational atmosphere, operations management should address the root cause of the failure by undertaking process improvement.

A structured process improvement method regularly analyzes and optimizes workflows. It identifies bottlenecks, implements efficient technologies, and fosters a culture of innovation and continuous improvement. Over and above that, it seeks stakeholder feedback. This iterative approach helps streamline operations, reduce costs, and enhance efficiency.

Labor Shortage

There is a mushrooming talent shortage challenge, as four in five employers report difficulty hiring talent. Some factors driving up labor shortage include rapid technological advancements leading to a growing demand for tech-savvy talent.

Also, changes in the nature of work have created new jobs with skill requirements that are not easy to find in the current talent pool. Other factors that cause labor shortages include the rapid growth of the business sector.

There is also a disconnect between workplace skills and educational institutions.

Operations management can address talent scarcity by reimagining their hiring process and upskilling their current talent pool. They also should embrace inclusion and diversity and collaborate with educators to develop curricula that will supply specific talent.

Time Management

Operations Management 19

Poor time management leads to long lead times and logistical delays. Data shows that 70% of businesses suffer the extension of their product or delivery lead times due to raw material delays. However, an operations team with the power to act can be part of the 30% that delivers on time.

By quickly analyzing their buffer stocks, they can surmount wildly unpredictable challenges like warehouse errors, equipment downtime, or untrustworthy vendors. Additionally, they can quickly vet reliable vendors while safeguarding the business with decentralized delay agreements, processes, procedures, and policies.

In logistics, the operations management team can enhance time management through upskilling workers, inventory tracking, and full automation of tracking and handling processes. Since a week or two lead times are no longer satisfactory, operations management teams can enhance time management by prioritizing tasks.

They should automate and digitize the supply chain process to enhance process visibility and lower errors. Implementing efficient scheduling systems and fostering clear communication will minimize time wastage and enhance overall productivity.

Advanced Technology Adoption and Integration

Operations managers are like truffle hunters. They constantly look out for the best IT systems and products. However, challenges like initial costs, resistance to change from employees, and potential disruptions during the implementation phase often break the momentum of change. The need for specialized training and ensuring compatibility with existing systems are also significant challenges facing advanced technology adoption processes.

Balancing these factors is crucial for successful integration and realizing the full benefits of technological advancements. The operations team can overcome these challenges through research. You should adopt technology with an easy learning curve to prevent disruption when incorporating new tech.

Over and above that, involve your team members in vetting new systems and factor in employee training in your invoices. Last, anticipate new security vulnerabilities and cultivate a culture of responsiveness. Embrace regulations and lobby for suitable change in your business sphere.

Sustainability

The most significant sustainability challenges are a lack of transparency in the supply chain and changing consumer preferences. The regulatory environment is leading to more scrutiny of business operations, and upfront costs of doing business are rising.

Operations managers can address sustainability by implementing eco-friendly practices, reducing waste, and complying with environmental regulations. It would be best to integrate sustainable strategies into the business model for long-term organizational resilience.

Factors Influencing the Performance of Operations Management 

Type of organization (service or product-based).

Every organization has its unique strategies, processes, and priorities. Therefore, the soul of your organization—including its size, industry, market orientation, technology adoption, and global presence—directly impacts operations management. These features dictate its structure, management, and optimization.

Low- and large-volume operation management demands vary to a large degree. Higher production volumes often require streamlined processes, automation, and efficient supply chain management.

Organizations dealing with large volumes must focus on scalability, cost-effectiveness, and logistics to meet demand efficiently. Conversely, lower volumes may prioritize flexibility, customization, and responsiveness to market changes.

Variation (In Demand)

Demand variability can lead to sudden delays or stockouts, as it did in 2020. Consequently, operations must be adaptable to handle fluctuations. Operations management should undertake resource utilization during peak demand and lower inefficiencies during lulls.

Variety and volume are twin factors. Variety offers buyers more flexibility of purchase but can hinder volume generation.

A wide variety of products or services may require flexible production systems and diverse skill sets. So, the operations team must balance customization with efficiency to meet customer demands for varied offerings.

Customer Contact

High customer contact requires a focus on customer experience, responsiveness, and flexibility. In contrast, low customer contact, common in manufacturing, emphasizes operations’ efficiency, standardization, and cost-effectiveness. Adaptation to the level of customer interaction is crucial for optimizing operational performance.

The new operations management model is per the Nestlé head of operations and must build trust amongst all stakeholders. It should encourage talent and decision-making, plus enhance transparency. Data, software, and AI are the enablers of this new reality. They give every stakeholder the power to act by disseminating insights, acting as co-pilots and coaches, and automating decision-making to enhance effective operations management.

Pivot your operations management department to the new operations management order via SweetProcess’s process documentation and collaboration tools. SweetProcess is easy to use and has a credit card–free 14-day trial period. Sign up and use it to manage your operations effectively in the evolving world of operations.

Operations Management – Free SweetProcess Trial

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8 responses to “What Is Operations Management? Benefits, Functions, and Types”

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We rely appreciate these ,they have enabled in improving our carriers thanks

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Nice to hear!

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Thank you so much for your sharing. I now got a better view of operation management and that boosts for my career. 🙂 Kudos

Glad you like the article.

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This is quite enlightening. It basically has the required content of operations management. After reading this, one can indeed feel accomplished already.

Gerald, thanks. We are glad to know that our article is enlightening.

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very explanatory, right to equip oneself with comprehensive knowledge of operations management.

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Good to learn , just completed MBA in operation management like to hav more information

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  • Operations Manager Job...

Operations Manager Job Description (Examples)

5 min read · Updated on August 25, 2021

TopResume Editor

In order to ensure your professional resume will support your goals, use this operations manager job description to inform what you should highlight on your resume.

By reviewing job description examples, operations managers will be able to identify what technical and soft skills , credentials, and work experience matter most to an employer in your target field.

Operations manager job description

Manage overall operations and is responsible for the effective and successful management of labor, productivity, quality control, and safety measures as established and set for the Operations Department. The experienced operations manager will ensure safe and efficient operations. Serve as a company representative on regulatory issues. Enhance the operational procedure, systems, and principles in the areas of information flow and management, business processes, enhanced management reporting, and look for opportunities to expand systems. Carry out supervisory responsibilities in accordance with company's policies and applicable laws.

Operations manager duties and responsibilities may include interviewing, selection, and hiring; training new and existing employees; planning, assigning, and directing work; authoring and discussing with employees performance appraisals; addressing employee performance and corrective action plans; employee motivation and rewards. Organizing the budget of the company in collaboration with the director.

The operations management role requires a bachelor's degree in area of specialty and eight to 10 years of experience in the field or in a related area. Familiar with a variety of the field's concepts, practices, and procedures. Rely on extensive operational management experience and judgment to plan and accomplish goals and key performance indicators. Perform a variety of tasks. Lead and direct the work of others. A wide degree of creativity and latitude is expected. Typically reports to the chief operating officer and top management. Directly manages and directs Operational staff.

Operations manager responsibilities:

Recruit, select, train, assign, schedule, coach, counsel, and discipline employees

Communicate job expectations; planning, monitoring, appraising, and reviewing job contributions

Plan and review compensation actions; enforcing policies and procedures

Contribute operations information and recommendations to strategic plans and reviews; prepare and complete action plans; implement production, productivity, quality, and customer-service standards; resolve problems; complete audits; identify trends

Forecast requirements; prepare an annual budget; schedule expenditures; analyze variances; initiating corrective actions

Develop operations systems by determining product handling and storage requirements; develop, implement, enforce, and evaluate policies and procedures; develop processes for receiving product, equipment utilization, inventory management, and shipping

Analyze and improve organizational process and workflow, employee and space requirements, and equipment layout; implement changes

Maintain safe and healthy work environment by establishing, following, and enforcing standards and procedures; complying with legal regulations

Update job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations

Accomplish operations and organization mission by completing related results as needed

Meet or exceed operations labor budget expectations

Manage staff levels, wages, hours, contract labor to revenues

Responsible for all department managers and supervisors, with review/approval responsibility for all operations employees

Run a safe, injury/accident free workplace

Responsible for all aspects of vehicle and heavy equipment rentals

Establish contracts and pricing and ensuring proper maintenance and serving as primary liaison with utilities and local government agencies, such as fire, police, health, and safety agencies

Manage relationships with key operations vendors

Track vendor pricing, rebates, and service levels

Review and approve all operational invoices and ensure they are submitted for payment

Serve as primary point of contact when there are customer issues related to equipment quality, customer service, or accidents and mishaps on-site. In particular, this includes any issues on-site at client facilities, such as breaking a fence or tape residue on flooring

Communicate customer issues with operations team and devise ways of improving the customer experience, including resolving problems and complaints

Work closely with GM and management team to set and/or implement policies, procedures, and systems and to follow through with implementation.

Communicate all operating policies and/or issues at department meetings

Work closely with the inventory manager and team to perform analysis of our inventory and ensure we are utilizing our inventory effectively, purchasing the right equipment, maintaining solid inventory data, and reduce sub-rental expenses

Communicate with legal counsel and safety department to ensure all processes remain compliant with OSHA health and safety regulations and other governmental regulations

A well-crafted resume skills section, highlighting your relevant skills for an operations manager position, will help your resume beat the Applicant Tracking System (ATS), which is the first step to getting your application noticed. Use the operations manager top skills and proficiencies below to help you effectively write your resume.

Operations manager skills & proficiencies:

Conflict Management

Organization

Decision-Making

People Management

Data Entry Skills

Data Processing Skills

Reporting Skills

Deadline-Oriented

Budget Development

Critical Thinking Skills

Problem Solving Skills

Planning and Organizing

Excellent Communication Skills

Persuasiveness

Influencing and Leading

Negotiation

Adaptability

Stress Tolerance

Business Negotiation

Critical Thinking and Problem Solving Skills

Project Management

Business Management

Financial Management

High-Level HR Duties

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What Is Operations Management (OM)?

Understanding operations management (om), operations and supply chain management (oscm), what operations managers do.

  • Frequently Asked Questions

The Bottom Line

  • Business Essentials

Operations Management: Understanding and Using It

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

task of operation management

Natalya Yashina is a CPA, DASM with over 12 years of experience in accounting including public accounting, financial reporting, and accounting policies.

task of operation management

Operations management (OM) is the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.

Operations management teams attempt to balance costs with revenue to achieve the highest net operating profit possible.

Key Takeaways

  • Operations management (OM) is the administration of business practices to create the highest level of efficiency possible within an organization.
  • Operations management is concerned with converting materials and labor into goods and services as efficiently as possible.
  • Corporate operations management professionals try to balance costs with revenue to maximize net operating profit.

Katie Kerpel / Investopedia

Operations management involves utilizing resources from staff, materials, equipment, and technology. Operations managers acquire, develop, and deliver goods to clients based on client needs and the abilities of the company.

Operations management handles various strategic issues, including determining the size of manufacturing plants and project management methods and implementing the structure of information technology networks. Other operational issues include the management of inventory levels, including work-in-process levels and raw materials acquisition, quality control, materials handling, and maintenance policies.

Operations management entails studying the use of raw materials and ensuring that minimal waste occurs. Operations managers use numerous formulas, such as the economic order quantity formula, to determine when and how large an inventory order to process and how much inventory to hold on hand.

The combination of understanding and coordinating the work of a company is central to becoming a successful operations manager.

A critical function of operations management relates to the management of inventory through the supply chain. This process is known as operations and supply chain management (OSCM). To be an effective operations management professional, one must be able to understand the processes that are essential to what a company does and get them to flow and work together seamlessly. The coordination involved in setting up business processes in an efficient way requires a solid understanding of logistics . 

An operations management professional understands local and global trends, customer demand, and available resources for production. Operations management approaches 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 that excessive quantities are on hand. Operations management is responsible for finding vendors that supply the appropriate goods at reasonable prices and have the ability to deliver the product when needed.

Another large facet of operations management involves the delivery of goods to customers. This includes ensuring that products are delivered within the agreed time commitment. Operations management also typically follows up with customers to ensure that the products meet quality and functionality needs. Finally, operations management takes the feedback received and distributes the relevant information to each department to use in process improvement.

Operations managers are involved in coordinating and developing new processes while reevaluating current structures. Organization and productivity are two key drivers of being an operations manager, and the work often requires versatility and innovation. As part of their daily responsibilities, operations managers must possess a variety of skill sets, including:

  • Technical expertise in areas such as production automation, data entry, budget tracking, and design.
  • Organizational ability and attention to detail to include keeping track of project files, employee reports, budgets, schedules, and other details related to company processes.
  • Motivational prowess in the form of strong leadership skills that provide the expertise to motivate others, inspire ideas, and foster a supportive and diverse team.
  • Analytical aptitude , including skill in risk analysis and mitigation when initiating new projects. Operations managers also must analyze processes to identify challenges and offer solutions in the event that negative situations develop.
  • Decision-making proficiency , especially under stress when there is very little time to assess all factors.
  • Ability to maintain quality standards , including as they relate to raw materials, machinery, manufacturing procedures, packaging, delivery processes, and the finished product.

A master of business administration (MBA) degree in operations management can provide global perspective on industry trends and an awareness of financial regulations and political uncertainties that can affect an organization. It also provides a solid grasp of the inherent complexities and the tools needed to respond well to change.

What is the purpose of operations management (OM)?

Operations management (OM) is concerned with controlling the production process and business operations in the most efficient manner possible. OM professionals attempt to balance operating costs with revenue to maximize net operating profit.

What are some systems of operations management?

Modern operations management revolves around four theories:

  • Business process redesign (BPR) , which is focused on analyzing and designing  workflow  and business processes within a company. The goal of BPR is to help companies dramatically restructure the organization by designing the business process from the ground up.
  • Reconfigurable manufacturing systems , designed to incorporate accelerated change in structure, hardware, and software components. This allows systems to adjust rapidly to the capacity to which they can continue production and how efficiently they function in response to market or intrinsic system changes.
  • Six Sigma , an approach that focuses on quality. The word “six” references the control limits, which are placed at six  standard deviations  from the normal distribution mean. Tools used within the Six Sigma process include trending charts, potential defect calculations, and other ratios.
  • Lean manufacturing , which is the systematic elimination of waste within the manufacturing process. This theory sees resource use for any reason other than value creation for customers as wasteful and seeks to eliminate wasteful resource expenditures as much as possible.

What is an example of operations management?

Operations management is prevalent in the healthcare sector . The current healthcare system overuses expensive, technological, and emergency-based treatment. High costs from care often remain uncompensated due to uninsured patients. A prevalence of services in expensive settings creates a burden on taxpayers, health insurance holders, and healthcare institutions.

In simple terms, operations management (OM) is the process of prioritizing and employing business practices designed to achieve maximum efficiency as a means to achieve maximum profitability. Within the process, operations managers utilize organization and productivity to achieve their primary goals.

Balancing the efficient use of resources, including staff, materials, equipment, and technology, is key to a successful OM process and, by extension, to the success of the company.

University at Buffalo, School of Management. “ Operations and Supply Chain Management .”

Indeed. “ 15 Essential Operational Management Skills .”

task of operation management

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In-depth guide to different types of operations management

February 19, 2024 - 10 min read

Wrike Team

What do you think when you hear the phrase operations management? A dry topic reserved for the boardroom? Well, operations management is actually all around us. I want you to think of the last time you ordered a coffee or bought something online. You know, the process that ensures your coffee is hot and your package arrives on time? That’s operations management in action.

Whether it’s a small café or a global tech company, every business relies on effective operations management. However, not all operations management is the same. Different companies have different needs, and how they manage operations reflects that. 

Some focus on making products, while others concentrate on providing services. Some prioritize speed and efficiency, while others put quality or flexibility first. With the introduction of work management software like Wrike, the days of juggling multiple projects are over. You can have a streamlined process where every project , from your café’s daily inventory restock to the next groundbreaking tech release, starts with all the information you need right at your fingertips. 

Organize your workloads and reach your operational goals with Wrike — start your free trial now .

This article will cover the different types of operations management, from manufacturing and service operations to project-based operations. We’ll check out how each type works, their challenges, and the strategies to overcome them. By the end, you’ll understand what operations management looks like in various settings and why it’s such an important part of any business.

So, if you’ve ever wondered how your favorite products are made or how services are delivered so seamlessly, you’re about to find out. Are you ready to peel back the curtain and see what makes it tick?

Understanding operations management

Have you ever wondered how things just work in a business? Let’s break down operations management into something we can all relate to. You’re planning a big road trip with your friends. You’ve got to figure out your route, what snacks to bring, how to keep entertained, and where to make pit stops. In a way, you’re managing the operations of your road trip to ensure everything goes smoothly.

Now, apply that thinking to a business. Operations management is the art and science of ensuring a company’s day-to-day activities run without a hitch. It manages all the processes that go into producing goods or services, from the initial idea to the customer’s hands.

Operations management is a relentless quest for improvement. You need to ask yourself, “What can I do better?” Wrike’s operations templates can help you manage your daily operations. These templates include everything from employee onboarding and offboarding to detailed attendance tracking and inventory management.

Consider the attendance tracker template , for instance. It simplifies tracking employee presence, ensuring that staffing needs are always met without the hassle of manual checks. Or the vendor management template , which provides a clear overview of stock levels, aiding in timely reorder processes and preventing overstocking or stockouts. And for those looking at the bigger picture, the business model canvas template allows teams to visualize and plan their strategies comprehensively.

business model

Without operations management, businesses could quickly fall into problems. Imagine a restaurant that doesn’t plan its menu properly, runs out of ingredients, or fails to serve meals on time. Customers would be unhappy and the business would suffer. That’s why effective operations management is so important. 

Operations management also involves finding ways to do things better. You need to ask yourself, “How can we make our products even better?” or “Is there a faster way to deliver our services?” By continuously looking for improvements, businesses can stay ahead of the competition and keep their customers returning for more.

Next time you enjoy a seamless experience with a product or service, remember there’s a lot of operations management magic behind the scenes.

Enjoy an intuitive, visual layout of your strategic operations with Wrike — start your free trial now .

Here are several key functions that are essential for the smooth functioning of an organization:

  • Planning: Operations managers are responsible for developing strategic plans to achieve organizational goals. This involves forecasting demand, setting production targets, and creating schedules to optimize resource utilization.
  • Organizing: Operations managers coordinate allocating resources, including personnel, equipment, and facilities. They design workflows, establish production processes, and implement systems to maximize efficiency.
  • Controlling: Operations managers monitor production processes, assess performance against targets, and implement corrective actions when necessary. They use key performance indicators (KPIs) to measure productivity, quality, and cost-effectiveness.
  • Improving: Operations managers continually seek ways to improve processes and enhance performance. They analyze data, identify bottlenecks, and implement process improvements, such as lean manufacturing techniques or automation.

Types of operations management

Here are the different types of operations management, each with its focus and objectives:

Service operations management

How do top-notch services come your way with a snap of your fingers? Well, that’s service operations management in action. This could be anything from running a hotel to operating a bank or providing internet services. Here, the focus is on delivering top-notch service to customers. It’s not about tangible products but ensuring customer satisfaction through efficient service delivery. Managing staff schedules, ensuring speedy service, and maintaining high customer service standards are all part of the mix.  

Ensuring everyone gets quick, top-notch service is as important as having a happy, well-organized team that provides services to your customers. Imagine how useful it would be if you could see exactly what each part of your team is working on and how it all ties together. 

That’s where Wrike’s cross-tagging shines. It lets teams see tasks in the bigger picture of their projects and the company’s goals. With Wrike’s cross-tagging, you can bookmark those key tasks and subtasks, no matter where they live — be it in folders, milestones, phases, or across various projects. 

product screenshot of wrike cross-tagging feature

This feature is a game changer, especially when you need to zero in on specific details without losing sight of the big picture. Let’s say you’re overseeing the budget for a series of events. With cross-tagging, you can tag just the budget-related subtasks and have them appear in your folder or a specific project report. It streamlines your focus, ensuring you’re always in the loop with the tasks needing your green light.

Production operations management

This is all about making stuff. Whether it’s cars, smartphones, or your favorite chocolate bars, production operations management focuses on turning raw materials into finished goods. It involves planning production schedules, managing inventory, and ensuring machinery is humming without a hitch. 

Project operations management

Big projects, tight deadlines! How do the pros handle it? Let’s find out! Project operations management emphasizes executing specific organizational projects. This could be constructing a building, developing new software, or organizing a marketing campaign . It focuses on hitting those milestones and achieving the project goals within the set time frame and budget. 

If you’re working on a big project, Wrike’s Kanban board lets you break it down into smaller phases or stages. You can see if something’s stuck and move things around so the work keeps flowing. It keeps things smooth and makes sure nothing stops the whole process.

wrike board view showing kanban project

Supply chain operations management

Ever been in a relay race where the baton passes through multiple hands as smoothly as possible? That’s precisely what supply chain operations management entails. Supply chain operations management ensures that products move seamlessly from suppliers to manufacturers, then to warehouses, and finally to stores or directly to customers. It oversees the entire supply chain to minimize costs and maximize efficiency. Coordination and collaboration across different segments ensures that customers get what they want, when they want it.

Inventory operations management

Inventory operations management focuses on the efficient management of inventory levels. This type of operations management is important in industries where inventory plays a significant role, such as retail, manufacturing, and e-commerce.

You’ve got to keep enough stock so customers find what they need when they need it, but not so much that your storage costs go through the roof. You can have a central spot where you can see everything about your inventory: what’s flying off the shelves, what’s gathering dust, and when it’s time to reorder. 

Wrike’s dashboards can be a handy tool here, helping pull all this information together and making it easier to keep your inventory lean but not too lean. With Wrike, you’re not just guessing when to order more products or which items are your bestsellers. The dashboard shows you real numbers and trends, helping you make informed decisions. 

executive portfolio dashboard

And if you need to adjust your team’s focus, say, to handle a sudden spike in demand for a hot product, Wrike’s intuitive Workload view lets you redistribute tasks with a simple drag-and-drop action.

The role of operations managers

If you think being an operations manager is a walk in the park, think again! What does it really take to be an operations manager? Operations managers analyze market trends, assess competitors, and identify growth opportunities. Based on this analysis, they develop strategic plans, set objectives, and allocate resources to achieve organizational goals.

Here’s a closer look at their functions:

  • Process optimization: Operations managers are relentless in their pursuit of efficiency. They meticulously analyze current processes to identify bottlenecks and implement improvements. This could mean reorganizing workflows, introducing automation, or adopting Lean manufacturing principles to reduce waste and increase productivity.
  • Resource allocation : They master the art of resource management , ensuring that every project or task has the necessary inputs — be they human resources, materials, or finances.  
  • Quality assurance: Maintaining the highest quality standards is non-negotiable. Operations managers establish rigorous quality control protocols to ensure that every product or service meets the organization’s and customers’ standards.  
  • Team leadership: Beyond managing processes and systems, operations managers lead teams. They are responsible for hiring, training, and motivating employees, creating an environment where teamwork and productivity thrive. 
  • Strategic planning: Operations managers forecast demand, assess market trends, and prepare the operation to meet future challenges. This includes capacity planning , supply chain management, and investment in new technologies or methodologies.
  • Risk management : Whether it’s supply chain disruptions, equipment failures, or changes in market demand, operations managers identify risks and develop mitigation strategies to keep the business on track.
  • Customer satisfaction : Operations managers streamline the delivery of products and services, ensuring that customers’ needs are met promptly and efficiently.  

Modern trends in operations management

So, what’s new in how companies work? From robots in the warehouse to meetings in the cloud, things are changing fast. Operations management is a dynamic field that constantly evolves to meet the changing needs of businesses. Several trends have emerged in recent years that are reshaping how organizations approach their operations. Here are a few of them:

Automation, robotics, AI, and data analytics have impacted operations, including production, inventory management, and supply chain optimization.

Keeping up with all the moving parts can be tough when running a business. According to Wrike’s efficiency report , 82% of business leaders say their teams already use AI in their software applications. And more than 80% are planning to dig deeper into their pockets to make the most of AI and automation.

If you want to zoom in on what the experts are saying, Alexey Korotich, Wrike’s Vice President of Product , recently made some predictions about generative AI . He said: “Organizations will shift from experimentation to working with artificial intelligence more meaningfully. AI will help companies analyze and connect many data sources, creating more transparency and providing critical insights that ultimately help teams make better decisions.”

It means less time digging for what you need and more time doing the stuff that really counts.  

Sustainability and green energy

Going green isn’t just for Earth Day ! How are businesses weaving sustainability into their operations? With growing concerns about environmental sustainability, operations managers are increasingly focusing on adopting eco-friendly practices. Green operations management minimizes waste, reduces energy consumption, and implements sustainable manufacturing processes. For example, implementing energy-efficient technologies and practices can reduce energy costs and create a more sustainable business model.

What’s more, customers are becoming more environmentally conscious and are actively seeking out businesses that prioritize sustainability. By incorporating green practices into their operations, organizations can attract environmentally conscious consumers and gain a competitive advantage in the market.

Globalization

How does a decision made thousands of miles away affect your local market? Operations managers face the challenges of managing global supply chains and international operations. They need to navigate cultural differences, legal requirements, and logistics complexities.  

This requires a deep understanding of international markets and effective communication and collaboration with stakeholders from different cultural backgrounds. Despite the challenges, globalization also presents opportunities for organizations to expand their reach and access new markets. Organizations can tap into new customer bases and achieve economies of scale by effectively managing global operations.

By keeping up with modern trends and embracing advancements in technology and sustainability, operations managers can continue to enhance productivity, improve customer satisfaction, and contribute to the long-term success of their organizations.

Leveraging the right tools in operations management

And that’s a wrap! Aren’t you feeling like an operations expert now? We’ve covered a lot of ground! From understanding the basics to exploring various types of operations management, we’ve seen how this field keeps the wheels of business turning smoothly.   

But what does this all mean for you, the reader? Maybe you’re an operations manager, a business owner, or someone curious about the inner workings of successful companies? 

It means the secret to keeping your business wheels turning are the everyday tools that bring your operations to life. With Wrike, you can see the big picture and the tiny details all in one place with dashboards that track your projects. You can see how your teams fit into various projects, ensuring you’re always in the loop through cross-tagging . You can cut through the noise of miscommunication with request forms that capture all the info you need upfront. G one are the days of back-and-forth emails trying to gather project essentials. Now, you can kick-start your operations with all the details from the get-go, ensuring every team member knows exactly what to do and when. 

screenshot of request forms in Wrike

Matt Andrews, Marketing Campaign Manager at Aerotek , succinctly captures the impact of using Wrike into your daily workflows.

“Rather than a call or email resulting in a longer call or meeting, they now go to Wrike and fill out a very robust request form. It creates the job your team is going to work on from start to finish.”

Whether you’re fine-tuning your current operations or steering your business into new territories, remember that tools like Wrike support you every step of the way. Why not take the first step today? 

Start your free trial with Wrike and see how it can transform your operations management for the better.

Note: This article was created with the assistance of an AI engine. It has been reviewed and revised by our team of experts to ensure accuracy and quality.

Wrike Team

Occasionally we write blog posts where multiple people contribute. Since our idea of having a gladiator arena where contributors would fight to the death to win total authorship wasn’t approved by HR, this was the compromise.

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Sales is part art and part science. It balances a charisma, careful relationship-building, and gut feelings with refined processes, clear metrics, and data-backed decisions. It's a balancing act. And sales can feel even more complex because it's a function without a clear start and stop. Sales teams are responsible for nurturing and converting leads but also retaining and even upgrading existing customers.  Needless to say, any sales professional will readily admit that there are a lot of moving parts — and that's exactly why a sales tracker can be so beneficial.  What is a sales tracker? As the name implies, a sales tracker is a tool or database that stores, organizes, and manages all of the information and updates that are relevant to your sales process.  While you might readily think of keeping track of any sales your team makes, a sales tracker is far more comprehensive than simply logging your closed deals. 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Regular Follow-Ups and Support: Conduct regular check-ins to address any issues or challenges your team may be facing. Encourage them to share their experiences and provide necessary support and solutions. Continuous Learning: As the tool gets updated or new features are added, ensure to update your training materials and conduct refresher training sessions. Remember, the goal is to make your team comfortable and proficient with the sales tracker. This not only requires initial training but also ongoing support and learning. Why is sales tracking important? Perhaps you and your team have been making things work without a unified sales activity tracker. Why bother going through the work of pulling everything into one place?  Having a centralized spot to manage all of the stages and tasks in your sales process does more than help you figure out how to keep track of sales. 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Operational Planning: How to Make an Operations Plan

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The operations of your business can be defined as the sum of all the daily activities that you and your team execute to create products or services and engage with your customers, among other critical business functions. While organizing these moving parts might sound difficult, it can be easily done by writing a business operational plan. But before we learn how to make one, let’s first understand what’s the relationship between strategic and operational planning.

Operational Planning vs. Strategic Planning

Operational planning and strategic planning are complementary to each other. This is because strategic plans define the business strategy and the long-term goals for your organization, while operational plans define the steps required to achieve them.

What Is a Strategic Plan?

A strategic plan is a business document that describes the business goals of a company as well as the high-level actions that will be taken to achieve them over a time period of 1-3 years.

What Is an Operational Plan?

Operational plans map the daily, weekly or monthly business operations that’ll be executed by the department to complete the goals you’ve previously defined in your strategic plan. Operational plans go deeper into explaining your business operations as they explain roles and responsibilities, timelines and the scope of work.

Operational plans work best when an entire department buys in, assigning due dates for tasks, measuring goals for success, reporting on issues and collaborating effectively. They work even better when there’s a platform like ProjectManager , which facilitates communication across departments to ensure that the machine is running smoothly as each team reaches its benchmark. Get started with ProjectManager for free today.

Gantt chart with operational plan

What Is Operational Planning?

Operational planning is the process of turning strategic plans into action plans, which simply means breaking down high-level strategic goals and activities into smaller, actionable steps. The main goal of operational planning is to coordinate different departments and layers of management to ensure the whole organization works towards the same objective, which is achieving the goals set forth in the strategic plan .

How to Make an Operational Plan

There’s no single approach to follow when making an operation plan for your business. However, there’s one golden rule in operations management : your strategic and operational plans must be aligned. Based on that principle, here are seven steps to make an operational plan.

  • Map business processes and workflows: What steps need to be taken at the operations level to accomplish long-term strategic goals?
  • Set operational-level goals: Describe what operational-level goals contribute to the achievement of larger strategic goals.
  • Determine the operational timeline: Is there any time frame for the achievement of the operational plan?
  • Define your resource requirements: Estimate what resources are needed for the execution of the operational plan.
  • Estimate the operational budget: Based on your resource requirements, estimate costs and define an operational budget.
  • Set a hiring plan: Are there any skills gaps that need to be filled in your organization?
  • Set key performance indicators: Define metrics and performance tracking procedures to measure your team’s performance.

task of operation management

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Operational Plan Template

Use this free Operational Plan Template for Word to manage your projects better.

What Should be Included in an Operational Plan?

Your operational plan should describe your business operations as accurately as possible so that internal teams know how the company works and how they can help achieve the larger strategic objectives. Here’s a list of some of the key elements that you’ll need to consider when writing an operational plan.

Executive Summary

An executive summary is a brief document that summarizes the content of larger documents like business plans, strategic plans or operation plans. Their main purpose is to provide a quick overview for busy stakeholders.

Operational Budget

An operational budget is an estimation of the expected operating costs and revenues for a given time period. As with other types of budget, the operational budget defines the amount of money that’s available to acquire raw materials, equipment or anything else that’s needed for business operations.

It’s important to limit your spending to stay below your operational budget, otherwise, your company could run out of resources to execute its normal activities. You can use our free operating budget template for Excel to track your operating costs.

Operational Objectives

It’s essential to align your operational objectives with your strategic objectives. For example, if one of your strategic objectives is to increase sales by 25 percent over the next three years, one possible operational objective would be to hire new sales employees. You should always grab your strategic plan objectives and turn them into one or multiple action items .

Processes & Workflows

Explain the various business processes, workflows and tasks that need to be executed to achieve your operational objectives. Make sure to explain what resources are needed, such as raw materials, equipment or human resources.

Operational Timeline

It’s important to establish a timeline for your operational plan. In most cases, your operational plan will have the same length as your strategic plan, but in some scenarios, you might create multiple operational plans for specific purposes. Not all operational plans are equal, so the length of your operational timeline will depend on the duration of your projects , workflows and processes.

Hiring Plan

Find any skills gap there might be in your team. You might need to hire a couple of individuals or even create new departments in order to execute your business processes .

Quality Assurance and Control

Most companies implement quality assurance and control procedures for a variety of reasons such as customer safety and regulatory compliance. In addition, quality assurance issues can cost your business millions, so establishing quality management protocols is a key step in operational planning.

Key Performance Indicators

It’s important to establish key performance indicators (KPIs) to measure the productivity of your business operations. You can define as many KPIs as needed for all your business processes. For example, you can define KPIs for marketing, sales, product development and other key departments in your company. This can include product launch deadlines, number of manufactured goods, number of customer service cases closed, number of 5-star reviews received, number of customers acquired, revenue increased by a certain percentage and so on.

Risks, Assumptions and Constraints

Note any potential risks, assumptions and time or resource constraints that might affect your business operations.

Free Operational Plan Template

Leverage everything you’ve learned today with our template. This free operational plan template for Word will help you define your budget, timeline, KPIs and more. It’s the perfect first step in organizing and improving your operations. Download it today.

ProjectManager's free operational plan template for Word.

What Are the Benefits of Operational Planning?

Every plan has a massive effect on all team members involved, and those can be to your company’s benefit or to their detriment. If it’s to their detriment, it’s best to find out as soon as possible so you can modify your operational plan and pivot with ease.

But that’s the whole point of operational planning: you get to see the effect of your operations on the business’s bottom line in real time, or at every benchmark, so you know exactly when to pivot. And with a plan that’s as custom to each department as an operational plan, you know exactly where things go wrong and why.

How ProjectManager Can Help with Operational Planning

Creating and implementing a high-quality operational plan is the best way to ensure that your organization starts out a project on the right foot. ProjectManager has award-winning project management tools to help you craft and execute such a plan.

Gantt charts are essential to create and monitor operational plans effectively. ProjectManager helps you access your Gantt chart online so you can add benchmarks for operational performance reviews. You can also create tasks along with dependencies to make the operation a surefire success.

A screenshot of a gantt chart in ProjectManager

Whether you’re a team of IT system administrators, marketing experts, or engineers, ProjectManager includes robust planning and reporting tools. Plan in sprints, assign due dates, collaborate with team members and track everything with just the click of a button. Plus, we have numerous ready-made project reports that can be generated instantly, including status reports, variance reports, timesheet reports and more.

project status report builder

Related Operations Management Content

  • Operational Strategy: A Quick Guide
  • Operations Management: Key Functions, Roles and Skills
  • Operational Efficiency: A Quick Guide
  • Using Operational Excellence to Be More Productive

Operational planning isn’t done in a silo, and it doesn’t work without the full weight of the team backing it up. Ensure that your department is successful at each benchmark. ProjectManager is an award-winning pm software dedicated to helping businesses smooth out their operational plans for a better year ahead. Sign up for our free 30-day trial today.

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COMMENTS

  1. 7 Functions of Operations Management and Skills Needed [2024] • Asana

    1. Operational planning Operational planning is the foundational function of operations management. Your duties within this function may include: Monitoring daily production of goods Managing and controlling your inventory

  2. Operations Management: Key Functions, Roles and Skills

    Operations management (OM) is the process of administration of business operations and/or production management in order to achieve specific goals such as increased productivity and higher profitability. This is done by creating the most efficiency possible in various business operations, such as turning labor and materials into goods and services.

  3. Operations Management: Processes & Best Practices

    Operations management is the practice of handling day-to-day business functions in a manner that is efficient and that maximizes profitability. This discipline focuses on formulating strategies and taking actions to optimize production and supply chain performance. Key Takeaways

  4. Operations Management: What Is It and Why Does It Matter?

    Operations management is the administration of business structure, practices, and processes to enhance efficiency and maximize profit. It refers to the management of functions that a business needs to run effectively day-to-day, including: Overseeing multiple departments and providing goals Overseeing and streamlining processes

  5. What Is Operations Management? (Plus Importance and Duties)

    Operations management is the implementation of business practices to maximize an organization's efficiency. The process includes the planning, supervising and organizing of supply chain activities like production, manufacturing and the delivery of final products to customers.

  6. Operations Management 101 & 201

    The term operations management encompasses planning, implementing, and supervising the production of goods or services. Operations managers have responsibilities in both strategy and day-to-day production, in either manufacturing or services.

  7. What Is Operations Management? Benefits, Functions, and Types

    Operations management (OM) delivers the power to act by linking process and value. Operations managers, therefore, plan, organize, and supervise manufacturing and production. However, their decisions are only efficient when they utilize the least resources to create shareholder value and satisfy customer demands.

  8. 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. Effective operations management can involve many different responsibilities, depending on the company.

  9. The Ultimate Guide to Operations Management

    Operations management's functions and roles change significantly in line with the nature and size of the business. The role of operations management may include a few or all of the below tasks: Project management. Planning for information systems. Supporting in product design, product planning, service planning, and service execution strategies.

  10. What Is Operations Management? (Plus Job Duties and Skills)

    Operations management helps a company monitor daily business activities and identify improvement areas that can enhance current operations. Learning more about operations management and its importance can help you determine if your career goals align with this type of role in a company.

  11. Operations Management

    Operations management responsibilities include giving attention to production and process design, layout design, control of inventory and raw materials, distribution, proper sales and marketing, delivery of customer service, etc. Operations Management Explained

  12. What Is Operations Management? (With Importance and Skills)

    Effective operations management can benefit both teams and organizations. Some advantages are that it: Improves product quality A key part of operations management involves overseeing product development, design, and quality assurance. By effecting a reliable quality assurance process, operations management helps a business maintain consistent ...

  13. Operations Manager Job Description (Examples)

    Operations manager duties and responsibilities may include interviewing, selection, and hiring; training new and existing employees; planning, assigning, and directing work; authoring and discussing with employees performance appraisals; addressing employee performance and corrective action plans; employee motivation and rewards.

  14. Operations Management: Understanding and Using It

    Operations management is concerned with converting materials and labor into goods and services as efficiently as possible. Corporate operations management professionals try to balance costs...

  15. Operations management

    Operations management is concerned with designing and controlling the production of goods and services, ensuring that businesses are efficient in using resources to meet customer requirements.. It is concerned with managing an entire production system that converts inputs (in the forms of raw materials, labor, consumers, and energy) into outputs (in the form of goods and services for consumers).

  16. Ultimate Guide to Operations Management: How to Improve Production

    Operations management is the process of organizing and optimizing the production and manufacturing of company products. Operations management is all about creating a unique production strategy that satisfies company needs and fulfills manufacturing process expectations.

  17. Types of operations management: The in-depth guide

    Supply chain operations management involves managing the flow of goods and services from suppliers to customers. This type of operations management is critical in industries such as retail, manufacturing, and logistics. Supply chain operations managers must optimize the entire supply chain network to minimize costs, reduce lead times, and ...

  18. Role of Operations Manager: 10 Key Skills You Must Have

    As a branch of management, operations management involves supervising the entire production timeline, from input to finished product or service. One of the primary roles of operations manager is to optimize day-to-day activities and streamline workflows to enhance profitability.

  19. Operations Manager Job Description [+2024 TEMPLATE]

    Operations Manager responsibilities include: Ensuring all operations are carried on in an appropriate, cost-effective way Improving operational management systems, processes and best practices Helping the organization's processes remain legally compliant Hiring an Operations Manager?

  20. Operations Manager Job Description and Duties

    1. Develop, implement, and review processes and procedures All work operations are processes. Operations managers deal with processes across a wide variety of functional workflows, from manufacturing to sales and everything in between.

  21. 15 Essential Operational Management Skills

    Staff management Operations managers work in management roles and are typically responsible for the direction and oversight of multiple teams of employees. As a manager, you need to have strong skills that make you efficient in delegating tasks, organizing and maintaining employee schedules and conducting evaluations and employee assessments.

  22. Operational Planning: How to Make an Operations Plan

    Operational plans go deeper into explaining your business operations as they explain roles and responsibilities, timelines and the scope of work. Operational plans work best when an entire department buys in, assigning due dates for tasks, measuring goals for success, reporting on issues and collaborating effectively.

  23. Using algorithms to improve knowledge work

    Separating hand and brain. Engineers utilized sensors and communication tech to dislocate physical labor from cognitive knowledge tasks in drilling operations. Standardizing tasks. The area hired petrophysicists with doctorates to create standardized protocols for estimating ideal drilling paths and pressures. Failure.