Operations Management as a Central Function in Organization

What is operations management?

Every organization makes product. At the heart of an organization is the set of activities directly concerned with making this product. These activities are the operations, and are the organization’s most important function. Operations management is concerned with the way the operations are performed.

Operations Management is often used along with the term Productions Management. Productions Management refers to the application of management principles to the production function in a factory.

Operations Management is the systematic direction, control, and evaluation of the entire range of processes that transform inputs into finished goods or services. It is consist of activities such as scheduling work, assigning resources ie; people, equipment, managing inventories, assessing quality standards etc. operations management is a process through which resources and inputs are converted into more useful products.

Operations management is the management function that is responsible for all the activities directly concerned with making a product. It is responsible for collecting various inputs, and converting them into desired outputs.

How operations convert inputs to desired output

Organizations take variety of inputs and perform the operations needed to convert these into desired outputs. The input include raw materials, money, people, machines, time, and other resources. Operations include manufacturing, assembly, packing, serving, training, and so on. The output include goods, services, staff wages, and waste materials. To give specific examples:

• A car assembly plant takes inputs of components, materials, energy, robots, people and so on; its operations of pressing, welding, assembly, painting, finishing; the outputs include cars, and spare parts.
• A makeup organization takes inputs of components, raw materials, energy, water, chemicals, people and so on; its operations of heating, cooling, steam generation, cleaning, sanitizing procedures of machines; the outputs include cosmetic, make up, and wages.
• A restaurant takes inputs of food, chefs, kitchen, energy, waiters, tables, and so on; it perform operations of food preparation, cooking, serving; outputs include meals and satisfied customers.
•   A university takes inputs of students, books, buildings, staff, and so on; it perform operations of teaching, research, administration, service; outputs include better educated people, research findings, and new books.

The operations management works in all kinds of organizations. These can be:

• Primary industries - agriculture, mining, and quarrying.
• Secondary industries- manufacturing and construction.
• Tertiary industries – which are all the services.

It is important to emphasize that product can be either tangible goods or intangible services, and operations are any activities that produce these.

The importance of operations management

Managers make the decisions that keep an organization working effectively. Their decisions affect inputs, operations, and outputs. Then they use feedback on performance and other relevant information to make further decisions.

Operations management has an effective role in the fulfillment of pre-determined goals of an organization. It ensures that all activities are going as planned by constantly monitoring all operations of organization.

Operations management improves the productivity of employees. It checks and measures the performance of all people working in the organization.  It helps in motivating the employees towards their roles. Operation managers guide all peoples in performing their roles and provide them with better environment.

Operations management ensures that quality products are delivered to all customers that could provide them better satisfaction and makes them happy. It focuses on optimum utilization of all resources of the organization. Operation managers keep a check on all activities and ensure that all resources are utilized on only useful means and are not wasted.

Central functions in an organization

The main purpose of an organization is to produce goods and services that satisfy customer demand. From this statement you can identify three central functions that must exist in all organizations.

1-    Sales/ marketing: this identifies customer demand, stimulates new demand, collect and analyses information on customer needs, organizes advertising, take orders, makes sure that products are delivered to customers, gives after-sales service, and so on.

2-    Operations management: this is responsible for actually producing the goods and services.

3-    Accounting/finance: this raises capital, invests funds, records financial transactions, collects money, pays bills, collects cost information, maintains accounts, and so on.

Operations management functions

Operations Management is a branch that deals with managing operations and processes within the organization. Effective management of operations ensures successful delivery of the project. The operation managers optimizes the operations by making rational use of resources and capital. Some of the key functions of an Operations Manager includes:

Finance- Finance plays a leading function in operations management. The operation manager should not waste finance in non-productive tasks. He should ensure that all finance of the organization is utilized for the manufacturing of useful goods or services which may satisfy consumer needs.

Operation– The function of operation management is basically concerned with planning, organizing, directing and controlling of daily routine operations of an organization. The operation manager ensures that all activities are going effectively and efficiently.

Strategy– The strategy formulation is also the leading function of operation management. The operation manager should have pre-planned tasks. Formulation of plans and tactics helps the organization in optimizing their resources and developing a competitive edge over competitors.

Product Design– It is the responsibility of operations manager to design the product according to the market trends and demands. He should ensure that innovative techniques are incorporated within the product and its quality is maintained.

Maintaining Quality– Operations managers should ensure a best quality of products. The manager should not compromise with the quality of Products. They should work on quality management and should supervise all tasks. If any defects are found they should take steps to rectify such defects.

Supply Chain Configuration– The main motive of Supply Chain Configuration is to ensure effective management, monitoring and controlling of all the main activities that are held in a firm. The supply chain configuration starts from the supply of the raw materials and continues till the production of the final product and then their selling to the customers which will satisfy their needs and wants.

Forecasting– Forecasting refers to the process of making an estimation regarding certain events that might occur in the future. In operation management, forecasting refers to the estimation of customer’s demand so that production can be done accordingly. Through this, the manager gets to know what to produce, when to produce and how to produce in accordance with the customer’s needs.

The operations management approach to problems

Another view of operations management looks at the way it tackles problems. It does this in four stages:

1-    Observation: managers realize there is a problem and that something must be done about it. They examine the problem, collect data, set objectives, consider the context and discuss various ideas.

2-    Formulation: this is where people with appropriate skills review the data, build models of the situation, fined solutions to the models, and suggest alternative actions.

3-    Analysis: managers examine the alternatives, give values to parameters, identify the best decisions and make recommendations.

4-    Implementation: this is where managers make final decisions, implement the solution, monitor actual performance, collect feedback and keep results up to data.