Operations Management: Meaning and Importance

Operations Management: Meaning and Importance

The business world is becoming more and more complex every day. Operations management helps businesses to grow in the competitive market. Operations management (OM) is the administration process of business practices to create a higher level of efficiency and effectiveness within the organization. It gives attention to the supply chain management process of the organization in converting the raw material available in the organization into goods and services with value.

It is expected to maximize organizational profits through having a proper OM system. It is expected to efficiently convert the materials and labor in the organization into goods and services through operations management. Reducing costs and increasing revenue through this process will help the businesses to maximize their profits. The operations management teams in the organizations are trying to balance the costs of the business process and the revenues in order to achieve the highest net operating profit.

The operations management process is about utilizing the available resources in the organization such as materials, equipment, employees, technology, and practices and create the production process to get a maximum return from the resources.

Operations managers have to handle various strategic issues such as the implementation of the project management methods, determining the size and the capacity of the manufacturing plants, inventory management levels, stock control, and quality adherences, material handling and maintenance as well as information technology network establishments.

It is extremely important for the operations managers to use the available data, conduct researches and analyses, and forecast the estimated demand for the product. Based on the forecast, the production process has to be planned and the inventory should be maintained.

Importance of Operations Management

– Helps to improve the product quality

OM team usually checks the reliability and the durability of the product before any other team in the production process. Apart from that, they ensure the quality of the product at the level of providing it to the customers. This helps the business to achieve customer loyalty as well as a competitive advantage over the other competitive products in the market.

Operations managers have to set and maintain a list of quality checks about the product and a checklist to confirm the achievement of the quality stages during the production process. This includes informing all the relevant parties to the production process about their job responsibilities as well as the expectation of the business process from them.

This will help the organization to clearly communicate the business goals and objectives to the employees and to express the expectation from them to have a smooth production process.

– Improve productivity

Productivity is identified as a ratio of input and output of the production process. OM has a responsibility to increase the productivity of the production process with the intention of maximizing the profits of the business.

– Reduce Costs

As a part of increasing productivity, operations management looks into cost reduction in the areas where unnecessary costs are involved.

– Increase customer satisfaction

Since operations management ensures the quality of the product and tries to provide the product to satisfy the unmet needs of the customer, it gives the product the opportunity to increase the level of customer satisfaction. This can lead to customer loyalty towards the product and the brand.

– Ensure employee motivation

Since operations management is involved with the entire production process, it has the responsibility of ensuring employee satisfaction and motivation to have a smooth process. The right employees should be assigned for the right job responsibility, the necessary training and development opportunities should be provided and the employees should be motivated with a positive attitude towards their job roles. The operations managers should be able to guide the employees to solve the issues in the process and help them to achieve personal growth while achieving organizational growth.

Leave a Comment

Your email address will not be published.