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Have you ever paid attention to the management structure in a restaurant? You have a team of chefs and cooks and another team of stewards and hostesses. In several restaurants, the head chef is the owner but when it comes to interacting with people, the manager often comes in. Why is it that a chef doesn’t overlook the operations of their own restaurant?
Operations management is the difference between being a great cook and running a successful restaurant. You may have all the skills to impress someone with your culinary skills but running a restaurant is a core function of your business. Only in a few scenarios do chefs volunteer to manage everyday operations.
Do you want to know what is operations management? Read on to explore what the concept means, what it entails and why it’s an inevitable part of large businesses.
An Introduction To Operations Management
Various Processes Of Operations Management
Why Is Operations Management Important?
Effective Strategies Of Operations Management
How To Be An Effective Operations Manager
An Introduction To Operations Management
Businesses need to maximize their efficiency in order to increase profitability. Operations management is that aspect of business administration that encompasses planning, implementing and supervising the production of goods and services to maximize efficiency and success. It includes resources and inputs from people, equipment, technology and materials, which convert into effective output for both daily and strategic levels within an organization.
In short, the meaning of operations management is hidden in the name itself. You manage the operations and processes in an organization. Although it deals with different areas like people management, manufacturing and technology, the underlying agenda is to get the most out of an organization’s resources. It’s also known as production management because of its cross-functionality—involving various departments like finance, marketing and sales.
Here are the underlying principles that define operations management:
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Planning:
You must fully understand the conditions (e.g., risk factors) as you plan and adjust your plan to optimize the process
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Process:
Your goods and/or services need a strong and cyclical process so that you can maintain continuity
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Efficiency:
You need to address issues related to inadequate resources and downtime to create optimal efficiency
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Cost Control:
When you pay attention and manage the production process in an organization, you have greater control over its cost structure
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Quality:
You can only claim a spot in the market when you match or outdo your competitors; quality control helps gain loyal customers and maintain customer satisfaction
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Technology:
Behind all the processes and procedures is technology; it’s the driving force that keeps an organization ahead of the curve
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Profitability:
A powerful operations management system is dedicated to generating and/or maximizing profits; this is the bottom line for any business
Various Processes Of Operations Management
There are many core processes involved in the successful functioning of an organization. These processes need to be measured, optimized and improved for increasing efficiency. Here are some examples of operations management that’ll illustrate these processes in detail:
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Procurement
It includes selecting and managing suppliers, i.e., developing requirements for inputs. It ensures that quality, sustainability and reliability are maintained while procuring requirements. For instance, an organization that supplies a particular brand of coffee will source coffee beans from multiple locations and monitor every division to ensure that they offer only quality coffee to their customers.
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Supply Chain
It simply means the end-to-end process of transferring and storing supplies of finished and unfinished goods. For example, a car manufacturing organization will store and transfer automobiles (or their parts) in a systematic manner.
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Customer Service
It involves direct interaction with customers and is a type of service delivery. For example, e-commerce organizations like Amazon have a team of customer support executives who interact with customers about queries related to orders, cancellations and returns.
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Quality Assurance
The practice of measuring, monitoring and measuring quality is known as quality assurance. For example, someone in the food manufacturing industry will take additional measures to monitor quality and keep it in check.
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Distribution
It refers to the process of delivering your goods and/or services and reaching out to your customers. The supply chain extends to your customer base as well, as you deliver finished products. For example, a mobile phone store—where you directly take your finished product to the customer.
Why Is Operations Management Important?
Successful operations management is the glue that holds an organization together. If you want to compete in an ever-growing market, you need to ensure that you identify the primary elements necessary for a business’ survival. In addition to planning, directing and driving the manufacturing elements, there are other key benefits of successful operations management:
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Collaboration
Operations management strategies allow individuals to collaborate across all levels of organizations. Its cross-functionality encourages cooperation and teamwork, bringing different departments closer, helping them solve problems together. Collaboration makes room for communication and easy flow of information, making it easier for employees to be on the same page.
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Waste Reduction
It’s one of the key components of operations management. There are various ways in which you can identify and eliminate waste within manufacturing operations. It enables you to take measures against overproduction, loss of time and defective items. Elimination of wastes helps increase profits because you eliminate unnecessary costs, improving the overall production process. There isn’t any duplication of work as you monitor your operations more efficiently.
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Revenue Increase
Operations management involves identifying and optimizing your production process, eliminating waste and monitoring the quality of goods and/or services. Improved product quality leads to increased customer satisfaction, therefore enhancing your organization’s reputation in the market. This reputation is beneficial to attract more customers and improve sales; enabling the growth of your organization and increasing revenue.
Effective Strategies Of Operations Management
As we have already established, operations management encompasses various roles and functions. Operation managers shoulder the responsibility of carrying out these functions for a smooth-function of an organization. Managers need to be analytical, resourceful and skilled when overlooking various functions. Here are several operations management strategies that’ll help you execute your responsibilities and obligations in an effective manner:
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Leverage And Control Data
Data can be vast and difficult to manage in a big organization. Savvy operations managers find ways such as advanced systems and software to compare and analyze data. They depend on accurate data for planning, strategizing, marketing and decision-making. When you organize data, it’s easier to analyze and monitor results.
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Designing Process
The primary aim of an operations management system is to improve an organization’s bottom line i.e., the profit that an organization ultimately makes during a certain period of time. If you want positive results, you need to identify processes that can be repeated to maximize gains.
Operations managers identify processes that can save time, eliminate problems and improve productivity. To develop or improve your processes, you should identify what processes affect an employee’s productivity or efficiency. Create a well-defined plan that helps you tackle these issues. Execute your successful plan over and over again until it becomes routine.
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Forecasting And Goal-Setting
When you set goals, you provide your organization with a direction. Goal-setting also motivates employees to work toward particular targets. Forecasting helps you set expectations. You prepare your organization to face poor results, if any, in the long-run.
Goal-setting and forecasting are vital tools that propel businesses forward. It tells managers what they need to change and adapt to dynamic business conditions and industry demands. Although forecasting requires you to look at historical data and is time-consuming, there are various software that can make the process more time-efficient.
How To Be An Effective Operations Manager
An operations manager undertakes several responsibilities. Unlike other executive positions, the role of operations or production manager is quite complex. In addition to being cross-functional, an operations manager is involved in strategy development and execution. For successful operations management, you can adopt and employ these tactics:
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Keep Your Employees Looped In
Employees are the most valuable assets of your organization, which is why you need to communicate and set expectations that they can deliver on. Even when you provide someone with feedback, don’t just tell them what to do but tell them how they can improve their efficiency. Empower your employees and keep them in the loop when developing or changing strategies.
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Focus On Quality
A successful operations manager always prioritizes quality. In today’s competitive market, it’s difficult to respond to increasing demands and expectations. However, if you pay greater attention to the quality of your product or service, you will secure a longer product lifespan and better customer satisfaction. When you place emphasis on quality, your teams will be motivated to follow in your footsteps and drive quality improvement. This further provides a competitive edge to your product as well as motivates your organization to perform better.
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Lead, Don’t Manage
As an operations manager, you feel obligated to guide and motivate your teams so that they perform well and drive business success. As a result, you’re required to keep an eye on certain operations and you set up meetings with different department heads. There is a high chance of micromanaging and excessive monitoring of departmental activities.
A successful operations manager always leads, never manages. You have to trust your teams to do their work. Be present when someone struggles to meet performance goals and needs valuable feedback. Other times, just act as a guiding force that encourages teams to perform to the best of their abilities.
Conclusion
Strategy execution and implementation are the driving forces of a successful operations management system. Harappa Education’s Executing Solutions course will teach you everything from delegating responsibilities to monitoring progress. The Bifocal Approach, in particular, will help you monitor projects by balancing both short-term focus with a long-term view. You’ll learn how to manage expectations and navigate setbacks with confidence. So, what are you waiting for? Try out Harappa’s courses today!
Explore Harappa Diaries to learn more about topics related to the SOLVE Habit such as What is Project Management, Decision-Making, Problem-Solving & Root Cause Analysis to monitor projects effectively.
