What is Operations Management? The Be-all and end-all of Every Business

The main aim of a business is to sell goods or provide services. It is essential for companies to ensure that they provide the best quality goods or services This will provide a steady flow of business and increase sales and profits. Hence maintaining quality is the core of any business. This is where operations management comes in. Not only for small companies but also for big businesses it forms an integral part. Operations management is the management of all processes from scratch to the end. It starts with production and goes way beyond making sales and profits. It ensures that the day-day activities are carried on effectively. The final goal of operations management is to maintain the best standards for products or services. Hence it is rightly the core of any business.

Why Is Operations Management Considered Important?

For any business to succeed it takes a lot of time and effort. It is essential for the company to make profits. Profits not only help the business to survive but also thrive amidst competition. The foremost thing to be kept in mind is the efficiency of operations. The company must manage all its processes, resources, and equipment well. Along with profit, they must ensure their business does no harm to society. So operations management is considered an integral aspect of the business. The importance of operations management does not vary from business to business. It is the same for all companies. In fact, effective operations management is beneficial to the company as a whole. If companies do not operate effectively it could lead to loss or close down. Hence the importance of operations management can not be ignored.

Operations Management

The Work Involved in Operations Management

Operations Management involves all processes from buying raw materials to manufacturing, and sale of finished products. The main focus of operations management is maintaining efficiency. In addition, it also ensures increased sales and profits.

  • Buying raw materials.
  • Purchase of equipment.
  • Physical locations of factories and offices.
  • Maintenance of equipment and office premises.
  • Payment of salary.
  • Maintaining proper accounts.
  • Ensuring regular audits.
  • Co-ordinating with departments
  • Providing separate goals to each department
  • Balancing expenses and profits
  • Making policies
  • Creating clear-cut strategies and campaigns
  • Focussing on production
  • Analyzing the logistics required
  • Control over the entire operations
  • Keep a tab on day-to-day activities
  • Regular plans for improvements
  • Steps to bring about a change where and when required.
  • Steer all actions toward quality and profitability.
  • Emphasize customer satisfaction.
  • Reduction of cost of production
  • Increased revenues and sales.
  • Not only hiring but also managing human resources.
  • Employee rewards and motivation.
  • Making not only long-term but also short-term plans.
  • Managing and analyzing data.
  • Performance appraisals at regular intervals.
  • Understanding competition.
  • Understand Government policies and rules that could affect business.
  • Following industrial rules and laws.
  • Ensuring the business does no harm to the environment and society.

Diverse Roles of Operations Management

The importance of operations management given in a business can be analyzed through customer satisfaction and profits. In fact, operation management includes diverse roles and responsibilities.

Importance of Operations Management

1. Proper planning and future forecasting

The operations manager plans the total number of goods or the quality of services that need to be provided. This analysis is done keeping in mind the capacity of the business. This is the main role of the manager. Only after this evaluation, the business starts the manufacturing process. So, here lies the importance of operations management.  The operations manager should have the ability to understand the future needs of the customers. Based on this analysis the manager can buy raw materials. He also needs to analyze the manpower and other resources. The resources should be capable of handling the increased production of goods. The evaluation of the present and future will have an impact on the business.

2. Focus on Quality And Not Quantity

The primary purpose of any business should be to provide quality products. A satisfied customer will not only be loyal. In addition, the customer will also spread the word to others. The importance of operations management lies in checking the quality at each step. It should not only meet the customer needs but also meet Government standards. Inferior products will certainly lead to profit. But in the long run, the business will have to shut down. The product must not only meet the quality standards. Hence the focus is more on quality than quantity.

3. New Ideas And Innovations

Today due to technology the market is evolving. Hence there is a need to bring about innovations. In fact, change is the only constant. The importance of operations management lies in creating new ideas. The operations management should keep in mind the vision of the company before implementing new ideas. They have to consider cost and quality while bringing about innovations in the business. Over a period of time, some products could get obsolete. That’s when the operations management should be adept to make changes. In fact, if this is not done the business would stop making profits. And in the long run, they might have to be shut down. The operations management should keep a constant tab on the market conditions. They need to analyze not only the needs but also the trends in the market.

Planning in Operations Management

4. Process Improvement And Optimization

Over a period of time, the business processes could get obsolete. The importance of operations management lies in redesigning processes. In fact, it must be changed keeping in mind the finances of the business. The process should not only be cost-effective but should also efficient. The operations managers need to keep doing these changes from time to time. The changes must adapt to new technology and innovations. All in all, the new changes should bring about the best use of resources. In addition, the new processes must be documented. It must also be communicated to people in the organization. The work of operations management does not stop here. In fact, they need to keep evaluating the performance of the new processes. They must do this at regular intervals. This will help them decide whether they need to continue or they need to make changes.

5. Supply Chain Management

The importance of operation management lies in the management of supply chain management. It includes all processes, from buying raw materials to converting them into finished products. This helps not only reduce the cost but also deliver quality products to consumers. An operations manager needs a proper understanding of the supply and demand in the market. In fact, this helps a company to increase sales and make profits. The manager controls all activities centrally. But the work is delegated down the line. Proper planning, sourcing, manufacturing, and delivery is the key to good supply chain management. In some cases, the customer returns the product. This needs to be taken care of. He or she must ensure that this does not happen often. Customer dissatisfaction would have a negative effect on the business. Supply chain management is different for different companies.

The 5 P’s of Operations Management

  • Planning
  • Production process
  • People
  • Profits and
  • Possessions
Importance of Operations Management

Operation Management Systems

It uses four theories to help them function effectively. 

  • The Process Redesign

The focus here is on understanding and laying out different workflows. In fact, the main aim is to relook at the old methods used. The importance of operations management lies in making changes when needed. In addition, new processes have to be made. It has to start from the ground level. And moves smoothly all the way up. The company can assess these process redesign. However, this is based on market feedback.

  • Change in the Manufacturing Systems

This involves a complete change in the hardware and software of the company. Moreover, it also involves a change in the structure. This enables a business to increase the number of units manufactured. In addition, this helps to assess the performance of the business. The use of technology reduces the time taken to make changes.

  • Six Sigma

This is a method that uses statistics and data. It is used to analyze and reduce errors. In fact, this helps to reduce manufacturing defects. Hence it reduces the cost of production. In fact, Six Sigma is the certification of quality. In addition, this method increases the profits and sales of a company. The importance of operations management lies in the proper usage of Six Sigma. This quality control process improves the efficiency of businesses. However, the work of putting this tool into practice rests with operations management.

  • Lean Manufacturing

Operations Management uses this method to remove waste. In fact, this helps to curb unnecessary usage of resources. Moreover, this leads to a reduction in the cost of products. In fact, it is a production method that aims at optimizing production.

The Scope of Operations Management

It is a vast field that covers all aspects of a business. Moreover, it ensures the smooth functioning of the business. In fact, it forms the core of any business. The importance of operations management is more important in the competitive environment. It is used in all sectors of society like banking, healthcare, finance, retail marketing, manufacturing, etc. Hence there will always be a demand for operations managers. The future of operations management looks bright. In fact, it is one of the best go-to careers in the industry. The business may be big or small, public or private, operations management is the most significant part of running it. Hence the scope is broad and diverse. There are many opportunities a professional can choose from.

Marketing Strategy

Importance of Operations Management in Customer Service

There are methods a company uses to conduct business. In fact, this is directly related to the customer service it provides. When a company provides top-quality products the customer is satisfied. In fact, the customer will keep coming back to the same company. Hence the company develops brand loyalty. If the company sells inferior quality products then the customer will stop using that product. He or she will buy it from the company’s competitor. The customer expects to buy quality products at a reasonable price. They feel happy when the company maintains standards. The management needs to have information regarding their customers. In fact, they must know the feedback received from the customers. They must ensure that the complaints are taken care of. Effective operations management is the need of the hour. All in all, operations management helps the company meet customer expectations.

Importance of Operations Management in Production

1. Increase in Profits

The operations management takes care of the smooth running of all processes. In fact, this leads to an increase in sales and profits. Moreover, new ideas and innovations help increase the goods produced. The operations manager analyses the revenue and expenses of the company. He keeps manufacturing defects to a rare minimum. All this leads to an increase in revenues for the company. When the company makes profits new avenues of business can be looked into.

2. A Competitive Edge

A company has to face internal and external challenges. An operations manager has to ensure the company meets all internal regulations. The business must produce quality products. The products must also meet customer expectations. Pricing and quality are two important benchmarks. In fact, these two aspects not only help stay ahead but also helps beat the competition. However, the main focus of operations management is to balance revenues and expenses. Though not impossible it is a difficult task.

3. Quality of Products Manufactured

The operations management has to ensure the product is of the best quality. It starts with the buying of quality raw materials. It goes on with the storage of raw materials. And ends with the production process. In order to produce quality products care must be taken at each and every level of handling raw materials. In fact, along with quality assurance, operations management helps minimize damages and losses.

4. Compliance with Governmental Regulations

The government has laid down certain rules in the field of manufacturing. Each department ensures that these rules are followed. If this is not done then the government levies fines. And sometimes even cancels the license of companies.

5. Teamwork

Manufacturing units have different departments. They work together to manufacture quality products. All departments must coordinate with each other. Only then the company’s goals can be achieved. The final goal of any department is the manufacture of the given units in a given time. However, they must give special attention to quality. This is again the work of operations management. They instill teamwork and team spirit among the employees.

Balancing revenues and expenses

Skills Required for Operations Management

  • An ability to lead a team
  • Organizing and development
  • Effective communication 
  • Managing people
  • Problem-solving
  • Management of various projects
  • Financial analysis
  • In-depth knowledge of the business
  • An eye for delta
  • Decision making
  • Time management
  • Discipline

Eligibility Criteria for Operations Management Professionals

  • Bachelor’s Degree

If you are looking for a career in operations management then a degree in finance, business administration, economics, finance, or law is a must.

  • Master’s Degree

If you are aiming at a senior position then an MBA would be the requirement. MBA covers subjects like finance, marketing, logistics, and management. Hence, this is considered apt for the job.

  • Experience

Experience working in a managerial position is an added advantage. This helps to take on a senior position. However, this depends on the number of years of experience.

  • Certification Courses

Aspirants can do short-term certification courses. In fact, this helps to increase job prospects. Moreover, they can do these courses after their undergraduate education. There are two levels in the course- basic and advanced. 


All in all, I have tried my best to explain what is operations management. These days operations management has emerged as the go-to career. It is in great demand. However, there is a huge gap in demand and supply. This gap seems to be a great opportunity. Especially, for aspirants who dream about a stable and lucrative career. Every business, both big and small needs operations management. Hence the opportunity to grow and learn is huge. Having said that, it is necessary that an aspirant needs to keep updating his knowledge. In fact, this helps to be aware of the changes in the market.

Recommended Reads

  1. 10 Benefits of Six-Sigma Skill in Operations Management in 2022
  2. 25 Common Interview Questions for A Business Operations Manager in 2022
Q1. Is operations management used in service industries?

Ans. Operations management is used in all kinds of industries be it manufacturing or service related.

Q2. Can I work in operations management without being a graduate?

Ans. Yes, you can. You can do a certification course in operations management to work in that field

Q3. Will operations management become obsolete in the near future?

Ans. Operations management shows an upward curve. The future looks bright and positive. It will certainly not become obsolete.

Q4. If I start at the entry-level, is it easy to go up the ladder in the field of operations management?

Ans. Nothing comes easy. One must keep updating his or her skills to meet the demands of the market. Having said that, with the right knowledge and with experience one can dream of going up the ladder.

Q5. Is a career in Operations Management stable?

Ans. Yes, since it is the core function of every business. It is stable. As it is evolving it tends to grow rapidly over the years.

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