Understanding the Functions of Operation Management

operation management functions

Operations Management – Defined

Administering business practices to maximum efficiency within your company. This is a simple way to define operations management. The term encompasses planning, implementing, and administering the business operations and goods production in order to achieve specific business goals. 

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The goals can be to enhance business performance, higher profit outcomes, improve customer satisfaction, etc. In order to achieve these goals, the operations team will focus on balancing the company’s cost with its revenue by optimizing every aspect of business operations. Though each department acts individually, operations management is the heart of optimizing them. Moreover, technology plays an important role in the advancements of operations management. From self-maintaining smart machines to robotic automation, technology is limitless. 

So, companies that use technology well can thrive while those that don’t use it may not survive. The future of operations management might involve new ways of automation that will beat the conventional ways in which an organization functions.

Need for an Efficient Operations Management

You can consider operations management as the engine room which involves the planning and manufacturing of goods and services. Operations management is responsible for maximizing your business’s efficiency, profit, and performance which are vital for its growth and to gain a competitive edge. 

Most large businesses tend to invest huge amounts of money on their operations team and they always have a bigger budget owing to the big returns. The key aspects of successful operations management include:

  • Enhanced customer service
  • Product/service quality
  • Accurately functioning processes
  • Market competition
  • Technological advancement
  • Profitability and ROI

All these elements depend on how efficient your operations team is. In addition to this, companies focus on investing in operations teams for the following reasons:

  • In business, you make several decisions throughout the production process, and the operations department serves as a valuable link in connecting different departments. Therefore, they help in enhancing team collaboration which improves decision-making. This in turn increases the trust and relationship between your team members resulting in top-quality products for your customers. 
  • Another important part of the operations team is to allocate resources efficiently by building a proper budget. The operations team will try to reduce costs wherever possible, stretch the use of resources to fit the project needs and minimize resources going to waste. 
  • With a good operations team in place, achieving your business goals is just a walk in the park. When the project managers change the project objectives, the operations managers can see if it aligns with the overall business objectives which help in making big decisions. 
  • Finally, the operations team will keep the workplace organized and motivate team members. They make sure that all the departments have a functional working environment and help them overcome any obstacles, maintaining work balance between different departments.
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Essential Functions of Operations Management

Operations management is more than just managing resources – it is the final piece in the chain of command that drives your organization toward achieving your business goals. If you want to improve your company’s operations you should focus on how each department works and how efficiently your operations department manages them. The functions of operation management can be divided into the following key functions:

1. Production

Managing the production process involves how the resources are turned into goods and services. Production management is all about controlling the processes involved in the creation of the said goods and services. The processes include planning, monitoring, administering, and controlling the quality of resources and the final product. Operation managers are responsible for ensuring that the resources are used optimally and the quality standards are met. 

2. Finance

Finance plays an important role in any business. You will need a solid financial plan to ensure money is allocated to each department correctly and is utilized to the full extent. Therefore finance in operations helps to come up with a budget plan that helps the organization achieve its production goals and introduce better investment opportunities. Accounting for all the transactions helps achieve transparency and you can devise policies for data management and making financial reports. This helps you spend on important things and avoid spending on unnecessary resources.

3. Supply Chain

Supply chain as you know involves controlling the production process as the resources move from raw materials to finished goods. If your business doesn’t have a physical product then this operation can be skipped but knowing supply chain management is essential. The main purpose of operations in supply chain management is streamlining the products which results in increased customer value, better profit, and gain the competitive edge in the market. 

4. Forecasting

Operations managers do “demand forecasting” which is the process of predicting what products are in demand with the consumers and what they will need in the future. This helps businesses to identify both the current and future product needs of the consumers and tells them what product to produce. Ideally, the operations manager will make accurate predictions based on facts by analyzing past trends. They will communicate their predictions to different departments to be ready to make the right product at the right time, thus helping you make data-driven decisions for your sales and business growth. 

5. Inventory

This is another important aspect of operations management. You will know which resources to stock up on, and when you will need the stocks for the product to be produced in its scheduled time. Inventory management helps keep track of the stocks in your inventory which helps in fulfilling the orders in time and alert the department when the stocks need to be replenished. 

6. Quality Control

Quality control is a crucial stage in operations management as it involves legal and regulatory elements. After the production department produces the final product it goes through a series of quality checks before delivering it to the client. Operations managers should come up with a quality control plan to test the products and implement improvements. The plan should include a risk assessment, conducting controlled tests, collecting feedback, and documenting defects and how they are improved. The operations manager should ensure that the final revised product meets the quality standards. 

7. Product Design

These are the people from your creative team who are responsible for designing the products. However, the operations department acts as an eye and ear in gathering the necessary information for the product design. They help in identifying the marketing trends, and consumer behavior and offer direction to actually design the product. Without the operations department, your creative team will find it hard to gather market information as the market is ever-changing and requires extensive research. 

8. Strategy Planning

Planning strategies is a big part of operations management. These strategies help organizational heads make effective decisions that will help their businesses grow and figure out their vision for the future. These strategies can help redefine business goals and objectives. Also, strategic management helps keep tabs on how each department works, how resources are utilized, and how efficiency can be improved. 

9. BPM

Operational processes can also be called business processes. They are crucial to the company as they add value and help you stay ahead of your competitors. So, operations managers will need an efficient business process management tool like Cflow to further simplify their operations. Cflow is the best out there as it offers no-code automation and is completely cloud-based. It offers tons of functionality that doesn’t require extensive technical or coding knowledge for deployment. The business processes serve as internal links between departments and having a tool will help managers to manage them in a streamlined manner. 

10. HR

Finally, the human resources. This department helps in recruiting, deploying, and onboarding the right kind of people that can enhance business performance. The operations team will help in moderating the human resources and its activities.

Cflow – The Only Tool that You’ll Need

As said earlier Cflow is a workflow automation tool that helps in advanced planning and scheduling for managing your operations. This helps manage your customer demands, assort products, conduct market research, provide fast delivery, and enhance customer satisfaction. Cflow lets you automate all your business processes by:

  • Creating optimized schedules and automating them
  • Maximize efficiency by identifying bottlenecks
  • Synchronizing support and demand
  • Company-wide transparency and resource capacity
  • Enhance data-driven decision-making

Like what you see? Check out Cflow for more and sign up for a free demo. 

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