What is operations management?
Operations management deals with integrating business processes within organisations. It consists of the managerial activities and techniques used to transform resources such as raw materials and labour, into end products and services. (Adam and Ebert, 1989). It applies to all organisations, not just manufacturers as some people may think.
Some organisations produce products e.g. Apple produces smart phones, computers etc. On the other hand, some others produce services. For example, British Airways, Travelodge, Premier Inn, colleges and universities produce services. However, both types of organisations face similar operational challenges (Plunkett & Attner, 1994). For example, each is concerned with converting resources into something that they can sell to their customers.
Importance of operations management
Understanding operations management is important for both managers and the students of business management. Operations management deals with both services and manufacturing. It also deals with ensuring productivity with quality. If productivity is high with no compromise with quality, it should help organisations secure good profits. They can then use the profits for further organisational development.
Operations management is important from a strategic perspective as well. Organisations have a number of activities which can be seen as a value chain. Organisations can create value in any or all of the value chain activities. They can do so from beginning the process of raw materials and coming to an end of the process with a final product/service. Operations management can play a strategic role by helping an organisation gain competitive advantage through value chain activities. It is worth mentioning that Michael Porter developed the value chain analysis in 1985.
Operations management ensures that business processes within the organisations are working just right. Business process is a set of activities which are mostly integrated with each other to produce the right product for organisations. Operations itself is a business activity which impacts on and is impacted by other business activities e.g. marketing, human resources management, finance and so on.
In a nutshell, operations management is an important subject in business management. It is a subject of management tools and information which should help readers become the best manager possible. It plays a vital role in the success of organizations.
The article publication date: 14 December 2016
Plunkett, W., & Attner, R. (1994), Introduction to Management, 5th Edition, International Thomson Publishing
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Author: M Rahman
M Rahman writes extensively online with an emphasis on business management and marketing. He is a graduate of both Leeds Metropolitan University and London South Bank University.