Description

What is Operations Management?

Every business is managed through three major functions: finance, marketing, and operations management. The vice presidents of each of these functions report directly to the president or CEO of the company. Other business functions—such as accounting, purchasing, human resources, and engineering—support these three major functions. Finance is the function responsible for managing cash flow, current assets, and capital investments. Marketing is responsible for sales, generating customer demand, and understanding customer wants and needs. Most of us have some idea of what finance and marketing are about, but what does operations management do?

Operations Management (OM)
Is the business function that plans, organizes, coordinates, and controls the resources needed to produce a company’s goods and services. Operations management is a management function. It involves managing people, equipment, technology, information, and many other resources. Operations management is the central core function of every company. This is true whether the company is large or small, provides a physical good or a service, is for-profit or not-for-profit. Every company has an operations management function. Actually, all the other organizational functions are there primarily to support the operations function. Without operations, there would be no goods or services to sell. Consider a retailer such as The Gap, which sells casual apparel. The marketing function provides promotions for the merchandise, and the finance function provides the needed capital. It is the operations function, however, that plans and coordinates all the resources needed to design, produce, and deliver the merchandise to the various retail locations. Without operations, there would be no goods or services to sell to customers.

What is Process Management?

All operations are composed of processes. A process is an arrangement of resources and activities that transform inputs into outputs that satisfy customer needs (Slack et.al 2015). The difference between operations and process is mainly the scale and complexity of the given tasks. For example, Banking operations can consist of financial management processes and Hotel operations contains guest service processes. Hence one operation function can be made up of several individual processes. Slack et.al (2015) suggest that all parts of the business manage processes so all parts of the business have an operational role and need to understand operational management.