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Definition of Operations Management, Function and Scope

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At this time, all existing companies must have certain Operations Management or basics to create optimal output from various resources owned.

By having the basics of managing the company’s operations, of course, it can directly help to achieve your business goals.

In this article, I will try to explain a little about the definition of operations management, background, operational management concepts, etc.

With this discussion, it is hoped that it can help you to understand operational management.

Definition of Operations Management

Based on Wikipedia, the definition of operating management is a business area that has a focus on the production process and ensures the maintenance and development of the business run effectively and efficiently.

Operations management can be said to be a business function that is responsible for managing the process of making goods and services.

This business function can involve various management functions namely planning, organization, coordination, and control of the resources needed to produce goods or services.

Thus operations management is part of the management function that requires the management of people, equipment, technology, information and other resources needed in the production process.

Whatever type of business is carried out, operations management is the main function of every company whether it is manufacturing or seeking profit or not.

Operations management function for businesses

functions of operations management

For a small business, operations are very simple because everyone can take part in managing a business to achieve its goals.

But this is different from a business that has many employees, making the company’s operations complicated.

Of course, you will not be able to rely on employees to do the job properly.

Therefore you need a standard procedure so that all employees can work efficiently and effectively.

Here are some benefits of operating management:

Better output

With operations management, it can improve and optimize business processes so that they can compress products or services.

With this, of course, can produce better output with a small cost and a low level of risk.

Competitive advantage

With better output, it will certainly increase the possibility of your product or service having a competitive advantage.

Of course, this can make your business stand out from competitors, thereby increasing the chances of getting new customers.

Higher profit

By having better output and competitive advantages it can ultimately increase the company’s profits and profits.

Expertise needed in operations management

role of operation management

To run operations management, it takes some expertise or skills including:

1. Organizational ability.

Organizing processes in organizations require a set of skills from planning and prioritizing through execution to monitoring.

This ability together helps managers achieve productivity and efficiency.

2. Analytical ability/process understanding

The ability to understand processes in your area often includes a broad understanding of other functions as well.

Attention to detail often helps to be more in-depth in the analysis.

3. Process coordination

After the process is analyzed and understood, they can be optimized for maximum efficiency.

Fast decision making is a real advantage here, and a clear focus on problem-solving.

4. People’s skills

Lack of interaction with employees or members of senior management can seriously damage productivity.

So an operations manager must have the skills of people to navigate well fine lines with their peers.

Furthermore, clear communication about tasks and goals serves as a great motivation and provides goals for everyone.

5. Creativity

Again, problem-solving skills are very important for creative approaches if things don’t go in the right direction.

When they do, creativity helps find new ways to improve company performance.

6. Interest in technology

To understand and design processes in a time when operations are increasingly dependent on technology, interest in technology is a skill that cannot be underestimated.

Operations managers must be familiar with the technology most commonly used in their industry and have a deeper understanding of specific operating technologies in their organizations.

The scope of operations management activities

operations management examples

There are three major groups of activities carried out by operations management, which originate from planning or designing, organizing, and monitoring functions.

All activities involve considering assets, costs, and human resources, and are preceded by a thorough process analysis.


Before planning a process or designing a product, operations management must be busy analyzing the market to test demands.

If you provide promising results, such as a niche to target or a new product or service to develop, you can start planning.

In many cases, planning involves designing new products, from the initial concept to the actual launch, with several testing phases involved.

During planning, you must consider technical and business requirements. Sometimes the process needs to be updated: designing new supply chains or other logistics processes.

If your product is a service, process design aims at various customer requirements and levels of contact.

Again in other cases, it’s about new facilities: your company decides to expand its operations, and you must decide the location of the facility, its capacity, and its layout.

Plans must always support business objectives: they focus when considering costs and finding the best suitable quality and capacity, or calculating inventories and human workforce needs.

Therefore, it is important to set the right steps in the planning stage, to find out whether the actual performance meets them, or there is a need for adjustments.

Capacity is one of these sizes, such as product quality, or delivery time. Initial numbers are usually estimates based on a previous market analysis.

Management / Organization

So, you have facilities for production, your product design is ready, and so will the way it is produced: what materials and human resources, how much it costs, with what workflow.

This is a solid initial base to maximize the efficiency of your operations.

However, you will need constant and competent management to correct accidental mistakes in planning, to adjust production by changing costs or regulations, and keeping them efficient at various levels.

The operations manager selects and schedules the process for optimal results and does the same with materials for ideal quality and capacity.

Organizing equipment maintenance is also part of quality management activities. Furthermore, inventory and the entire supply chain must be managed in order to produce more efficiently.

As in all management functions, human resource management is an important activity.

In operations management, planning the actual level of work can have a large impact on whether an organization can operate effectively.

Fix it

There is always room for improvement when it comes to the process used, the quality and capacity achieved, or as far as inventory levels and human resources are concerned.

Many operations management tasks, therefore, come from this need, and this is where long-term planning steps.

But remember, changes made according to this plan are only as good as the improvements they bring in business.

A better way to forecast demand makes you closer to improving the process because cost savings and delivery times occur.

The quality of a product will be higher if you have set Total Quality Control and assess operational risk correctly.

Inventory control account for better inventory usage. With manufacturing, the capacity problem can be solved.

Collaboration is a general strategy that you can use to increase the effectiveness of your human resources.


Such is the discussion of the Definition of Operations Management, Function and Scope.

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