The Role of Operations Management in Today’s Business World

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Introduction

Operations management refers to the design, operation and control of the transformation process that converts resources such as labor and raw materials in to finished goods and services that the customers purchase. Every organization produces something, as such, every unit in an organization also produces something. In today business world, every successful organization recognizes the important role of operations management in the organizational strategy to maintain and establish global leadership. This can be seen as more organizations move toward managing their operations from a value chain perspective that adds value at each stage of the transformation process from processing raw materials to finished goods.

The Role of Operations Management in today’s business world

Operations management focuses on carefully managing the processes to produce and distribute products and services that adds value to firms’ inputs to convert to profitable outputs. It is the art and science of management of people, process and systems for delivery of a useful product or service successfully to customers. Many organizations have come to realize that managing well theirs operations function is no less important than managing well finance and marketing. Also, they also realize that in order to effectively compete in a global market, they must have an operations strategy to support their mission and overall corporate strategy.

The concepts of efficiency and effectiveness of any organization revolve around the operations management. Managing operations is all about making the processes work right. Running the processes involves great degree of integration of organizational resources to get the product in the right place in the right way keeping in view the cost and time considerations. A successful example of excellent operations management is Amazon.com who keeps the lead in online retail and e-commerce market. Amazon’s strategic decisions of operations management become increasingly complex as the company continues to expand and diversify its business. Through continue improvements, Amazon enhances its capabilities in maintaining adequate support for operations despite global expansion and the broadening of its product mix.

There is no single innovation promises an ever-lasting competitive advantage for an organization. The secret to success lies in creating a robust competitive advantage which has its roots in the processes such as the process for using new technology, the process for utilizing resources, or the process of creating values. These can be achieved only and if only the operations are managed in a way that makes a difference and created differentiation right at the shop floor. This is what Toyota Motor Corporation is known for, its history is lined by continuous improvement in quality. From the founder of the company – Kiichiro, he has strongly emphasized the importance of operations management and quality control system. The Toyota Production System is based on the Lean manufacturing philosophy that seeks to minimize wastages and focus on cost reduction and the Toyota manufacturing philosophy emphasizes on quality management through a process of continuous improvement. The Lean manufacturing philosophy pioneered by Toyota has become a benchmark for all manufacturing companies around the world. This has helped Toyota in achieving low cost production and allowed them to manufacture high quality cars at lower costs.

Operations management supplements all other activities of an organization, such as R&D activity focuses on developing products that meet the customers’ needs, Finance department concerns with the cash flow, HR department’s task is to hire and manage employees. It is the Operations department which integrates all these functions by making the product according to the desire specifications within the given budget and utilize the best of capacity including labor, facility and machinery; which will make it easier for marketing people to target the market segment.

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