Why Every Business Needs Operations Management in 2024

Every business runs on processes, and every process needs to be efficient. That’s where operations management steps in! Both public and private companies count on operations management to keep everything running smoothly and, importantly, within budget. So, what exactly does operations management do? So, what skills do you need to rock it as a high-performing operations manager in today’s business world?

In this article, I’ll dive into what operations management is all about, why it’s super important for businesses of all sizes, and how you can thrive as an operations manager.

Key Points

• Operations management is the process of crafting and implementing business strategies that enhance productivity and ensure smooth business operations across various departments.
• It improves customer satisfaction, reduces costs, ensures top-notch quality, and boosts revenue through efficient processes and technology use.
• Key factors of operations management include cost, quality, speed, and flexibility, which help businesses stay competitive and efficient.
• Essential skills for an operations manager include organization, coordination, technology proficiency, social skills, and time management.

What is Operations Management?

Operations management is all about crafting and implementing business strategies that boost information flow and productivity to the max. Think about what an operations manager does on the factory floor. That person’s role is to check out the materials, equipment, and team, figuring out the best way to get the company’s goods or services into the hands of customers.

Project management is like a well-planned journey with a start and finish, while operations management is more like a never-ending road trip, keeping an eye on everything that’s happening day in and day out, always checking what’s cruising smoothly and what needs a little tune-up.

Why Is Operations Management Important?

Let’s take a look at the importance of having an operations management in a business:

#1. Boosts Customer Happiness

It’s easy to assume that keeping customers happy is all on the marketing and sales teams. The biggest player in boosting customer satisfaction? First call resolution (FCR) – it’s a game changer!

First call resolution is a measure of how well you can tackle your customers’ issues right after the first chat. Boosting FCR rates comes down to giving your customer-facing team the right data when they need it. Boosting your customer experience is as simple as this: for every 1% you improve your FCR processes, you’ll see a 1% enhancement in the overall experience, thanks to automation and real-time guidance. Easy peasy!

#2. Slashes Expenses

Most businesses, particularly SMEs, have limited resources and need to make the most of their budget, technology, materials, and finances. Operations management teams can cut costs by jumping on the tech bandwagon.

Digital tech can cut down on travel expenses and boost remote teams, slashing costs for office space and travel. These platforms can identify risky tasks and processes while cutting down on health and safety expenses.

The operations management teams can streamline processes by cutting out activities that don’t contribute any value. Finally, an operations team should use systems that reveal which services or products yield the best returns.

#3. Guarantees Top-Notch Quality

Operations management boosts product quality by keeping an eye on production and making improvements. Plus, they have a top-notch quality control system that follows regulations and keeps customers happy while maintaining a solid product reputation.

They’ll spot any flaws and make sure they’re fixed up. Next, they’ll whip up standard operating procedures for every production process and make sure all production teams can get to them. They’ll keep an eye on these processes, spotting any hiccups and boosting employee know-how with training and feedback loops.

#4. Boosts income

On top of that, businesses that can take action are quick on their feet and flexible. Shared data workflows are all about scaling up on demand, just like that! Easy peasy! They ought to distribute it throughout the organization without adding extra hardware performance issues and expenses.

Your business will see a boost in productivity and get products or services delivered right on time. Happy customers mean more sales and cash flow for the business! Take Nestlé, for example. Their move to digitize operations has led to a steady operating profit margin of 17% and an earnings-per-share margin ranging from 6% to 10%.

What Are the Key Factors of Operations Management?

Your operational strategy kicks off with some key players—think of them as competitive priorities or performance objectives.

Here are the key factors:

• Cost: Keeping an eye on production, labor, and other operating expenses to ensure your prices stay reasonable while still making a profit.
• Quality: Quality means providing top-notch goods or services and continuously enhancing products.
• Speed: Getting products delivered on time and finding ways to speed up the process without sacrificing cost or quality.
• Flexibility: Staying on your toes with market changes and swiftly adjusting to keep pace with a competitor who rolls out a quicker process.

Responsibilities in Operations Management

Operations management is a layered process that looks at the overall picture, but some layers might steal the spotlight more than others, depending on your business or product. For instance, if you’re an operations manager at an online travel company that focuses on booking rooms, your approach to the supply chain will be quite different from that of a company producing energy bars.

Check out these four key functions of operations management:

#1. Strategy

When crafting a strategy for your organization, you’ll dive deep into data and information to figure out the best way to hit your goals. When you’re planning your strategy sessions, keep in mind a few key things: the size of your team, your budget, how your supply chain is set up, and your timeline.

As an operations manager, you might find yourself tackling these strategic tasks:

Breaking down data to uncover the core principles, reasons, or facts is what analysis is all about!

Figuring out the measurable traits of products, events, or info—like sizes, distances, and amounts—while also assessing the time, costs, resources, or materials required to get a job done.

Coordinating activities like sales promotions that need teamwork with other department managers.

Creating or rolling out product marketing strategies, like ad campaigns or sales promotions.

#2. Forecasting

Forecasting is all about predicting your organization’s financial future. First, figure out your current cash flow. Next, estimate what you’ll rake in from selling your product. Don’t forget to consider how things like inflation, consumer demand, and tech upgrades will shake up your budget and profits down the line.

As an operations manager, you might find yourself juggling these forecasting tasks:

• Checking out financial statements, sales reports, or performance data to see how well goals are being met, spot areas for cost cuts, or find ways to improve programs.
• Managing or organizing financial or budget tasks to support operations, boost investments, or enhance efficiency.
• Determining prices or credit terms for products or services by predicting how much customers will want them.

#3. Supply Chain Management

Supply chain management is a lot like operations management since both are about keeping an eye on processes within the organization. So, as we’ve chatted about, operations management takes a bird’s-eye view of the company, aiming for overall efficiency, while supply chain management zooms in on the nitty-gritty processes that transform raw materials into the finished product.

Consider a company that grows fruit and sends it straight from the farm to your local grocery store. Supply chain management includes steps like harvesting the crops, cleaning them up, packaging them nicely, and loading them onto trucks.

Operations managers play a key role in supply chain management, and their responsibilities include:

• Managing and organizing the actions of companies or teams focused on producing, pricing, selling, or distributing products.
• Keeping track of how goods flow in and out of production facilities to make sure everything runs smoothly, effectively, and sustainably.
• Keep an eye on suppliers to make sure they deliver the goods or services we need, all while sticking to the budget!

#4. Quality Control

Operations management is all about finding the quickest, safest, and most budget-friendly ways to keep your customers happy, which is why quality control is essential. You’re not just figuring out if your business processes are running smoothly; you’re also keeping a close eye on your own product. Is it up to your brand’s standards? Is it living up to what customers expect? Is it top-notch?

Every day, operations managers are firing off questions like these, and when it comes to quality control, their responsibilities might include:

• Checking out equipment, structures, or materials to figure out what’s causing errors or other issues or flaws.
• Keeping an eye on and checking out info from processes, materials, events, or the environment to spot or evaluate issues.
• Figuring out if events or processes are following the rules, laws, and standards by using the right info and your own judgment.
• Evaluating the worth and significance of things, services, and even individuals
• Dealing with complaints, sorting out disputes, and smoothing over grievances and conflicts, or just negotiating with others.

Ideal Skills of an Operations Manager

Operations management is a bit different from marketing or finance. While those departments have managers focused solely on their areas, operations managers juggle responsibilities across various disciplines, making it a cross-department role. For an operations manager to hit the jackpot, they need to have these skills in their toolkit:

#1. Getting Organized

Organizational abilities are all about an operations manager’s knack for juggling various projects while keeping distractions from all those processes at bay. The operations manager needs to plan, execute, and keep an eye on every project from start to finish without getting sidetracked.

If a manager is disorganized, tasks will stack up, important documents will vanish, and a lot of time will be wasted searching for lost papers that could have been easily found with a little organization. Great organizational skills can boost productivity and help managers save time.

#2. Coordination

An operations manager should be a pro at coordinating resources, activities, and time to make sure everything runs smoothly and aligns with the organization’s goals. Coordination is all about juggling specific tasks at the same time and smoothly transitioning between them. It’s all about handling interruptions, tackling obstacles, and managing crises, then smoothly getting back to the usual routine to keep those interruptions at bay.

#3. Social Savvy

Being an operations manager is all about working with people. This means they need to connect with employees, outside stakeholders, and fellow senior managers. An operations manager needs to master the art of balancing relationships with colleagues by honing their communication, listening skills, and ability to connect on both professional and personal levels.

With a mix of cultures in the workplace, it’s essential for the operations manager to embrace tolerance and understanding towards everyone. The manager needs to handle conflicts and smooth over disputes between employees and senior staff members.

#4. Good with technology

In today’s fast-paced tech world, an operations manager really needs to be tech-savvy to create processes that are efficient and meet all the tech standards. Today’s organizations are leaning more on technology to snag that edge over the competition.

So, it’s time for those manual processes, like procurement, to step into the fast lane with some snazzy automation! If an operations manager keeps up with the latest tech trends, they can leverage those innovations to streamline internal processes.

#5. Convincing others

For leaders, mastering the art of persuasion is a must-have skill to rally others around your vision for the company.

#6. Managing your time

We’re circling back to speed being a top performance goal. Operations managers are pros at juggling their time while setting up smooth processes that keep everything moving just right.

Conclusion

Operations management (OM) is all about figuring out the best ways to run a business smoothly to boost efficiency and, ultimately, profits. Operations managers use organization and productivity to hit their main goals.

Making the most of resources like staff, materials, equipment, and technology is crucial for a smooth OM process and, ultimately, the company’s success.

Related Articles

• SALES OPERATIONS: Definition, Strategy, Management
• BUSINESS OPERATIONS: Definition, Examples, And Management

References

• uagc
• corporatefinanceinstitute
• sweetprocess.