25 Functions of Operations Management

Operations management is the direction and control of the core business processes of an organization. Operations includes everything an organization does to create value. This includes the production of products and delivery of services to customers. The following are basic examples of an operations management practice.

Asset Management Managing operations assets such as infrastructure in a data center.	Capacity Planning Planning to meet future demand for resources such as production equipment.
Capacity Utilization The process of using capital and labor efficiently.	Distribution Planning Planning the delivery of goods to distribution partners and customers.
Facility Management Managing operations facilities such as factories, data centers or fulfillment centers.	Financial Management Planning and controlling budgets and analysis of financial performance such as profit & loss.
Forecasting Forecasting demand for products and services to plan to meet it.	Health & Safety Managing health and safety risks and compliance to related standards and regulations.
Incident Management Quickly resolving production issues including workarounds.	Inventory Management Managing inventory to meet demand and control cost.
Operations Planning Planning to meet operations goals in a period of time, usually a year.	Operations Reporting Measuring and reporting operations performance, quality and efficiency metrics.
Operations Strategy Planning to meet long term operations goals in areas such as production levels, quality, cost and efficiency.	Performance Management Monitoring and optimizing daily performance such as productivity and efficiency metrics.
Problem Management Addressing the root cause of production issues.	Process Improvement Measuring operations processes, optimizing and measuring again.
Process Re-engineering Restructuring and redesigning operations processes.	Procurement The process of acquiring capital equipment, inputs and services for use in operations.
Production Management The process of executing and monitoring operational processes to produce goods or services.	Production Scheduling Determining the timing and sequencing of operations.
Quality Assurance The end-to-end process of meeting quality standards and customer expectations for quality.	Quality Control The specific process of testing to make sure products and services conform to specifications.
Sales & Operations Planning Coordinating production with marketing e.g. increasing production volumes to support a marketing campaign.	Supply Chain Management Managing the movement of components, parts, materials and finished goods across supply chains.
Vendor Management Managing vendors and suppliers.

Notes

Operations generates a firm's revenue and often consumes most of a firm's costs. As such, operations strategy is an primary element of corporate strategy alongside marketing and sales. Operations strategy includes the capital investments required to support business growth and to sustain revenue. It is also common to plan improvements to key operating metrics in areas such as efficiency, productivity and quality.

Mature firms have heavily optimized operations processes that are well understood and extensively measured. This drives efficiencies such as low unit costs that represent competitive advantages.

Operations produces a firm's products and services. As such, operations management is often concerned with quality control and quality assurance. Quality control ensures that products and services conform to specifications. Quality assurance investigates and addresses the root cause of quality problems.

Operations is often extensively automated and measured with information technology. In many industries, information technology is considered an operations function. This may involve delivering systems and applications for non-operations teams such as marketing, sales, human resources and accounting.

Operations is primarily concerned with the day-to-day value creation of a business. This is organized into repeatable processes and practices that are continually monitored, measured and improved.

Overview: Operations Management
Type	Operations
Definition (1)	The direction and control of the core business processes of an organization.
Definition (2)	Management of processes that produce products and deliver services.
Related Concepts	Operations » Root Cause » Efficiency » Productivity » Quality » Unit Cost »

25 Functions of Operations Management

Notes

Operations Management

Capacity Management

Operations Planning

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