Operational management is very important to the success of a business because it ensures all functions within the organization work together properly and efficiently. Since operations management plays such an important role in a business, you need to know a complete explanation of operations management so you can apply it to your business! Read more below.
What is Operational Management
This is the process of planning, organizing, leading and controlling the resources involved in the business operations of an organization. The goal is to achieve efficiency, effectiveness and sustainability in managing the organization’s operations.
Of course, in order to produce products or services with good quality and at the right time. In operational management, various factors are taken into account, including human resources, technology, business processes, and financial aspects.
The initial stage is planning. At this stage, management must make a clear and detailed plan to achieve business goals. The plan must include the resources needed, the time needed, and the performance targets to be achieved.
After planning, management must arrange the necessary resources to be able to execute the plan. At this stage, management pays attention to aspects such as duties and responsibilities, organizational structure, and business processes.
The next stage is implementation and control. At this stage, management ensures that business operations run according to the plans that have been made.
Management also monitors and controls operational performance to ensure that all objectives have been achieved effectively. At this stage, management can also determine the changes that need to be made in operational processes.
The goal is to achieve better business goals in the future. Therefore, operational management is a continuous process in managing business operations in order to maximize business efficiency and effectiveness.
Benefits of Operational Management for Business
Operational management provides many benefits in business, both for small and large companies. Some of the benefits of operational management in business include:
1. Increase Operational Efficiency
Operational management helps optimize business processes and eliminate unproductive or unnecessary activities. By continuously evaluating, management can identify areas that need improvement or improvement.
Thus, it can improve operational efficiency. This can reduce production costs and increase business profits.
2. Improving Product or Service Quality
In operational management, management continuously monitors the quality of products or services produced by the company. By identifying and correcting quality-related problems, companies can improve the quality of the products or services they produce. This can help companies win the competition and gain customer trust.
3. Increasing Customer Satisfaction
Operational management can help companies provide the best service to customers. By improving product or service quality and ensuring timely delivery, companies can improve customer satisfaction. This can help companies retain existing customers and attract new customers.
4. Minimizing Risk
Operational management can also help identify business risks and take precautions to avoid losses or failures. By paying attention to quality, security and compliance aspects, companies can minimize risk and maintain a good business reputation.
Thus, operational management can help companies achieve their business goals more effectively and efficiently. Companies that implement good operational management can produce better quality products or services, reduce production costs, increase profits, and maintain customer loyalty.
Examples of Operations Management
Operations management is the process of planning, organizing, and controlling operational resources and activities within an organization to achieve strategic goals. Some examples of operational management are as follows:
1. Inventory Management
Inventory management is an important part of operational management in businesses that sell physical products. This involves managing the amount of goods in the warehouse, avoiding overstocking or understocking, and reducing inventory holding costs. In operational management, inventory is managed using appropriate techniques and methods, such as Just-In-Time (JIT) and Lean Management.
2. Production Management
Operational management also includes production management. This involves ensuring that the production process runs efficiently and effectively. This includes managing production lines, managing production time, and optimizing production processes to make them faster, cheaper and of higher quality.
3. Quality Management
Quality management is an important part of operational management in business. This involves managing the quality of the product or service provided to the customer. Quality management includes the implementation of quality standards, inspection, testing and process improvement to ensure that the products or services produced comply with established standards.
4. Logistics Management
Logistics management includes managing the movement of goods, from ordering to delivery to customers. This involves supply chain management, transportation and warehouse management. In operations management, logistics management is carried out by ensuring that goods are always available and received by customers on time.
5. Manpower Management
Operations management also involves managing the workforce. This involves managing the workforce, scheduling work, training, and supervising employees to ensure that work is done efficiently and effectively.
6. Financial Management
Operations management also involves financial management. This includes managing operational expenses, controlling costs, and managing finances in day-to-day operations.
Those are some examples that are often applied in business. Every organization has different needs and processes, so operational management can be tailored to the specific needs of the organization.
Scope of Operational Management
The scope of this includes various processes and activities related to the production and delivery of products or services. The following is a detailed description of the scope of operational management:
1. Production Planning
Production planning includes activities to plan the amount and type of product to be produced within a certain period of time. This includes estimating the need for raw materials, production capacity, and allocation of production resources.
2. Production Control
Production control includes processes to ensure that production goes according to plan. This includes supervising production operations and identifying production problems and solving them.
3. Inventory Management
Inventory management involves managing the inventory of raw materials, semi-finished products, and finished products held in warehouses or other storage locations. This includes managing the amount of inventory, setting the inventory rotation rate, and controlling inventory costs.
4. Quality Control
Quality control includes processes to ensure that products or services produced meet established quality standards. This includes product or service inspection, quality testing, and quality problem identification and resolution.
5. Delivery Management
Delivery management includes managing the delivery of products or services to customers. This includes product delivery arrangements, delivery schedule arrangements, and logistics arrangements for delivering products.
6. Cost Management
Cost management includes controlling the costs, including production costs, inventory costs, shipping costs, and human resource management costs. This includes setting budgets, controlling costs, and optimizing the use of resources.
7. Workforce Management
Workforce management includes the management of employees within the organization, including setting work schedules, training employees, and supervising employees. This includes managing the workforce, controlling employee performance, and solving employee-related issues.
8. Environmental Management
Environmental management includes activities to ensure that the company’s operations are within safe and environmentally sustainable limits. This includes waste management, emission reduction, and efficient use of energy.
Those are some examples of the scope of operational management related to various activities in the production and delivery of products or services. Companies can manage their operations effectively by implementing proper operational management and meeting needs.
Operations management is an important aspect of every business to help ensure all functions within the organization work together to achieve company goals. This requires strong leadership, clear communication, and a focus on continuous improvement. By setting clear goals, creating efficient workflows, and monitoring performance, operations managers can help businesses achieve greater success and achieve higher levels of profitability. Good luck!