What is Operations Management?
WHAT IS OPERATIONS MANAGEMENT?
Every organization has an operations function, whether it is explicitly called operations or not. A traditional view of operations is that it is:
Those activities concerned with the acquisition of raw materials, their conversion into finished product, and the supply of that finished product to the customer (Galloway, 1998, p. 2).
Another way to think about operations is that operations is what the company does. To identify the role of operations with an individual organization, ask the question, ‘what do you do?’ Amazon.com might answer that question with ‘we sell books and other goods on-line’. Isn’t selling different from operations? In this case no, because here selling involves the operations of transferring the ownership of products from the retailer to the buyer. Amazon.com’s front-line sales process works so well that the company’s customers come back over and over again. A hospital treats patients, and so we might ask: ‘isn’t that medicine?’ It is, but if you look beyond the doctors and nurses who treat patients, a whole organization exists to supports their work – facilities management, staffing, catering and so on. All of this comes under the responsibility of operations management. So it’s important to bear in mind that operations take place throughout an organization. It’s often impossible to speak of operations taking place in just one specific area. Operations will take place in different ways in the entire organization and, as you’ll see throughout the book, we will provide ways for you to understand the nature of the operations taking place in each case.
Within organizations, operations management describes the functional area responsible for managing the operations that produce the organization’s goods and services for internal or external customers or clients. Operations management gives us a way of thinking about operations that helps us design, manage and improve the organization’s operations in an orderly fashion. Operations managers are the people who design, manage and improve how organizations get work done.
A key aspect of operations management is that it focuses on processes. A definition of processes is, as Hewlett Packard describes, ‘the way we work’. Due to the significant role that processes play in operations, operations managers frequently use tools and techniques developed for analysing processes, and we shall see a range of these in the book.
Operations management also describes the academic study of the different operations practices used by organizations. In this context, operations management draws lessons from organizational success and failures and makes those lessons available to students and managers.
Studying operations management gives us the tools to analyse the operations of an individual organization or groups of organizations and to prepare them to compete in the future. The study of operations management is highly relevant to whatever work you do or plan to do. Most managers are involved in some aspect of operations every day, but many never realize it. Familiarity with operations enables managers to manage their responsibility better, whether they are directly responsible for the organization’s goods and service outputs or not.
Similarly, studying operations management is useful for all management students, because you can apply operations concepts to everyday aspects of your study and work activities. Also, because operations management is at the core of what any organization does, it has important connections with other functions including marketing, human resource management and finance.
Source : Operations management: policy, practice and performance improvement by Brown, Steve
