7 Functions of Operations Management and Skills Needed 2023

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Google’s operations management involves strategic goals that match the 10 strategic decisions of Alphabet Inc.’s operations management and productivity approaches. The effectiveness of core competencies in operations management affects how the technology and online service company fulfills its strategic goals and objectives. In this regard, the 10 strategic decision areas of operations management contribute to the achievement of Alphabet’s (Google’s) corporate mission statement and corporate vision statement. The strategic decision in this area of operations management focuses on maintaining an effective workforce for the information technology business.

Setting priorities, making operational decisions based on business goals and aligning operations to support overall company objectives. Jobs in operations management typically require a bachelor’s degree in a business-related subject such as business management or business administration. These programs focus on relevant subjects like finance, business management, economics, business communications, and logistics.


In the particular case of Google, Alphabet’s layout design and strategy involve workplaces that are designed to motivate employees’ creative and innovative workflows at Googleplex in California. In developing web-based and software products, the company combines efficiency and creativity to optimize productivity. Alphabet’s corporate structure, including the organizational structure of Google and other subsidiaries, defines the layout requirements in this strategic decision area of operations management.

Responsibilities of operations managers

As an operations manager, you’ll need to organize, plan, and delegate. But to take your skills a step further, you must be a good problem-solver as well. There are many problem-solving strategies you can study and keep in your toolbox—and your team members will appreciate your quick solutions when things get tough. Your education, experience, and skill set are all clearly described in a strong operations manager resume. Create a cover letter when looking for positions that emphasize how you can assist the business in expanding.

  • There are three basic kind of production system, namely, process production, job production and intermittent production.
  • Financial management is an indispensable organ and have a wide scope of business management.
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  • HR contains functions like employee training, compensation and benefits, and recruiting.
  • Variance of processes has to be encouraged, because if managed well, they can be sources of creativity.

An effective operations manager is defined as the master and commander managing resource input and output. These professionals optimize processes to decrease the cost of goods per unit, making it possible to sell at a lower price and leave a high margin to remain agile in competitive business environments. Processes executed in this fashion are typically able to reward the hard work of the teams involved in production. Managing each and every aspect of organisation operations efficiently is key role of operation management. It focuses on raising the profit of organisations by maintain a proper balance between cost and revenue. This process ensures that all resources like raw materials and labours are efficiently utilised by organisation for production of its goods or services.

Operations Management Meaning

Project management is the administration and control of project-related activities, as opposed to operations management, which is the administration and control of functions and operations. When goals are not met, leaders delve further into operations to determine where primary problem areas might lie. All these decisions are taken by them by doing research and analysing properly the prevailing situations. They work towards strengthening and enhancing the production system to minimize the wastage and maximize the output.

Such a capital structure as makes use of proper amount of debt capital is called optimum capital structure. Such a capital structure has the attribute of maximum market price of shares and minimum cost of capital. Product lifecycle management refers to the handling of a good as it moves through five typical stages of its lifespan, from development to decline. Amanda Jackson has expertise in personal finance, investing, and social services.

Behind most successful supply chains is solid operations management because it provides managers the means to direct resources toward desired results. The goal of operations management is to make your decisions smarter and your production leaner. Whether you’re keeping daily projects on track, monitoring product quality, or developing business strategies, Asana can give you the high-level perspective you need to do it all. Critical thinking is important for the strategic function of operations management because it’s how you create thoughtful ideas and tie them back to fundamental points.

Operation management covers sectors like banking systems, hospitals, companies, working with suppliers, customers, and using technology. Operations is one of the major functions in an organization along with supply chains, marketing, finance and human resources. The operations function requires management of both the strategic and day-to-day production of goods and services. Each of these requires an ability to analyze the current situation and find better solutions to improve the effectiveness and efficiency of manufacturing or service operations.

It begins with preparing a budget, evaluating the actual performance, and implementing the necessary actions required to rectify any discrepancies. Given that every business needs to operations management to function, there are many examples across industries. Moreover, every industry can have a wide range of operations functions.

The average collection period formula functional area is led by the Chief Financial Officer , who is one of the most important “C-level” executives. In addition to running Finance and Accounting, the CFO is responsible for reporting company results to the financial community. Finance also contains Human Resources in many companies and the Legal department as well. It is common for the CFO to have VPs of HR, Accounting, and Legal as direct reports. HR contains functions like employee training, compensation and benefits, and recruiting.

Skill needed: Financial planning

The environment of work in which the employees have to work has great effect on their efficiency. It is, therefore, the function of personnel management to provide good work environment. First objective of personnel management is to provide able employees to the organisation. Able employees alone can contribute to the achievement of the objectives of the organisation. Working capital management is a strategy that requires monitoring a company’s current assets and liabilities to ensure its efficient operation. Balancing the efficient use of resources, including staff, materials, equipment, and technology, is key to a successful OM process and, by extension, to the success of the company.

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Designing and engineering infrastructure and systems so your business operations function efficiently. Using real-time information from managers and employees on the ground performing the work to optimize operations. Without the operations team, the product design team would have trouble knowing what to create. The market is always changing, and creating a successful finished product requires extensive research.

This strategic decision area of operations management focuses on how to maintain consistently high quality within target cost limits for the company’s information technology products. For example, IBM’s operations managers look for methods to minimize cost fluctuations. These methods include continuous monitoring of operations to immediately solve problems. Considering the main strategic decisions emphasized in this area of operations management at IBM, such methods are on top of basic considerations for design specifications.

  • Selection is a negative process it involves rejection of unsuitable candidates.
  • The importance of advertising has increased in the modern era of large scale production and tough competition in the market.
  • But larger manufacturing companies often have clear lines between operations and human relations.
  • Therefore, it is necessary to plan and develop products which meet the specification of the customers.
  • There standards apply to both manufacturing and service organizations.

Another option to consider is a bachelor’s degree specific to an industry, such as economics, finance, or the law. Commerce Mates is a free resource site that presents a collection of accounting, banking, business management, economics, finance, human resource, investment, marketing, and others. Maintaining Quality– Operations managers should ensure a better quality of products. They should work on quality management and should supervise all tasks.

Additionally, learn about the objectives, nature, functions and activities of each functional area of management. The current healthcare system overuses expensive, technological, and emergency-based treatment. High costs from care often remain uncompensated due to uninsured patients.


IBM’s organizational structure influences operational approaches used for this area. For example, human resource development programs are aligned with the specific functional requirements in the different segments or divisions of the organization. This operational objective is addressed through strategies for online and non-online operations. For example, the company applies a traditional location strategy for non-online operations involving the manufacture, distribution and sale of its information technology products.

It aims to introduce new products, to enhance product acceptance and to create new customers etc. It emphasise and influence the buying decision and to get public participation in selling the products. Sales management includes the recruitment of sales employees, their selection and training, their supervision on work and motivation for work and the evaluation of execution of work. Personnel Management is more concerned with the different aspects of human relations and behaviour. It performs several roles like policy determination, planning, organising, direction, decision making, motivation and control which are more concerned with the human assets and human behaviour.

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Operation managementmeans the administration of business activities for attaining higher efficiency. It is a process of planning, organizing, and supervising the operations of the business for better productivity. Operation management aims at reducing the cost to business by avoiding any wastage of resources. You can categorize production and production systems in several ways, including by technical elements, processes, or lead time. Most modern production systems are software-based, meaning that planning, scheduling, and inventory control systems and processes are managed by software.


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