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Operations Management

What is operations management?

Every element of supply chain — every process, operation, component and stage — is focused on efficiency. From the warehouse to the corporate offices, supply chain decision-makers, partners and organizations strive to increase efficiency in each and every facet of their day-to-day activities. The way that these activities are planned, organized, controlled and supervised is the product of solid operations management.

Operations management is results-driven and exists to turn inputs into outputs in the most concise and efficient manner possible. By leveraging equipment, materials, manufacturing and human resources, supply chain organizations can decrease the amount of time or resources required to achieve this outcome while increasing their net profit.

What is operations management?

Why is operations management important?

Operations management serves to increase efficiency, but the importance and benefits extend further. Operations management is crucial to any business as it enables effective management, control and supervision of goods, services and people. Without a proper operations management system in place, the chance of conflict across multiple departments increases. With an efficient system operating at high capacity, businesses are able to ensure that both internal and external processes continue to run smoothly even when unexpected situations arise.

Why is operations management important?

Responsibilities of operations managers

As one of the main facets of operations management is to ensure goods and services are delivered to customers on time, operations managers should be dedicated to controlling the production process and business operations as efficiently as possible. Operations professionals should also be aware of relevant local and global trends, customer demand and any available resources for production. In addition, operations managers are responsible for connecting with vendors that are able to fulfill and supply the appropriate goods or services at a reasonable cost.

Once a product or service has been delivered, an operations professional should also follow up with customers to ensure that their quality and functionality needs have been met — and collect any feedback or relevant information with regards to supply chain process improvement (and relay that to each applicable department). With each and every interaction with end customers and workers alike, an operations manager’s main goal should be to maximize net operating profits by balancing operating costs with revenue.

Responsibilities of operations managers

Types of operations management systems

Modern-day operations management systems encompass four main concepts: six sigma, business process redesign, reconfigurable manufacturing systems and lean manufacturing.

Six sigma

Six sigma is an approach to operations management that’s focused on quality. It implements control limits, which are placed at six standard deviations and use specific tools such as potential defect calculations, trending charts and other ratios to optimize quality control.

Business process redesign

Business process redesign focuses on analyzing, designing and redesigning business processes from the ground up with the goal of achieving an increase in performance measures such as quality of service, cost reduction and return on investment.

Reconfigurable manufacturing systems

Reconfigurable manufacturing systems are designed to integrate accelerated change in supply chain processes in order to increase capacity, productivity and efficiency in response to both market and system changes.

Lean manufacturing

Lean manufacturing is the systematic elimination of waste from within the manufacturing process. This system seeks to eliminate any wasteful resource expenditures, such as anything other than value creation for the customer, to streamline the supply chain.

Case study: Improving operations management

Prior to the COVID-19 pandemic, Switzerland-based pharmaceutical company F. Hoffmann La-Roche Ltd. collaborated with ASCM to improve its operations management strategy and increase efficiency and reliability, as well as define clear roles and responsibilities for employees and teams.

By leveraging and implementing ASCM Transformation Learning Programs, F. Hoffmann La-Roche Ltd. was able to reduce the lead time of its make-to-order finished goods kits by 50% and cut five days off of its make-to-order product process.

View Case Study

Transformation Learning Programs

To learn more about Transformation Learning Programs and how your organization can bolster its operations management to increase efficiency across all of your supply chain processes, visit our product page.

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