Operations management is generally seen as business models and strategies being brought to life. Operations management is about managing resources that create and deliver products and services in a wide variety of manufacturing or service areas where the scope is vast and complex. All organisations have an operations function in some form or size.
The function of operations is at the core of an organisation, since it creates and delivers a service or a product. The OM department works closely with marketing in order to have and deliver the right products and services to customers. It also needs to support functions like accounting, HR and IT support for the organisation to function. Each organisation will therefore develop a structure in order for it to deliver its products and services efficiently and effectively. The firm’s performance is measured against benchmarks or established performance indicators based on the operations system where the effectiveness, efficiency, productivity, cycle times or capacity can be measured. Operations are also influenced by the external environment and regulatory compliance with the legal and regulatory environment, and they reduce waste and demonstrate responsibility to stakeholders and the environment.
Performance objectives are based on a ‘mantra’ of quality, speed, dependability, flexibility and cost. These form the basis of competitiveness that is driven by matching products and services to customer needs, or through exploring how innovation will expand the product and service base.
Every product or service the organisation plans to produce is based around an input-transformation-output model which requires systems to support the process. Today, these systems are technology driven, seeking business solutions that cover not only the core operations of producing products, but also supply chain management and logistics. Advanced technology driven systems seek efficiency in the purchase, production and delivery of products and services, to ensure that resources are optimised and waste is eliminated.
Strategy concerns a dynamic and systematic process for planning broad objectives that direct the organisation towards an overall goal. Operations should not be confused with operational. Operations has a strategic role, since it is at the core of the organisation. Performance measurement enables goal setting, whereas operations strategy is based on layers or a series of strategic decisions and actions that set objectives, and the actual activities of the operation.