Operations management plays a vital role in maximising the productivity of the organisation. Biju G Pillai tells you more

Over the last five years, there has been an increase in the demand for operations management professionals. Right from manufacturing and service, to IT & ITES and telecom sectors, operations management has become a core component of the overall business strategy of these organisations.

It is important to understand the basic difference between operations management and organisational strategy.

Organisational strategy is figuring out how and why of reaching the company vision, and achieving business goals.

Operations management pertains to design, operation, and control of all processes undertaken from the procurement of raw materials to the delivery of the finished products to the end customers.

For example: A garment factory sets the target of increasing its output by 25 per cent. The top management then formulates a strategy regarding the operations management to determine the requirement of human resources, production facilities, technology and finances to reach this target. Once the strategy stage is taken care of, it is the responsibility of the operations manager to execute this strategy effectively and provide the results expected by the company.

Operations management plays a strategic role in maximising the productivity of the organisation through successful and optimal integration as well as the execution of all resources in the overall operations system. Operations management keeps the supply chain or value chain of the organisation running like a well-oiled machine. The organisational strategy sets benchmarks for the success of the business goals whereas the operations management translates the strategic objectives into workable objectives. Without an organisational strategy, operations management wouldn’t know what to do. Without operations management, the strategy will fail to execute.

Both are closely related and need to work in cohesion for the conversion of the vision into concrete, specific tasks.

There are several other examples of sectors which are highly dependent on the operations management for their success. E-commerce is one of them. All e-commerce companies such as Amazon, Flipkart, Paytm, MakeMyTrip and others put great emphasis on their operations management. As soon as a customer orders a product online, there are several backend activities undertaken by their operations team simultaneously. It processes the order, checks the inventory levels in the warehouse, sends purchase invoice to the supplier, procures the product, arranges transportation from supplier to warehouse, packages the product, then ships it to the customers and performs many other miscellaneous functions. Now just imagine if the shipment gets mixed up and a wrong product reaches the customer. Or, the courier service company refuses to deliver the product due to some reason. All such issues can lead to customer dissatisfaction and eventually harm the reputation of the brand. The operations management ensures that all end-to-end value chain functions run seamlessly and none of the adverse situations occurs.

Similarly, an operations manager in a restaurant works closely with the kitchen, serving and dishwashing staff as well as all other employees who work behind the scenes. He is also responsible for payroll, administrative activities and employee training. On the front end, he interacts with customers, oversees the seating arrangements and handles their complaints.

The following key functions of the operations management will help you to understand its relevance to the overall organisational strategy even further:

Planning and Forecasting

Operations managers brainstorm with the top management during strategy formulation and plan every operational aspect from asset allocation to product delivery. They also forecast the product demand and probable occurrence of certain events to do capacity and production planning.

Efficient Use of Resources

Whether the resources are scarce or in abundance, the operations managers have to ensure their efficient use for effective output. They help strategise which operation activity requires what amount of resources.

Design

The design of the product on paper may not really translate successfully into the actual product. It needs to be tested to ensure if it is feasible to manufacture and market. The operations managers are involved in both the technical and business design of the product.

Standardisation

Imagine customers getting a different taste of the same recipe every time they order it. If the recipe isn’t prepared exactly the same every time, the inconsistent taste will deter customers to visit the restaurant again. The operations managers ensure standardisation of every little process that goes into the production or service delivery so that customers get consistency in value they receive.

Quality Improvement

There is always room for improvement in the operations processes in terms of inventory, human resources, capacity planning, etc. The operations management professionals continuously strive to raise the bar of quality by implementing quality control measures such as Just-In-Time, Total Quality Control, Six Sigma and other process improvement standards.

You can say that strategy is the brain of the organisation while operations management is the arms and legs of the strategy. Operations management facilitates smooth cooperation between all processes and functions to keep the organisation profitable.

The writer is Director, IT, Sri Balaji Society