Home‎ > ‎Operations Management‎ > ‎

Operations Management System

What is Operations Management?
Operations management (OM) is the management of systems or process that covert or transform resources into goods and services. In other words it's responsible for managing the core processes used to manufacture any goods and services. This process carefully focuses on managing  an expansion to produce and distribute products and services. Operations Management is very important to any business because it simply deals with the design and management of products, supply chains, processes, and services that is provides. It consults the development, acquisition, and utilization of resources that firms need in order to deliver the goods and services that clients request. Eventually, the nature of how operations management is carried out in an organization depends very much on the nature of products or services in which the organization is all about, for example, retail, manufacturing, wholesale, etc.

Typical Operations Management activities include:
  • Forecasting
  • Capacity planning
  • Scheduling
  • Managing inventories
  • Assuring quality
  • Recruiting, training, and motivating employees
…and are different from the transformation of inputs into outputs in production and service activities:
  • Cutting materials
  • Packaging products
  • Serving customers
  • Performing a medical examination

A key objective for an Operations Management is the ability to increase the value-added during the transformation process. Value-added is the difference between the cost of inputs and the value or price of outputs. This is an indicator of the effectiveness of the operation. On the other hand, if an activity does not add value, it will most likely get eliminated or reexamined for improvement. In this case it falls into its main function of more planning and decision making.

Why is Operations Management important?
Operations management activities are central to all business organizations.

People in all functional areas need to have a basic understanding of Operations Management to interact with or support operations:

  • Manufacturing and/or Service Operations
  • Finance and Accounting
  • Marketing
  • Sales
  • Research, Advanced Development, Development, Engineering
  • Human Resources

Career opportunities in Operations Management related areas:

  • Operations analysis, planning, and control
  • Inventory management
  • Purchasing
  • Scheduling
  • Quality assurance
  • Customer service

 With the globalization of markets all around, firms are recognizing that the operations function can be used to strengthen their outlook in the market place.  Operations management's role in business is to do it cheaper, better, and faster which leads to a continuous search for new ideas and tools to improve operations. In these past recent years there has been some developing  ideas such as Six Sigma, Total Quality Management, Lean Logistics, Global Sourcing, Just-in-time, and Supply Chain Management that really helps the entire operation of a business.The vast changes such as technological developments and increased sophistication of consumer tastes and preferences have also accelerated the vital importance of operations management systems in the business world today.



Baltzan, Paige & Phillips, Amy (2009) Business Driven Information Systems. 2nd ed. New York: McGraw-Hill/Irwin.

Stevenson, William J., (2007) Operations Management. 7th ed. New York: McGraw-Hill/Irwin.