Operations management is a field of business concerned with the administration of business practices to maximize efficiency within an organization. It involves planning, organizing, and overseeing the organization’s processes to balance revenues and costs and achieve the highest possible operating profit.

An operations manager is tasked with ensuring that the organization successfully converts inputs such as materials, labor, and technology into outputs in an efficient manner.

This article is aimed at highlighting the role played by products and services in operations management. Let get into it

• What are the Roles of Operation Management?
• What are the Roles of an Operations Manager?
• Why are Services Important in Operations Management?
• What are the Key Elements or Functions of Operations?
• What are Some Elements in Operations Management Strategy
• What are the Reasons for Product and Service Design?
• What is Service Design in Operations Management?
• What are Operational Services?
• What is Operational Experience?
• What are the Key Elements of Operations Improvement?

What are the Roles of Operation Management?

Operations management is a field of business that involves managing the operations of a business to ensure efficiency in the execution of projects. It means that the individual in charge of the department will be required to perform various strategic functions. Some of the functions include:

1. Product Design

Product design involves creating a product that will be sold to the end consumer. It involves generating new ideas or expanding on current ideas in a process that will lead to the production of new products. The operations manager’s responsibility is to ensure that the products sold to consumers meet their needs, as well as match current market trends.

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Consumers are more interested in the quality of the product more than the quantity, and the organization should create systems that ensure the products produced meet the needs of the consumer.

2. Forecasting

Forecasting involving making predictions of events that will occur in the future based on past data. One of the events that the operations manager is required to predict is the consumer demand for the company’s products.

The manager relies on past and present data on the uptake of the company’s products to determine future trends in consumption. The forecasts help the company know the volume of products needed to meet the market demand.

3. Supply Chain Management

Supply chain management involves managing the production process from raw materials to the finished product. It controls everything from production, shipping, distribution, to delivery of products.

The operations manager manages the supply chain process by maintaining control of inventory management, the production process, distribution, sales, and sourcing of suppliers to supply required goods at reasonable prices. A properly managed supply chain process will result in an efficient production process, low overhead costs, and timely delivery of products to consumers.

4. Delivery Management

The operations manager is in charge of delivery management. The manager ensures that the goods are delivered to the consumer in a timely manner. They must follow up with consumers to ensure that the goods delivered are what the consumers ordered and that they meet their functionality needs.

If the customer is unsatisfied with the product or is complaining about certain features of the product, the operations manager receives the feedback and forwards it to the relevant departments.

What are the Roles of an Operations Manager?

Operations managers in almost any business are key personnel in upper-level management that make sure the company is performing to its best potential. They keep their eyes on multiple areas within the company, assuring productivity and efficiency while seeking to reduce costs.

They manage other key leaders within several departments and guide groups of people to complete their individual tasks in order to achieve company-wide goals.

A Big-Picture Perspective

Because they are responsible for the overall well-being of the company’s operations, these types of managers tend to have a big-picture perspective. They are able to determine needs within the company and connect groups to work together to solve problems as they arise.

They need to be critical thinkers who can analyze situations and make decisions geared toward the company’s best interests rather than those of a single department. This may mean that they also need to resolve conflicts as they arise between employees and set policies and guidelines for how to complete tasks.

In terms of skills and abilities, operations managers need a healthy mix of hard and soft skills. Depending on the industry, managers may need mechanical aptitude and knowledge of manufacturing equipment, but most certainly will use computers and a variety of related software programs, including customer management tools and budgeting and accounting software. They also need to be able to manage people effectively using good listening, motivation, and communication skills.

Oversight of Financial Information and Budgets

A large part of an operations manager’s job is to oversee the creation and administration of budgets within each area of the company. Strong leaders will regularly monitor expenses and curtail a department’s spending if necessary to keep the company on budget. They will also engage in cost-benefit analysis, seeking to obtain the best price for materials and oversee production methods so that output is at peak efficiency levels.

Supervise Supply Chain and Inventory

Another area of oversight is the management of supply chain procedures and inventory tracking. In order for the production teams to operate effectively they need to have a steady supply of materials.

Similarly once their job is completed, finished products must be properly inventoried and then sent out the door and up the supply chain to retailers or direct customers. While each department is busily doing its specific job, operations managers have their eyes on the entire process and can intervene and make adjustments as needed.

Workflow and Staffing

Operations managers also have a good handle on the staffing requirements of the organization. They work with HR to hire and train new employees and handle disciplinary issues. Because they are aware of the needs in each department, they can adjust the workflow and reassign tasks to improve efficiency in the operation.

Operations Managers in Various Industries

While operations managers all use a wide variety of skills to do their job, some, particularly in large companies, may specialize in an area and focus within a particular department. For example someone with a strong background in human resources may become an HR operations manager, overseeing the entire department. Some of their specific responsibilities may include:

• Create and manage the department’s budget
• Define company policies and implement training
• Monitor internal HR systems and ensure compliance
• Oversee hiring objectives and job description creation
• Stay on top of employment trends, legal issues and best practices
• Purchase software or other tools to improve department efficiency

Managing in a Small Operation

If a business is particularly small or offers a service rather than manufacturing a product, the terminology for this role may be slightly different. An office manager will typically function in a very similar capacity, supervising the overall functioning of business operations, including finances, staffing, policies, marketing and goal-setting. Whether the company is large or small, the position still is essential for the company’s overall success.

Why are Services Important in Operations Management?

Operations management for services has the functional responsibility for producing the services of an organization and providing them directly to its customers. It specifically deals with decisions required by operations managers for simultaneous production and consumption of an intangible product.

These decisions concern the process, people, information and the system that produces and delivers the service. It differs from operations management in general, since the processes of service organizations differ from those of manufacturing organizations.

In a post-industrial economy, service firms provide most of the GDP and employment. As a result, the management of service operations within these service firms is essential for the economy.

The services sector treats services as intangible products, services as a customer experience, and service as a package of facilitating goods and services. Significant aspects of service as a product are a basis for guiding decisions made by service operations managers. The extent and variety of services industries in which operations managers make decisions provide the context for decision making.

The six types of decisions made by operations managers in service organizations are: process, quality management, capacity & scheduling, inventory, service supply chain and information technology.

What are the Key Elements or Functions of Operations?

Operations management pertains to managing the operation and process within an organization. With effective operations management, there is much more accountability and accuracy for successful delivery of a product or project.

Within the process, operations management performs various functions that are apart of aiding the increase within production. Therefore, here are the key functions of operations management.

Key functions of operations management include the following:

1. Finance

Finance is a crucial component within operations management. It is essential to make sure that all finances have been utilized to their fullest extent and are being properly carried out to ensure for optimized creation of goods and services. Proper utilization of finances will allow for a product or service to be created that will satisfy overall consumer needs.

2. Strategy

When utilizing strategy within operations management, this refers to planning tactics that can aid through optimized resources and development of a competitive edge over other businesses. Many business strategies include supply chain configuration, sales, capacity to hold money, and optimum utilization of human resources.

3. Operation

This function of operations management is concerned with planning, organizing, directing, and overall control of all activities within the organization. This is the primary function of operations management and will effectively aid in converting raw materials and human efforts into a durable good and service that consumers will be able to utilize.

4. Product Design

With new technology becoming available, the selling of a product become much more simple. One of the main duties of operations management is to ensure that a product is designed properly and caters to market trends and needs of consumers. Modern-day consumers are concerned about quality instead of quantity, which is why it is so crucial to develop a durable and top-notch quality product.

5. Forecasting

Forecasting is the process in which software makes an estimate of certain events that may occur in the future. In operations management, forecasting can take an estimate of consumer demand, which correlates with production through creating an accurate amount of product needed within a given time. Overall, forecasting plays a crucial role within the production process.

What are Some Elements in Operations Management Strategy

Most organizations are familiar with strategic plans, outlining strategy over a three to five year period and establishing a stable long-term vision. But these same organizations often lack operations plans.

What is an operations plan? In short, it lays out the who, what, when, and how of your daily operations over the course of the next year. It is meant to define how human, financial, and physical resources will be allocated to achieve short-term goals that support your larger strategic objectives. On a day-to-day basis, your operations plan will answer questions like:

• Who should be working on what?
• How will we allocate resources on a given task?
• What risks do we face at present?
• How can we mitigate those risks?

Put simply, your operations plan is a manual for operating your organization – designed to ensure that you accomplish your goals. It’s a key piece of the puzzle for any goal-oriented team. So what steps can you take to develop a strong operations plan?

1. Start with your strategic plan

Ultimately, an operation plan is a tool for carrying out your strategic plan. It’s important, then, to make sure that you have a strong strategic plan already in place, and that everyone involved in your efforts understands it. Without this guidance, writing an operations plan will be like trying to plan a vacation without knowing where you’re going.

If you can’t identify how an element of your operations plan helps you achieve a specific strategic objective, then it shouldn’t be part of your plan.

2. Focus on your most important goals

There’s a simple rule when it comes to operations plans – the more complex they are, the less likely it is that a team will follow them successfully.

In order to avoid writing a tangled tome of a plan, focus on the goals that truly matter. Before you even set down to create your operations plan, break your strategic plan down into one-year objectives. Then determine the key initiatives that will help you achieve those goals. They might be:

• New organizational structures
• Quality control measures
• Faster delivery times
• More employee time spent on professional development

…along with many other possibilities. Choose between three and five initiatives that will drive success in your long-term goals, and then identify metrics that will help you measure your progress. These key performance indicators (or KPIs) will be among your most powerful tools for success.

3. Use leading – not lagging – indicators

Your KPIs will play an important role in your operations plan’s success – so it’s critical to choose the right ones. The most effective metrics are leading indicators: predictive measures that show you what to expect in the future and allow you to adjust course accordingly. By contrast, lagging indicators show you that your progress is falling short only after it’s too late. 

If your goal is to reach a certain sales threshold, for example, sales meetings or calls-per-week might be a strong leading indicator. Based on your past experience, you may be able to calculate how many calls it takes, on average, to complete a sale.

This will allow you to use calls to determine whether you’re on track to meet sales goals. If you were to simply measure sales, however, you wouldn’t know where you stood relative to goals and projections until you were already there.

4. Don’t develop your KPIs in a vacuum 

The KPIs you choose will guide the work of everyone in your organization for the next year. With this in mind, you should draw on a wide variety of perspectives within your team as you develop those KPIs.

If your organization is made up of 15 people or less, you may want to hold an annual planning session where everyone collaborates to craft the KPIs for the coming year. Larger organizations may wish to restrict participation to their leadership teams. In either case, the key is to include a range of perspectives in the planning process – but not so many that effective decision-making becomes difficult.

5. Communication is paramount

At the beginning of the year, set aside time to share and discuss your KPIs with your entire organization. It’s essential for everyone to understand why you’ve chosen these specific metrics, why they matter, how they will help your organization achieve its goals, and what each individual’s role may be in working toward success.

The importance of buy-in and communication among your team is hard to overstate. Hold regular meetings – ideally weekly – to communicate organizational progress on your KPIs and discuss any issues that may have emerged. Whether through meetings, dashboards, or some other means, team members should be able to track their personal progress and performance on a weekly basis.

With a strong operations plan in place, your organization should have everything you need to tackle your priorities successfully – and ultimately achieve the goals that will drive your strategic vision.

An operation doesn’t necessarily include projects. It defines the organizational structure, how different branches within a company run and what steps they’ll take to reach one-year goals that are in line with the strategic plan. Once the strategic and operations plans are in place, then you develop project plans that can help you achieve those specific goals.

What are the Reasons for Product and Service Design?

According to a survey by Bain & Company, done already in 2005, 80% of companies believed that they delivered their customer’s excellent value and a superior service experience. Only 8% of their customers agreed. Over a decade later, the gap between these views has stayed the same in many organizations.

There is pressure especially towards internal services in organisations. While the consumer market offers continuously developing and increasingly user-friendly services, the users still face inconvenient systems, complicated processes and incomprehensible communication in their work organisations.

How do you bring services to the level the customers expect? Digitalization requires a new approach to services. A world view that is based on the product or service itself can no longer keep up with the changing needs of customers and businesses.

Instead, services must be seen as a whole, from the viewpoints of business objectives, users, and delivery. The user experience has become a prominent battlefield of competitiveness, differentiation and growth. At the same time, services must be profitable and efficiently produced.

1. Service design breaks down false conceptions of customers

A typical story of the significance of user understanding could go like this: A new service is designed and released by a company. Soon after the release, it becomes clear that the service is not used as much as the company hoped. Based on feedback, the service is made more user-friendly. Still it is not used. The problem?

The service is not even remotely meeting the needs of customers, i.e. users. The development team has failed to properly understand the everyday life of the user and the problems that the service is intended to solve.

Too many organizations operate based on outdated customer conceptions or pure assumptions. If the users are the last item on the priority list, an organization can hardly ever achieve the business benefits that it strives for with its services. The responsibility for using the services (the right way) does not lie with the user, not even when the user is an employee using an organization’s internal services.

2. Service design breaks down organisational silos

If in the current situation, marketing department answers for the service sales, data administration and suppliers answer for the background systems for registering, and business functions answer for the service itself, the responsibility for the service as a whole often falls in no-man’s land. This often manifests itself to the user as frustrating and ineffective chaos.

Service design methods bring the user experience and service integration to the centre of design and therefore shift the attention from local optimisation to comprehensive examination.

When various departments are engaged in the development work and the customer journey is made more concrete, genuine understanding and commitment emerge. A service design professional helps to question the predominant assumptions, prioritise functionalities, break down overlaps, and simplify the service.

3. Service design finds the balance between different requirements

Digitalisation makes services available to the user in an entirely new way. Through various self-service channels, the users can be offered clear and automated service packages. Utilising automation and self-service, however, requires methodical design in order to balance the value gained from the services against the time and energy required from the user.

In order to deliver a service effectively, it is necessary to determine which factors in the service are critical for the user, and when it is best to focus on smooth and cost-effective background processes. Service design steers the users’ actions in a direction where profitable service production is possible.

Service design systematically looks for a healthy balance between the different requirements. This maximizes the user’s service experience in a way that is also profitable to the business.

What is Service Design in Operations Management?

Service design is concerned with the design of services and making them better suit the needs of the service’s users and customers. It examines all activities, infrastructure, communication, people, and material components involved in the service to improve both quality of service and interactions between the provider of the service and its customers.

The objective of service design is to formulate both front office and back office strategies that meet the customers’ needs in the most relevant way whilst remaining economic (or sustainable) for the service provider. Ideal services are considered to be user-friendly and competitive within their market.

There are many different disciplines that comprise service design. The most common are ethnography, information and management sciences, interaction design and process design.

Service design is used both to create new services and to improve the performance of existing services. As Matt Beale, from the Carnegie School of Design says; “Design is about making things good (and then better) and right (and fantastic) for the people who use and encounter them.”

“[Service Design] is an emerging discipline and an existing body of knowledge, which can dramatically improve the productivity and quality of services.

Service Design provides a systematic and creative approach to:

• meeting service organisations’ need to be competitive
• meeting customers’ rising expectations of choice and quality
• making use of the technologies’ revolution, that multiplies the possibilities for creating, delivering and consuming services
• answering the pressing environmental, social and economic challenges to sustainability
• fostering innovative social models and behaviours
• sharing knowledge & learning”

They also provided the format for a service designer’s responsibilities:

“The Service Designer can:

• visualise, express and choreograph what other people can’t see, envisage solutions that do not yet exist
• observe and interpret needs and behaviours and transform them into possible service futures
• express and evaluate, in the language of experiences, the quality of design”

As well as setting out expectations for the way service design would perform:

• “Service Design aims to create services that are Useful, Useable, Desirable, Efficient & Effective
• Service Design is a human-centred approach that focuses on customer experience and the quality of service encounter as the key value for success.
• Service Design is a holistic approach, which considers in an integrated way strategic, system, process and touchpoint design decisions.
• Service Design is a systematic and iterative process that integrates user-oriented, team-based, interdisciplinary approaches and methods, in ever-learning cycles.”

While these definitions have evolved a little over the years – they remain the core ethos of service design and what service designers should do in their work.

Service design is every bit as important as product design and UX designers will find that as web products evolve to become web services, they are more and more involved in service design. The good news is that the core skills of UX design are similar when it comes to service design – they are just altered somewhat in scope.

What are Operational Services?

Operations services handle the transfer of all or part of the day-to-day system management responsibility for a customer’s IT infrastructure (host/data center, client/desktop or connectivity/network) and, in some cases, the transfer of ownership of the technology or personnel assets to an outside vendor.

Services may include systems operation or support, administration, security, performance monitoring, technical diagnostics/troubleshooting, configuration management, system repair management, and generation of management reports. Also included are services to manage and implement business continuation processes and the management of technology assets.

What is Operational Experience?

Operational experience is a key stepping stone on the way to the top position in any organization. It provides a woman with a vital understanding of the day-to-day running of a business. In these roles, women are responsible for operating and improving the systems that produce and deliver an organization’s products or services.

Manufacturing, purchasing, supply chain management, distribution, and call center operations are all examples of operational roles (also often referred to as line roles or front-line roles), and there are many more. Which roles are classed as operational depends on the products a company is producing or the services it is offering.

However, operational roles are always at the core of what a company delivers, as opposed to functional roles that provide support services such as human resources (HR), legal, and finance. While no modern organization could function without these support functions, they are not deemed to be central to a company’s day-to-day operation.

Without operational experience, aspiring to the CEO role is unlikely to be a realistic target unless you are progressing in finance, one of the few exceptions, as chief finance officers (CFOs) are deemed to be credible contenders for CEO roles while no other functional heads are.

What are the Key Elements of Operations Improvement?

Business operations is the facet of an organization where most of the direct labor takes place. In a service business, operations are highly task-oriented and tend to follow clear steps until the service is completed.

In a manufacturing company, operations are even more central and follow the product from basic resources to a completed unit and that unit’s transportation. Many other business activities support these primary operations, and certain types of business management focus solely on operations and how they can be improved.

Supply

When it comes to business operational management, the organization must bring in a supply to work with from somewhere. For service-oriented companies, this supply tends to be primarily data, although office supplies and hardware are also important factors.

For manufacturers, supply is the raw materials that the company buys to make products. The supply should be dependable and cost-efficient, with the business buying the best resources at the best prices. Many businesses have supply management strategies to locate the best prices for this end.

Efficiency

Business operations should also see efficiency as a primary goal. The efficiency focus began with practices such as lean management and systems management used primarily in manufacturing circles, but the concepts soon found their way into other industries.

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How the business arranges its production chain physically, how many steps of the production process it can do at the same time and what the downtime of its equipment or process is are all vital factors in increasing efficiency. The goal is to produce as many goods in as short a time as possible.

Reliability and Adaptability

Reliability and adaptability provide an interesting tension in business operations. On one hand, operations need to be reliable. Supervisors need to know that they can produce a certain amount of units to meet potential demand no matter what. On the other hand, businesses need enough adaptability to change with market and technology shifts and embrace new practices to keep operations efficient.

Quality Control

While the steps of the operational process are important, the organization must also assess its work at the end of the process. Quality control examines the final product and looks for defects and ways it can be improved. Most businesses will only accept a certain level of defects or problems — some prefer not to accept any at all. This improves product flow and solves minor problems that could become major issues later on.