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What Is Operations Management?

Operations management is a growing field — according to O*Net OnLine, the number of projected job openings for 2022-2032 is 296,300. These roles are found in both the public and private sectors, and an operations manager may oversee multiple departments or locations.

Considering a career in operations management? Suresh Chand, PhD, professor of supply chain and operations management at Purdue University, discusses the functions of this important role.

Operations Management: An Overview

Defining operations management is a complicated endeavor, and Chand provides the following setup to fully understand it.

“A customer needs a product or service. To be successful, businesses have to offer customers what they want. Perhaps the customer wants a certain quantity, a target delivery date or a variation on the product,” Chand says.

“To deliver these products and services, a business needs processes. Operations management is basically the management of these business processes to match the supply with the demand in a profitable way,” he explains.

Functions of Operations Management

Regardless of the industry, operations managers make decisions that influence the company long-term. These fall into two main categories:

1. Supply Chain Management and Logistics

Supply chain management is the oversight of material flow, cash flow and information flow within an organization and across other companies. A huge part of an operations manager’s job is understanding how inventory moves through the supply chain and how to manage the related processes.

Logistics is one of those related processes. Investopedia refers to logistics as the processes involved in securing and handling resources.

“Logistics is particularly important in manufacturing sectors. Operations managers must manage the overall processes of acquiring resources, storing them and transporting them to their final destination,” Chand says.

2. Managing Production and Delivery of the Company’s Product or Service

Good production and delivery management ensures that what you promise your clients is delivered on time and as expected. Operations managers oversee the coordination of customer orders, production schedules, delivery schedules, dispatching loads, invoicing customers and receiving payments.

“There are some important metrics in this area that operations managers must pay attention to,” Chand says. “Flow time is a critical one. How long does it take from the time you get the customer’s order to the time you deliver it?”

Another metric that operations managers monitor is cycle time.

“How fast are we producing? If your cycle times are long, that means you are producing at a slow rate, and that means you are not generating revenue,” Chand says.

Collaborative Efforts With Other Departments

An operations manager will play a prominent role in additional key decisions, including:

1. Choosing an operational tech stack. This is the software used by your back-end teams including finance, marketing and sales. While this is mainly an IT function, operations leaders are often involved in the decision-making process.

“Obviously, you'll need the proper software and tools for people to use to execute these business processes, so operations people must have some input here,” Chand says.

2. Business forecasting. This refers to using data to make business decisions. This is a responsibility of the marketing department, but operations managers need to have a say here as well.

“An important part of operations management is not only to meet the demand but to improve upon those processes,” Chand says. “This makes data collection and analysis a vital aspect of an operations manager’s job. You want to design the process so that you can collect data, learn from it and then improve it for next time.”

3. Budgeting. Mainly a function of a company’s finance department, operations managers also give input on budgeting — specifically expense planning and anticipating operational changes.

“Operations decisions have a big impact on both cash flows and outflows,” Chand says. “Operations and finance need to work together closely.”

4. Product design. This is the process of ideating and developing products that meet customer needs. How you deliver the product affects how your product design team will make the product and how much it will cost, making the operations manager’s input vital.

“Product design teams should work closely with operations managers, and the two need to keep getting and giving feedback regarding whether this product can even be made,” Chand says. “There needs to be close cooperation between them.”

>>Read More: What Can You Do With an MBA With a Specialization in Supply Chain Management?

Launch Your Operations Management Career With the Purdue Online MBA

At Purdue University, all MBA students are required to take one 3-credit core course in operations. With an MBA with a specialization in global supply chain management, students will learn best practices for anticipating risks and the ongoing management of a supply chain.

“The specialization in global supply chain management is composed of another three to four advanced courses that cover such topics as sourcing and procurement, supply chain analytics, logistics, inventory management and advanced operations management,” Chand says.

If you want to learn more about the Purdue Online MBA and how it can help you reach your career goals, please reach out to connect with an enrollment specialist.

If you would like to receive more information about pursuing a business master’s at the Mitchell E. Daniels, Jr. School of Business, please fill out the form and a program specialist will be in touch!

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