Thus far, we’ve defined what is business operations and presented the components of a plan of operations. Now, let’s look at what it means to manage operations in an organization.

While the nature of operations in any business will be unique; the operations management process is quite similar across industries.

Operations management concerns the management of business process for the efficient utilization of materials, equipment, technology, human resources, etc., within an organization.

It emphasizes on efficient conversion of materials and labor into products and services so as to increase the firms profits.

The teams strive to strike a balance between the costs and revenues of the firm for earning the maximum net operating profit.

Key responsibility of Operations managers include:

• Process management and improvement
• Inventory management
• Supply chain & logistics management
• Customer relationship management

Who are the Stakeholders Of Operations Management?

Operations management has an impact on the five broad categories of stakeholders in any organization.

The five groups are:

• Customers
• Suppliers
• Shareholders
• Employees
• Society

What are the Objectives of Operations Management?

The general objectives of operations management are:

• quality,
• speed,
• dependability,
• flexibility, and
• cost.

What are the Levels of Operations Management?

The organization of operations management can be categorized into three specific levels:

• strategic/top level/longterm management
• Functional/medium term/middle level management
• Operational/short-term management/front-line managers

As you can discern, these levels of operations define who is responsible, the level of the organization where this type of operational activity occurs, and the exigency or immediacy of the decision made.

Let’s take a brief look at each of these.

What is Strategic Management?

Strategic management is high-level management of the organization. It generally encompasses decisions about the companies mission, vision, and goals in the long-term or future. Some examples include:

• Products to make (product development)
• Make or buy decisions
• How to make products (process and layout decisions)
• How much to procure
• Production site location
• How much capacity is needed. (high level capacity decisions)

These are just examples of decisions that would be made by high-level executives with the purpose of steering the long-term course of the company.

What is Functional Management?

Functional management concerns the specific functions or departments within the organization. It generally has mid-term implications (1-3 years). Examples include:

• labor resources and planning
• inventory production and capacity planning
• inventory logistics

What is Operations-Level Management?

Operational-level management, often referred to as tactical management, concerns the lower-level decisions that affect daily operations.

These are the decisions of front-line managers concerning how the lowest-level activities of the organization are carried out.

Example of Levels of Management

Let’s say that you are the CEO of a popular clothing company. Your decision to expand product lines to enter into new markets would be an example of strategic management.

If you are a product manager in that same company, you would make decisions concerning where to source fabrics for the new product line. You would communicate with a logistics manager to come up with a plan to handle the logistics of shipping. Each of these managers are in charge of functional areas of the company.

As a front-line manager, you might be in charge of the manufacturing workers, or shipping personnel, etc. You oversee the core tasks the create and deliver the company’s value proposition.