What Is Operations Management? (Plus Job Duties and Skills)

By Indeed Editorial Team

Updated December 5, 2021 | Published February 25, 2020

Updated December 5, 2021

Published February 25, 2020

Companies require oversight to maximize the efficiency of their operation. Many businesses employ operations managers who make sure people and processes within a company are working effectively. Operations management requires broad business knowledge, strong communication skills and long-term thinking. In this article, we explain what operations management is, what an operations manager does, important skills for an operations manager to have and the educational path for this profession.

Related: How to Show You're Ready for Management

What is operations management?

Operations management is the practice of implementing a set of business applications to maximize profits through efficient processes. Operations management is essentially people management. It seeks to get the most value out of inputs like labor to achieve the maximum output, or product. An operations manager's primary concern is efficiency within all aspects of the company.

Operations management requires reviewing, restructuring or, in some cases, recreating business processes to create the most product for the least amount of money. Operations management is delivery focused, meaning the goal is to deliver the best possible product to the consumer with each step in the production process completed as efficiently as possible.

Not every company requires an operations manager, but generally, companies that employ more than 20 people or have a particularly complicated production process benefit from employing an operations manager. Operations management can provide better product output and higher profits, which creates an advantage over competitors.

Companies with fewer than 20 employees may be able to tie the responsibilities of operations management into another top-level role.

Read More: Operations Management: Everything You Need to Know

What does an operations manager do?

An operations manager, sometimes known as the chief operations officer or COO, is responsible for managing all company operations and processes. Duties include process design, standard management, process improvement and optimization, and making important decisions regarding company strategy. Additionally, operations managers have a specific set of skills, including organization, strong communication and strategic thinking, that help them complete their job duties effectively.

  • Process design: Process design is the creation of new processes to handle the needs of the business efficiently. An example might be designing and implementing a new accounting system to track expenditures.

  • Standard management: Standard management practice involves attending to day-to-day management procedures like budgeting, employee oversight and maintenance on company supplies and equipment. An example might be devising a schedule for equipment maintenance with a clear and precise checklist for employees to utilize.

  • Process improvement and optimization: Process improvement and optimization involves operations managers assessing the steps involved in a process and either restructuring the existing steps to maximize efficiency or recreating the process entirely. Generally, these processes involve labor.

  • Labor oversight: Operations managers oversee the steps and actions employees take to make sure their work is as efficient as possible. An example might be assessing the packaging process for a company's product and updating the procedure to take less time.

  • Strategy and planning: Operations managers are responsible for high-level strategizing and planning. Strategies could include identifying departments or specific processes within departments that require overhauling and then delegating the review of that process to people on the operations management team.

  • Cross-departmental interaction: Operations managers interact with all departments in a company. The department of operations management is one of the few cross-departmental positions in most companies. Because of this, operations managers must understand or have experience in all areas of business. Many operations managers work in several departments before eventually graduating to the role of operations manager.

Related: Using Performance Management in the Workplace

Operations management skills

Operations management requires many skills, but the most important are:

  • Strategy: Operations managers must strategize the best ways to maximize profit. This might involve goal prioritization, delegation or implementing a new process.

  • Mathematics: Many of an operations manager's responsibilities rely on strong math skills. Operations managers are often called on to quantify the value of a business practice or process.

  • Understanding processes: Operations managers must understand how a process functions generally as well as the specific processes of their organization. If the operations manager is tasked with creating a new process, they must be able to include all the necessary steps.

  • Coordination: Coordinating efforts internally and externally is an important skill for operations managers. This might include managing product delivery to a retail location or coordinating schedules for various departments within the organization.

  • Logistics: Operations managers must think logistically. Logistics applies to processes and labor within the company and external logistics with company stakeholders.

  • Organization: Operations managers must be highly organized. The job requires oversight of many departments and functions, so keeping projects and details separate is vital.

  • Process management: There are several different styles of process management operations managers can employ. Business process management involves designing, modeling, analyzing, monitoring and improving or automating various processes within the company. Reengineering involves recreating a process rather than redesigning it. Six Sigma's DMAIC involves defining a problem, measuring the process, analysis of the problem, improvement of the process and creating a control process to see if the new method works. Supply chain management involves monitoring all stops on the supply chain process for efficiency.

Related: Management Skills: Definition and Examples

Education for operations managers

Education is vital to becoming an operations manager. If you are interested in becoming an operations manager, apply to a college or university that offers a degree in business administration. This degree will provide the necessary foundation to begin work in a business setting.

After completing an undergraduate degree in business administration, some people choose to go into the workforce. It is possible to advance to an operations management role with enough time and experience. However, going back to school and earning an MBA in operations management ensures you have the necessary skills to immediately work as an operations manager.

Some MBA programs in operations management allow for further specialization in things like logistics or supply chain management. Specialization can be helpful if there is a specific industry you want to work in that requires a high degree of specialization.

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