What are operations departments?
An operations department manages day-to-day business activities to help your organization meet efficiency and growth goals. It ensures the company implements streamlined production processes from start to finish.
The operational structure of a company impacts how the department functions and which employees are involved. Operations managers generally strategize to improve the production process by looking at:
- Manufacturing plant size and layout
- Production processes
- Information technology networks
- Project management structures
- Logistics and supply chain management
- Quality control
- Customer service
The operations department’s decisions may rely on data from various sources. The team examines customer demand and internal processes, and trends within the industry may also impact decisions.
Purpose of the operation departments
Operation departments aim to improve processes to make the company’s efforts purposeful and profitable. It can help minimize waste by controlling operating costs and allocating resources properly.
Operations departments assess key resources needed to improve results, including:
- Facilities: The type of commercial space you have can affect how well you can implement production processes. An operations department might evaluate the facilities to determine whether changes need to be made to the structure itself or the location of your business.
- Staff: Having a team with the right talent and skills can support efficient operations. The operations department might perform assessments to identify performance gaps and recommend improvements.
- Equipment: Team members may need specific tools and resources to help them perform their jobs well. Examples can include production equipment, software programs, office equipment and safety gear.
Key functions of operations departments
An operations department often performs various tasks to increase company profits. These may include the following:
Forecasting business demands
Predicting demands for your products or services can inform production-related decisions. The operations department often analyzes trends and reviews data to forecast how production can be adjusted to meet fluctuating demands.
Forecasting can also help the team identify potential barriers. This information helps the company find proactive solutions to avoid or minimize the impact of those situations.
Providing resources
The operations department may collaborate with the human resources (HR) department and other departments to allocate resources that improve efficiency and quality. The department may need to prioritize resource allocation to comply with budget constraints.
Optimizing business processes
Refining business processes may help improve employee performance and increase company productivity. Evaluating the existing processes could identify ways to reduce steps, minimize delays and improve collaboration.
The operations department might also develop standard operating procedures (SOPs), which establish consistent business practices.
Enhancing departmental performance
An operations department may track performance related to processes. Operations team members might establish internal reporting processes for each department to evaluate current performance and guide changes that might improve results.
Ensuring compliance
An operations department can help all departments understand the guidelines and regulations that apply to their business activities. This can be essential for companies in highly regulated fields, such as healthcare and energy.
Building a consensus among employees
A company can improve operations when the leadership team agrees on changes to production. Then, they inform the rest of the company about the changes and how they affect work processes.
Best practices for managers
An operations department can help improve the productivity of employees with the following best practices.
Purchase updated equipment
Coordinating with managers can help the operations team determine what type of equipment or technology may improve efficiency. It can be helpful to assess the productivity of employees and how they use technology to execute tasks.
During your evaluation, you might also consider ways to streamline the shipping, receiving and production of raw materials.
Streamline employee communication
Effective company communication processes can help team members share critical information and improve workflows.
It may be helpful to purchase project management software that can integrate communication between managers and employees within one system.
Improve financial processes
The operations department may oversee the company’s overall budget and departmental budgets related to production. This can help determine where the company should invest money to support desired outcomes.
Allocating funds to important expenses, such as product development, salary increases, benefits and updated equipment, can help improve your company’s operations. For example, accounting software puts all transactions in one place and allows the accounting and finance departments to focus on documenting financial performance.
Offer employee training opportunities
Employee training can help maintain employees’ performance and help them learn new skills that potentially enhance your company’s operations. It’s a way of investing in your employees to help improve retention, which can minimize disruptions to productivity.
FAQs about operations departments
What influence does an operations department have on employees?
An operations department can impact how an employee or team performs their duties. Operations managers might establish the processes team members follow during production. They can also provide employees with tools and resources to improve efficiency.
Other positive effects the operations department can have include improving the communications infrastructure, buying new equipment and training employees.
Do all companies have an operations department?
Most businesses can benefit from established operational processes to maximize performance. Not all companies have a separate, established operations department, but they still perform operations management tasks.
In a smaller organization, the business owner, general manager, manufacturing manager or another leadership team member may handle operations management duties.
What is the difference between an operations department and an administrative department?
These two departments generally have different duties that overlap and enforce company success. While operations departments focus on daily activities and ways to streamline company procedures, administrative departments help support those initiatives. For example, they may manage the recordkeeping of SOPs created by the operations department.
