Explain the importance/role of operations management across the organization.
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Operations management involves "overseeing, designing, controlling the process of production and redesigning business operations in the production of goods and/or services."
Operations management functions differ depending upon the purpose of the organization. In a manufacturing setting such as a factory, operations management would include designing efficient processes to produce the product, timely acquisition of raw materials, insuring adequate numbers of properly trained workers, and proper maintenance of equipment.
Operations management in a service setting would focus on insuring that workers are adequately trained, that customer service locations are equipped as needed and are safe for employees and the public, that services are revised as dictated by customer input or competitive forces.
While operations management is focused on the production of goods and/or services in an organization, its importance to the overall organization cannot be underestimated. When an organization's operations are properly managed, the functions of all other departments are smooth, and when an organization's operations are managed improperly, all other departments suffer.
A human resources department is able to make good predictions on the need for staff, to develop good job descriptions, and to recruit and train more easily when operations are run well. Jobs are easier to fill, and turnover remains lower. If an operations are not run well, the consequences for human resources are not good. For example, the human resources people cannot develop good job descriptions and requirements for the production department, find it more difficult to recruit and train, and face higher turnover, which is costly to any organization.
An accounting department that is supporting a smooth operation can pay materials and supplies bills promptly since a well-run operation plans ahead. Payroll is easy to handle, with predictable costs. But if the operation is run poorly, predictable costs such as these are difficult to ascertain, making it difficult for the accounting department to do its job well.
A finance department, which is charged with finding capital, either through debt or equity financing, can raise money far more easily with a smooth-running, successful operations division, being able to point to high productivity, trimming of costs, and good scheduling to meet demand. On the other hand, if the finance department can only show a record of inefficiencies, too much or too little inventory, and uneven productivity, it is difficult to raise capital.
The marketing division's success is reliant on successful operations as well. It must have a successful and on-time product or service to market. It must have a product or service that works and that is being produced in appropriate numbers. If it does not, if there is a shoddy product or a product for which production is behind, the best marketing in the world is of little use.
The legal division's ability to support operations is dependent upon a well-managed operation, too. A well-made product does not lead to liability claims. When supplies and materials are planned for, there is less likelihood of contract disputes with suppliers. When products are produced on-time, there is less likelihood of contract disputes with purchaser.
All in all, operations are the heart of any organization that is providing a good and/or a service. When operations are managed well, it makes the function of all other departments easier, and conversely, when operation are managed poorly, all other departments suffer.
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