“Operation function” is a core, probably the core, responsibility of upper management of an organization. To the extent that a single individual or office is responsible for the management of an entire business enterprise, this is it. Operations management is responsible for the visualization of strategy and a key function of operations management is the realization of that strategy through planning and oversight of each phase of a manufacturing and distribution process.
That planning and oversight includes verification that budget figures balance or, if calculated, that anticipated (presumably short term) deficits are accounted for with the anticipation of a balance at the end of the organization’s fiscal year. That means that careful—almost to the point of prescience with respect to market conditions months or years down the road—consideration has to be given to possible changes in the environment in which the business in question is operating. No business could have anticipated the global economic meltdown that we are currently experiencing due to the rapid spread of a virus.
In addition to budgetary considerations, operation functions include planning and oversight of the actual manufacturing and distribution processes. This is the real heart of the issue and the reason those vested with responsibility for operations management sit at or near the top of the organizational chart. We are talking about processes that involve everything from planning each step of the manufacturing and distribution processes, what materials need to be purchased from other businesses or vendors, and how costs associated with those acquisitions might be accurately determined.
While contracts (excluding the kind of “cost-plus” contracting routine among government agencies in which unanticipated increases in material and labor costs are calculated into the final numbers) lock in the dollar amounts, obstacles can arise, such as disruptions to shipping and storage capabilities (e.g., labor strife, natural disasters that close down ports of entry/exit, warehouse fires or floods, etc.). Operations functions include management of the movement of material and manufactured goods through the organization and, once the finished product is palleted and awaiting distribution to customers, management of that final process. Ensuring that the right product in the right quantity and at the expected quality are transported to customers is obviously an essential part of the process, and one executed by individuals far down the line.
“Operations function” represents a vast category of business activity. Those responsible must be cognizant of changes in the market and developments in the designing and manufacturing of goods and services. Failure to implement needed changes in a timely manner, such as plant recapitalization and upgrades of software programs, can result in lost business.
The operations wing of a company is where the work gets done. Without the operations function, a strategy is just a theory or a goal that will never get put into place or be made a reality. To answer this question in more depth, I will use the example of a factory that makes shoes. Let’s say for example that the owners...
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and managing directors were to decide that in order for the business to remain profitable, an extra 1,000 pairs of shoes would need to be made every month. Making an extra 1,000 shoes per month is the strategy, and it will be the job of the operations team to actually make the extra shoes.
A second example would be a marketing company that wanted to launch a new campaign. Strategists and account managers can sit in meetings for days on end to discuss the new campaign, but if there is not a team waiting to carry out the operation function, then all this time in the boardroom would be a waste.
To put this another way, the operations wing of any company consists of the people who turn ideas into realities, who manufacture the goods and run the processes that make the company money.
Operation function is the core of what a business does. Whether the business is providing services, selling goods, researching, or producing products, operation function is the substance of the entire institution. Any reasonable strategy has to be about managing the operations function, supporting it, and/or knowing if it's time to shift focus and create a new operations function.
If a company is producing candles, for example, its strategy might include marketing its candles, determining what scents are likely to sell well, determining how to best source materials and produce candles efficiently, and managing its workers and its public image.
The operation function is at the heart of it all. How a company should relate to its workers is tied up in what kind of workers they are, which is determined by the operation function. Since an operation function determines what a company produces, it is also the basis for marketing.
Business operations and strategy have a synergistic relationship that is crucial to the development and objectives of an organization. To clearly see how they fit together, it is important to have an understanding of operations management (OM).
As the essential primary function of every organization, OM is the force that drives the manufacture of goods and services. This involves forecasting, shaping, managing, and supervising the various resources required to create and generate a company’s goods and/or services. These resources range from staff and equipment to technology and data.
An operations strategy outlines the purpose, function, and usage of resources to support the business strategy. It specifies facilities requirements such as location, size, and type; the employee skills and experience that are necessary; the technology, equipment and procedures needed; and techniques required to guarantee quality control. Therefore, in order for an organization to meet its goals, it is essential that this operations strategy is supported and coordinated with the company's overall business strategy.
Operation function is the term used to describe how the core operation of the organization is designed and functions. In manufacturing it is how the raw materials are transformed into a useable product. In sales, it is how the products are received and presented to the purchasing public.
Operation function is important because it is the basis for the business. While it is the basis it is not necessarily the most important but other processes should be subjugated to the operation function. This means the other aspects of the organization must be formed to benefit the operation function. This does not preclude the operation function from benefiting other aspects of the organization.
When implementing the strategy of the organization, the question becomes how to best benefit the operation function to achieve profitability. This means marketing strategies, hiring authority and financial planning must be focused around the operation function. For example, if the operation function is receiving raw wood and building cabinets the other functions need to support that mission. Sales should be designed to focus on the pros of this type of custom cabinetry. The hiring authority should focus on hiring people capable of making the cabinets and financial support should attempt to find cheaper ways to get the materials.
However, the operation function can change over time if needed. Suppose it becomes more profitable to produce tables. The operation function then becomes subordinate to the strategy and must alter its ability from producing cabinets to producing tables.