What is the purpose of operations management?
Effective operations management helps businesses use resources wisely while meeting strategic goals. Its core purpose includes:
- Maximising productivity: Improves processes to increase output with the same resources.
- Reducing costs: Streamlines production and supply chains to cut waste and unnecessary expenses.
- Improving quality: Ensures products and services remain consistent, reliable, and up to standard.
- Enhancing customer satisfaction: Enables timely delivery and better service experiences.
- Supporting long term goals: Aligns day-to-day operations with the organisation’s broader vision.
Importance of operations management
Operations management plays a critical role in the success and sustainability of any organisation. Here’s why it matters:
Benefit
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Description
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Efficiency Boost
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Streamlines workflows and eliminates waste
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Quality Improvement
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Ensures consistent product/service standards
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Strategic Alignment
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Supports long-term business goals
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Working Capital Optimization
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Balances cash, inventory, and receivables
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Supply Chain Strength
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Improves procurement, logistics, and distribution
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Scalability
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Enables growth without compromising quality
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Cost Reduction
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Lowers operational expenses and increases profit
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Customer Satisfaction
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Timely delivery and responsive service
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Innovation
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Drives continuous improvement and adoption of new technologies
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Types of operations management
Type
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Objective
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Task
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Role/Responsibility
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Production Management
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Manage production efficiently to meet demand
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Plan, schedule, and monitor production activities
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Production Manager oversees manufacturing and resource use
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Supply Chain Management
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Maintain a smooth flow of materials and products
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Choose suppliers, manage procurement, and coordinate logistics
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Supply Chain Manager manages inventory, transport, and delivery
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Service Management
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Ensure consistent and high quality service delivery
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Design service workflows and track performance
|
Service Manager trains teams and handles customer issues
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Project Management
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Deliver projects on time and within budget
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Allocate tasks, set timelines, and review progress
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Project Manager coordinates teams and manages resources
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Quality Management
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Maintain high product and service standards
|
Carry out inspections and implement quality control
|
Quality Assurance Manager ensures compliance with quality norms
|
Operations management tools
- Business Process Reengineering (BPR): BPR focuses on analysing and redesigning workflows and business processes within a company. Its goal is to optimise processes, remove redundancies, and improve efficiency. Also called business process redesign, BPR allows organisations to restructure operations from the ground up for maximum effectiveness.
- Six Sigma: Introduced by Bill Smith at Motorola in 1986, Six Sigma is a methodology for improving manufacturing quality. The term “six” refers to control limits set at six standard deviations from the mean. Tools used in Six Sigma include trend charts, defect calculations, and other statistical measures to reduce errors and improve consistency.
- Lean Manufacturing: Lean manufacturing focuses on reducing waste and improving the flow of products across the supply chain. It aims to ensure smooth operations from production to customer delivery, eliminating unnecessary steps and maximising efficiency.What are the systems of operations management?
Modern operations management relies on proven systems and methodologies:
System
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Purpose
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Benefit
|
Lean Manufacturing
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Remove all forms of operational waste
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Lowers costs and boosts overall efficiency
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Six Sigma
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Reduce defects and improve process accuracy
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Delivers consistently high-quality results
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Business Process Reengineering (BPR)
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Rethink and redesign existing workflows
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Improves speed, efficiency, and cost performance
|
Inventory Management
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Maintain optimal stock levels
|
Prevents excess inventory and stock shortages
|
Supply Chain Management
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Manage procurement, logistics, and distribution
|
Ensures seamless movement of goods and timely deliveries
|
Operations management process
The operations process usually moves through five essential stages:
- Forecasting: Estimate future demand using data, patterns, and market insights.
- Planning: Create strategies to meet production targets and resource needs.
- Scheduling: Assign manpower, machines, and materials for timely execution.
- Controlling: Track ongoing activities to ensure everything stays on plan.
- Evaluating: Review outcomes, measure performance, and improve processes.
Techniques for effective operations management
Techniques for effective operations management help businesses run smoothly, cut costs, and deliver consistent quality. Here are the key methods to focus on:
- Production planning: Optimise resources, align output with demand, and prevent stock shortages.
- Inventory management: Monitor stock levels in real time and reorder on time to avoid delays.
- Automation: Boost efficiency, speed, and accuracy by reducing manual effort and repetitive tasks.
- Process streamlining: Strengthen communication, refine workflow layouts, and eliminate bottlenecks.
What is operations strategy in operations management?
Operations strategy ensures that a company's operational strengths directly support its broader business goals. It focuses on long-term planning, resource allocation, and creating a competitive edge through efficient execution.
Aspect
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Focus
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Alignment
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Ensure operations fully support the overall business strategy, whether cost leadership or differentiation
|
Design
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Build efficient processes and systems to maximise productivity
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Capacity and facilities
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Plan resources and facility layouts to meet current and future demand
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Supply chain
|
Strengthen procurement, logistics, and inventory flow for timely delivery
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Quality
|
Maintain consistent standards through continuous improvement practices
|
Technology
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Use modern tools and innovation to reduce costs and enhance performance
|
Performance
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Set measurable KPIs and track progress for ongoing improvement
|
Operations management example
Take an athletic shoe manufacturer as an example:
- Forecasting: Uses past sales data and current fashion trends to estimate demand for the next season’s shoe models.
- Planning & Sourcing: Decides the number of shoes to produce and procures materials like rubber, fabric, and foam from trusted suppliers.
- Scheduling & Production: Plans factory assembly lines across different locations to produce various shoe models efficiently.
- Quality Control: Checks materials, assembly processes, and finished products to ensure they meet durability and design standards.
- Logistics & Delivery: Coordinates the distribution network to ship shoes to retailers globally, ensuring stores are stocked on launch day.
- Process Improvement: Reviews defect rates and delivery performance to refine production and logistics for the next cycle.
Operations and supply chain management (OSCM)
A key part of operations management is managing the flow of inventory through the supply chain, a process often called operations and supply chain management (OSCM). Operations managers focus on logistics, global trends, customer demand, and the resources needed for production.
They ensure that materials are acquired and labour is used in a timely and cost-effective way to meet customer expectations. Inventory levels are carefully monitored to maintain sufficient stock, while vendors are selected based on quality, cost, and reliability of delivery.
Operations managers use tools like the economic order quantity (EOQ) formula to decide how much stock to order and how much to keep on hand. They also follow up with customers to confirm that products meet quality and functionality standards, sharing feedback with relevant departments to drive continuous improvement.
Challenges in operations management
List of a few common challenges in operations management:
Challenge
|
Description
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Supply Chain Disruptions
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Delays from suppliers or external events
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Quality Control
|
Maintaining consistency across batches
|
Inventory Management
|
Balancing stock without overstock or shortages
|
Technology Integration
|
Adopting new systems efficiently
|
Labour Shortages
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Hiring and retaining skilled workers
|
Regulatory Compliance
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Adhering to evolving rules and standards
|
Global Competition
|
Maintaining cost-effectiveness and quality
|
Demand Volatility
|
Adapting to changing customer needs
|
Sustainability
|
Balancing economic and environmental goals
|
Fuelling Operational Excellence with Strategic Financing
Implementing effective operations management often requires upfront investment, whether for automation technology, warehouse management systems, employee training, or maintaining inventory buffers. A Bajaj Finserv Business Loan can provide the capital needed for these strategic improvements, as long as the business meets business loan eligibility criteria such as turnover, credit profile, and operational stability. This funding helps businesses improve efficiency without affecting day-to-day cash flow.
How a Business Loan Supports Operations Management:
- Technology Adoption: Fund ERP or SCM software, automated machinery, or analytics platforms. A business loan EMI calculator can help assess affordability before committing.
- Capacity Expansion: Finance new equipment or facility upgrades to handle growing demand, with repayments structured according to the business loan interest rate.
- Inventory Optimisation: Access working capital to maintain optimal stock levels without straining cash flow or taking on excessive debt.
- Quality & Certification: Invest in quality control labs or fund ISO/Six Sigma certification to improve operational consistency.
With features like quick disbursal (within 48 hours*), high loan amounts up to ₹80 lakh, and flexible repayment tenures, the loan allows businesses to strengthen their operational backbone with confidence.
Conclusion
Operations management is the backbone of business success. It is where strategy is put into action and efficiency improvements directly boost profitability and market position. By applying its principles—such as lean processes, quality control, and resilient supply chains—businesses can create operations that are efficient, profitable, agile, and sustainable in a changing market.
Looking to optimise your business operations? Consider how strategic investments in processes, technology, and resources can drive growth, and explore financing options that make these improvements achievable.
