The Purpose of Operations Management (DP IB Business Management)

What is Operations Management?

• Operations management focuses on designing, controlling and improving the processes used in the production of goods and services

  • It involves overseeing the entire production process, from acquiring raw materials to delivering the final product/service to customers

• The goal of operations management is to ensure that the production process is efficient, cost-effective and meets the desired quality standards

  • It involves making decisions related to production planning, stock management, resource allocation, scheduling and quality control

Diagram: operations management tasks

1. Designing and improving processes

• Operations managers analyse existing processes and find ways to optimise them

  • They may use tools and techniques such as process mapping and lean production to identify inefficiencies and eliminate waste

2. Capacity planning

• Operations managers determine the production capacity required to meet customer demand

  • They analyse historical data and market forecasts to ensure that the production resources are adequate to fulfil orders in a timely manner

3. Stock management

• Operations managers are responsible for managing the stock levels of raw materials, work-in-progress and finished goods

  • They aim to minimise costs while ensuring that enough stock is available to meet customer demand and allow the production process to continue without running out of resources

4. Supply chain management

• Operations managers work closely with suppliers to ensure the timely delivery of raw materials and components

  • They establish relationships with suppliers, negotiate contracts and monitor supplier performance to ensure a reliable supply chain

5. Quality control

• Operations managers implement quality control measures to ensure that the products/services meet the required quality standards

  • They develop and enforce quality assurance processes, conduct inspections and address any quality issues that arise

6. Continuous improvement

• Operations managers strive for ongoing improvement in processes, productivity and efficiency

  • They identify opportunities for innovation, implement new technologies or techniques and encourage a culture of continuous improvement (Kaizen) among employees

7. Scheduling and logistics

• Operations managers develop production schedules and coordinate the flow of materials, equipment and labour to ensure smooth operations

Operations & the Production of Goods/Services

• Operations management does not only focus on the production of tangible goods/services in the secondary sector

  • It is equally applicable in the primary, tertiary and quaternary sectors  

• The input-output model is a simple explanation of the operations process

Diagram: the input-output model

 Examples of the Input-Output Model in Different Sectors

Operations & Sustainability

• Sustainable operations management involves integrating sustainability practices into all aspects of the operations management process, from sourcing materials to delivering products

• There are three elements to sustainable operations management

Diagram: sustainable operations management

• There are a range of ways to improve sustainability in operations management

Examples of Sustainability Practices in Operations Management