The Importance of Operations Management

While the ever expanding online space welcomes thousands of new entrepreneurs each year the importance of operations management remains critical. That said, the more astute business person will want to know the difference between supply chain and operations management. Often, however, there is little difference between the two organizational concepts. The most succinct difference is the end product itself. Operations management involves actual product production. In other words, think of supply chain as how you get a product from point A to point B while operations management concerns how you make it. My Fulfillment Company has a useful blog section, click here for a recent post about supply chain.

Operations Management Overview

For larger enterprises the roles of supply chain and operations manager are usually separated; however, for smaller to mid-sized businesses professionals may have to wear both hats. Whether production facilities are domestic or international, liaisons direct and coordinate both product production and distribution as well as sales and pricing. Moreover, an operations manager will work with a company’s chief financial officer on other metrics indirectly associated with productivity, efficacy and performance. Performance data analysis is mission critical for cost control economics.

Just as supply chain managers have responsibilities in warehousing and distribution, operations managers are equally liable for raw goods storage. Unlike supply chain managers who generally focus on finished products engineered for storage, operations managers are more often dealing with perishable items. Product forecast and customer demand also play a role in operations management.

Operations Management Benefits

Like vertical integration, companies become more competitive when employing a strategic operations management plan. The importance of operations management is clear when the benefits directly affect the bottom line. Enterprises that control multiple levels of production have a better advantage at reducing operation cost, a major concern for operations of all sizes. Next, productivity, resource allocation of both employees and raw goods. Another major benefit of understanding the importance of operations management is product quality. Merchants can ask for higher prices if the product is of superior value and / or performance. Finally, customer satisfaction also falls under the job description of an operations manager. The brand reputation begins and ends with customers who are more empowered now than ever with online reviews.

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