Understanding Operations Management: The key to driving business efficiency and growth
Operations Management (OM) is at the heart of every successful business. It is the process of planning, organising, and supervising the production, manufacturing, and delivery of products and services. From a simple production line to a vast network of supply chains, operations management ensures that businesses run efficiently and effectively, meeting customer needs while optimising costs.
What is Operations Management?
At its core, operations management is about creating the highest level of efficiency within an organisation. It involves the transformation of raw materials and resources into finished products or services in the most cost-effective manner. This includes managing all aspects of the production process, from product design and procurement to supply chain logistics and quality control.
The scope of operations management has significantly evolved over the years. Traditionally, it involved managing a few products in a stable market environment. For instance, companies like Ford initially focused on producing a single product, such as the Model T. However, as the market landscape has grown more complex, so too has the role of operations management.
Today, large conglomerates like Hindustan Unilever Limited (HUL) handle hundreds of brands, each with multiple variants, while industrial giants like Tata Steel manage thousands of products across various production units. The product mix has become exceedingly intricate, requiring robust systems and advanced tools to manage these complexities.
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The rise of complexity in operations
The evolution of the marketplace has seen a dramatic increase in the number of products and the complexity of supply chains. Take the example of a company that once had a single product and 100 distributors. The operations were straightforward: one product, 100 orders, and 100 deliveries a month. But with the expansion of the product range to 1,000 different items, and the customer base growing to 1,000 distributors plus end consumers through company-owned stores, the complexity grows exponentially. If each distributor orders 50 products each month through 50 orders, the number of transactions balloons to 2.5 million orders per month. This requires sophisticated management systems to handle such volume effectively.
Similarly, consider the case of e-commerce giants like Amazon and eBay, which offer millions of items on their platforms. The sheer scale of their operations is staggering, necessitating a high level of operational efficiency to manage inventory, orders, and logistics. For instance, managing logistics for 2.5 million orders a month, even with a 1:100 compression ratio, would still require around 2,500 trucks. The dynamic nature of the market demands a flexible and responsive operations management strategy to ensure that customers receive their orders accurately and on time.
Impact of e-commerce and digital transformation
The advent of e-commerce has revolutionised operations management, introducing new complexities and opportunities. With platforms like Amazon, Flipkart, and eBay offering millions of products, traditional logistics models are being challenged. The demand for large, tonnage trucks has reduced, giving way to smaller vehicles like Tata Ace, Mahindra Maximo, and tempos. Additionally, the rise of drone technology and other innovative solutions is transforming the logistics landscape.
Operations management is also seeing a shift towards more digitised and integrated systems. As companies expand their product ranges and customer bases, there is a growing need for real-time data and analytics to manage inventory, predict demand, and optimise supply chains. Digital tools such as AI, machine learning, and IoT are becoming crucial in managing these complex operations effectively. The future of operations management will be characterised by highly specialised roles that require a broad knowledge base, making it essential for businesses to adopt digital transformation strategies.
The new paradigm: Value stream management
Operations management is evolving into a broader concept known as Value Stream Management (VSM). Unlike traditional operations management, which focuses on specific functions such as finance, HR, or logistics, VSM takes a holistic view of the entire value chain. It aims to deliver value to customers through a seamless network of interconnected systems and processes. This requires a deep understanding of multiple disciplines, from supply chain management and digital transformation to customer experience and sustainability.
The shift towards VSM reflects the changing demands of the marketplace, where customers expect seamless experiences and quick, efficient service. By adopting a value-driven approach, businesses can create competitive advantages, enhance customer satisfaction, and improve overall profitability. As companies move towards this new paradigm, the demand for skilled professionals with expertise in operations management and related fields is expected to rise.
Why should you consider a management programme specialising in Operations Management?
Given the growing importance of operations management in the modern day business, a management programme that focuses in this field can be a highly rewarding career path. The programme equips students with the skills needed to oversee and optimise the production and supply of goods and services. It covers various aspects such as supply chain management, inventory control, production planning, and quality assurance.
Over the past decade, the demand for professionals with expertise in operations management has grown significantly. Major companies worldwide recognise the need for a specialised operations department to manage their complex production and supply chains effectively. A management programme in operations management also serves as a gateway to consulting roles, where specialists are hired to optimise clients’ operations and supply chain processes.
The salaries for professionals in operations management are highly competitive and experience-centric. As professionals gain expertise, they can expect substantial salary increases and more opportunities for advancement. Moreover, the field offers diverse career paths across various sectors, such as automotive, consulting, IT, and retail, providing ample opportunities for growth and international exposure.
What are the career opportunities for professionals specialising in Operations Management?
A management programme that provides exposure to Operations Management opens doors to various career opportunities, including roles such as:
- Operations Manager
- Plant Manager
- Process Manager
- Supply Chain Programme Manager
- General Operations Manager
- Inventory Control Manager
- Technical Operations Manager
Which are the top B-schools in India that provide exposure to Operations Management?
India offers several prestigious management programmes specialising in operations management. Some of the top institutions include:
- XLRI, Jamshedpur
- SPJIMR, Mumbai
- SIOM, Nasik
- IIM, Lucknow
- SJMSOM, IIT Bombay
- NMIMS, Mumbai
- ISB, Hyderabad
- Taxila Business School
Programmes like the Post Graduate Programme in Management (PGPM) from the S.P. Jain Institute of Management and Research (SPJIMR) provides specialised courses in operations management that can provide valuable insights and hands-on experience, positioning managers to drive efficiency and success in their organisations.
What sets SPJIMR apart is that they constantly update their curriculum offerings based on feedback from their recruiters and industry leaders. The AACSB accreditation also helps the institute to do international benchmarking and makes way for continuous improvement of their industry-relevant curriculum!
Watch SPJIMR’s world-class faculty members share their take on its industry-relevant PGPM curriculum.
At the end of the day…
Operations management is a critical function that ensures the smooth running of a business, optimising resources, reducing costs, and improving customer satisfaction. In today’s complex and rapidly changing marketplace, effective operations management is more crucial than ever. As businesses strive to remain competitive and adapt to new market dynamics, the demand for skilled operations professionals will continue to grow. Whether you are looking to streamline a production line, manage a global supply chain, or drive digital transformation initiatives, a career in operations management offers a diverse and rewarding path with significant growth potential.
Welcome to the brave new world of operations management – where strategy meets execution and businesses thrive by delivering exceptional value to their customers.
