Operations Management as the Business Function

Subject: Management
Pages: 6
Words: 1617
Reading time:
6 min
Study level: College


Operations management is the business function which deals with resources dedicated to producing and delivering products and services (Pycraft, 2000). Operation managers are responsible for designing and managing organizational products and services. They are also in charge of managing the companies’ supply chains and how the final goods and services reach the intended market.

The scope of operations management ranges from strategic to tactical issues. Strategic issues include things like establishing the size and positioning of production plant, as well as designing the supply chains to be used by the business (Bettley et al, 2005; Lowson, 2002). Tactical issues in operations management include roles such as project management, assets management, scheduling and well as stock management and control. According to Siegel (1999), operations management is regarded as a core organizational function along with marketing and finance.

Challenges facing operations managers today

According to Gareth & George (2011), the dynamic and highly competitive nature of today’s businesses presents several challenges to the modern day operations manager. Analysts believe that today’s operation manager is operating under very interesting circumstances. The markets are becoming more and more competitive while organizational stakeholders’ needs are becoming more and more complex. Strategic alliances are becoming the norm, while more and more businesses are seeking to go international in their operations (Kotler & Keller, 2006).

Culture (Black, 2003) and technology continues to change every day, while the customer’s needs are becoming more and more complicated. More than ever before, businesses are seeking to harness organizational knowledge in order to improve their operations (Slack et al, 2007). The general public is increasingly becoming aware of the roles of the business to conserve its environment, implying that more than ever before, businesses are paying more attention to social responsibility.

Slack & Lewis (2003) have argued that these among other issues, presents a lot of challenges to modern day operations manager. Operation managers can no longer ignore these issues more so given the fact that operations management is on one way or another related to these issues. This implies that there are several challenges facing operation managers in their day to day administration.

For adaptation and survival, operation managers must be creative in their approach (Bettley et al, 2005). One approach to management might work in one organization but might fail to work in another, implying that operation managers must be very flexible in their management approach. It is only then that they will be able to cope with the differing cultures, prevailing economic conditions and the varying customer needs (Gareth & George, 2011). The following are some of the most common challenges facing operation managers today.

Managing People

Human resources are the most dynamic and difficult to manage of all the organizational assets. The modern day operations manager is faced with the challenge of hiring the right personnel and an even bigger challenge of motivating the employee (Gareth & George, 2011). Since labour is the most mobile of all the factors of production, the operations manager is faced with the challenge of retaining the employees. Without the right employees in terms of numbers, skills, qualifications and experience, the business will not be able to achieve its objectives.

Providing leadership to the human resources is increasingly becoming challenging to the modern day operations manager since the employees’ need are sophisticated. The operations manager must strive to create the right work balance policies, appropriate shift schedules, fair compensation, appropriate performance management measures and right motivating factors in order to retain the employees. Achieving the right balance of all these is very challenging

Effective Communication

The other challenge to the modern day operations manager is creating and developing the right channels of communication. Since information is critical in decision making, the operations manager must ensure information is readily available to decision makers at the right time (Gareth & George, 2011). Yet sometimes information does not reach the intended persons in time.

This leads to blame game when issues are not resolved and decisions are not made in time leading to delays. The operations manager must therefore strive to maintain a steady flow of information at all times (Kumar, 2006). This requires the development of effective channels of communication. This requires the operations manager to involve all the interested parties.

Managing change and innovation

Todays’ business environment is characterized by unexpected events. These directly affect the operations managers’ day to day administration. Change is brought about by changing tastes and preferences of consumers, technology and globalization among others (Pycraft, 2000). Coping with change is a nightmare to operation managers because business operations keep changing.

Planning is crucial in the management of these changes. The operations manager must have in place the necessary tools for documenting, depicting and describing the changes real time and efficiently as and when they occur (Kumar, 2006). Equally, the operations manager needs to have clear structures that would see decision making left in the hands of the right people. With the right information meant for the right people, the operations manager will be well prepared to manage change. The operation manager must also be careful when introducing new ways of doing things.

The challenge is normally in overcoming the initial inertia. While some employees will be receptive to the new ways, others are likely to sabotage and fight the change. The operations manager must therefore involve all the stakeholders in order to minimize resistance to change. Effective change management is a strong source of competitive advantage (Lowson, 2002).

Supply chain management

Effective management of supply chains and distribution network is a big headache for modern day operations manager. Especially for big corporations doing international business, the operations manager must think of a way of managing the global distribution of its company’s products (Krajweski & Ritzman, 2005).

The operations manager faces the challenge of deciding between centralization and autonomy when implementing business resource planning initiatives (Lowson, 2002). The operations manager must be careful when choosing the right channels of distributions to ensure they have control of the entire global distribution channels while at the same time allowing the suppliers to have their autonomy (Kotler & Keller, 2006).

Financial Management Controls

Operation managers are faced with the challenge of developing and maintaining effective financial control systems (Gareth & George, 2011). Operation managers must see to it that financial reporting systems are adequate and functioning (Slack et al, 2007). If such reporting systems are not functional, the company is likely to be affected negatively.

For instance, there is likelihood that the company may post inaccurate financial information. The operations manager must ensure that financial reporting systems are updated so that financial statements such as income statement, the balance sheets and statement of owners’ equity are accurate and prepared in time.

Changing Information Technology

The role of information technology (IT) in business cannot be overemphasized. Information technology drives business especially when IT and business objectives are aligned. Yet information technology continues to change day in day out thereby posing a big challenge to the operations manager (Slack & Lewis, 2003).

Having in place a credible operational management framework is very helpful to manufacturing concerns and departmental heads. It enables the business to ensure that there is sufficient hardware and software to meet the needs of the business. Without appropriate information technology infrastructure, the business might not be able to operate competitively and might fail to achieve its objectives (Gareth & George, 2011; Lowson, 2002).


The operations manager equally faces the challenge of regulatory compliance. Modern day business administration involves the need to comply with several legal and administrative requirements (Gareth & George, 2011). The business is expected to comply with legislation relating to issues of taxation, financial reporting, environmental conservation, health issues etc. In fact, regulatory compliance is today regarded as source of competitive advantage.

It is therefore imperative that the operations manager ensures that organizational policies and procedures comply with the directives of top management and other guidelines (Bettley et al, 2005). The operations manager must equally ensure that the policies are in conformance with government directives and industry expectations.

Safety Management

Operations manager must confront the issue of safety at the work place. In an organizational set up, the operations manager must ensure that they put in place safety measures to eliminate any chances of occupational accidents (Kumar, 2006). The net effect of having in place effective health and safety systems is that the business will save on operational losses. The business can significantly reduce regulatory fines and litigation which might occur due to failure of compliance to occupational health and safety regulations (Gareth & George, 2011).


Operations management is the business function that deals with processes, decisions and responsibilities involved in manufacturing products and services. Operation managers play an oversight role as they manage the organizational resources used in the normal course of business (Slack et al, 2007). Operations management is just as critical as other business functions like finance and marketing (Gareth & George, 2011). This paper has established that there are a number of challenges facing operation managers in their day to day administration. This is because the modern day business is very dynamic and competition is very stiff.

Among others, the modern day operations manager is faced with the challenge of managing organizational human resources. The other challenge is that of developing effective communication channels coupled with the challenge of managing change and innovation. Operation managers must implement effective supply chains and must have in place financial management controls (Slack & Lewis, 2003; Krajweski & Ritzman, 2005). The other challenge is that of changing information technology. The operations manager must develop appropriate systems to curb the problem of regulatory compliance. The final challenge facing operation managers is that of safety management.


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