Operation Management (OM) is a field of management that focuses on planning, designing and controlling business processes to ensure the effective and efficient production of commodities. In the manufacturing industry, OM oversees the transformation of raw materials into finished products. The main objective of OM in manufacturing is to ensure products are manufactured at low cost, on time, and efficiently while maintaining quality standards (Wolniak, 2020). This effectiveness involves managing machinery, materials, and labor to ensure they are used correctly. Additionally, OM in manufacturing involves managing stock levels to ensure that input, work-in-progress, and output products are maintained at optimal levels. This process requires an understanding of demand patterns and lead times and the ability to predict future demand accurately.
Nonetheless, OM is involved in manufacturing through quality control. Quality control is implementing processes to ensure goods meet specified quality standards. This control may include inspecting raw materials before they are used, carrying out in-progress inspections, and testing end products before they are distributed to the customers. Moreover, OM in manufacturing involves managing the supply chain. The supply chain involves negotiating contracts with suppliers, sourcing raw materials, and managing relationships with third-party logistics providers (Wolniak, 2020). Effective supply chain management ensures that materials and products are delivered at the right time, place, and lowest cost. Therefore, OM in the manufacturing industry involves managing inventory, resources, supply chain, and quality control to ensure adequate production of resources.
Relevance of Operations Management in the Service Industry
Operations Management is also relevant in the service industry as it manages the processes that deliver client services. The service industry is considered any business that offers services to customers such as hospitability, banking, retail, IT, health, and education. In this industry, OM involves managing the processes that transform inputs such as technology, labor, and equipment into outputs such as customer satisfaction and experiences. One of the significant importance of OM in the service industry is managing customer demand. Unlike in manufacturing, where demand can be predicted based on historical data, predicting demand in the service industry is challenging. Therefore, effective OM in the service industry requires a business to balance customer demand with available resources, such as facilities, equipment, and staff, to ensure customers receive timely and quality service.
In addition, OM in the service industry involves managing the workforce. In various service industries such as hospitality and healthcare, the workforce is a vital input in the production process. OM professionals are responsible for managing staffing levels, training, and scheduling to ensure it is efficient, skilled, and productive. Moreover, OM is used in quality control in the service industry. It ensures that services are offered to customers in a reliable, high-quality, and consistent manner. Quality control involves monitoring service delivery, measuring customer satisfaction, and implementing improvements to enhance service quality. Lastly, OM is used to manage the supply chain in the service industry. It manages the relationships with suppliers of equipment, technology, and other inputs and the logistics of delivering services to customers.
Operations Management in Hospitality
Operations Management is essential for the success of the hospital industry. It helps manage lodging, food, and entertainment processes that deliver customer services. Effective OM in hospitality industries ensures businesses operate efficiently, gives clients a high-quality experience, and maintains a competitive edge. Operations Management professional manages customer demand which varies significantly based on events, seasons, and other factors. For instance, a hotel may experience increased demand during a holiday (Mercan et al., 2021). A business can provide quality and timely services by accurately predicting demand and managing resources such as inventory, staff, and equipment. Moreover, the hospitality business depends heavily on its employees to deliver quality client services. OM professionals manage staffing levels, scheduling, training, and performance to ensure the workforce is skilled, productive, and efficient. For instance, a hotel may hire seasonal staff during summer to manage high demand and improve customer service.
Moreover, OM is critical in the hospitality industry for quality control. Customers in hospitality expect high-quality experiences, and OM professionals must ensure that services are reliable and consistent. For instance, a hotel may implement a quality control program to ensure rooms are cleaned to a high standard or conduct regular taste tests to ensure high-quality food. Lastly, OM helps hospitality businesses with facilities and equipment management. For customer satisfaction, OM professionals must conduct maintenance repairs, schedules, and upgrades to ensure equipment and facilities are running correctly. For instance, a hotel can regularly check heating and cooling systems to ensure comfortable guest rooms (Mercan et al., 2021). Therefore, OM helps the hospitality industry to manage customer demand, workflow, quality control, and facilities and equipment.
Operations Management in Banking
Operation management is a crucial aspect of the banking industry, encompassing planning, organizing, monitoring, and controlling processes involved in delivering financial services. The primary function of operation management in banking is to ensure quality customer service. OM help design and implement customer-centered processes that meet their needs (Girling, 2022). It puts processes in place to help banks promptly address customer inquiries and complaints. Additionally, operations management helps banks to conduct risk management. Banks operate in an environment with numerous risks, such as market, credit, and operational risks. Banks can protect their assets and risk exposure by implementing risk management processes.
Moreover, OM helps the banking industry with efficiency and cost management. By optimizing processes, banks streamline operations, reduce waste and improve productivity. This move results in cost saving which is passed on to customers through lower fees and better rates. Lastly, technology plays a significant role in operations management in banking. Automated systems in tasks such as account opening, loan, and transaction processing help reduce cost, enhance customer experience and improve efficiency (Girling, 2022). Data analytics also improves decision-making by offering insights into customer behavior, operational performance, and market trends. Therefore, operation management is a vital aspect of the banking industry.
Operations Management in Healthcare
Operations management is essential in healthcare by managing resources and processes efficiently and effectively. Healthcare is a complex and rapidly changing industry that require careful planning, monitoring, and management of processes and activities. OM achieves these goals by reducing waste, optimizing processes, improving patient outcomes, and enhancing the quality of care. Operations management plays a vital role in healthcare process improvement. Lean Six Sigma methodologies are commonly used to reduce waste and streamline processes, improving patient efficiency (Khorasani, Cross & Maghazei, 2020). For instance, hospitals may use Lean Six Sigma techniques to reduce wait times, improve patient flow, and optimize the use of resources such as equipment, staff, and equipment. By improving processes, healthcare can reduce costs, increase patient satisfaction, and enhance the quality of care.
Moreover, operations management is used in capacity planning in healthcare. Hospitals must predict the demand for services and plan their capacity accordingly. This capacity planning involves projecting future demand, evaluating the needs of patients, and ensuring the proper resources are put in place to match patient needs. By appropriately managing capacity, healthcare can ensure patients receive the best care without overburdening staff with other resources (Khorasani, Cross & Maghazei, 2020). Furthermore, OM is used in Quality management in healthcare. Quality management involves improving and monitoring the quality of care offered by healthcare facilities. It may involve identifying areas for improvement, implementing changes, and monitoring outcomes. Lastly, OM is used in healthcare facilities to manage risk. Healthcare must identify potential risks, develop mitigation strategies and monitor the effectiveness of those strategies. Healthcare can ensure the safety of patients, staff, and other stakeholders by effectively managing risk. Therefore, operations management is critical in healthcare as it helps optimize processes, reduce waste, and improve patient outcomes.
Operations Management in Education
Operations Management is now used in the education industry to improve the effectiveness and efficiency of educational processes. First, operations management is used to carry out effective resource allocation. Resource allocation involves managing budgets, staffing, and facilities to ensure resources are used effectively and efficiently. Operations management helps educational facilities identify inefficiency or waste in resource allocation, enabling schools to streamline their operations and optimize the available resources. For instance, schools can use data analytics to track the use of resources like faculty time and classroom space to discover areas of underutilization and make adjustments (Savignac et al., 2022). Moreover, operations management optimizes course scheduling and ensures that classrooms and other facilities are used to their fullest potential. Learning institutions can use data analytics to track patterns and trends in course demand and student enrollment and then design schedules that accommodate those needs. Course scheduling ensures that students can access the courses they want and that faculty members can effectively teach and manage their time.
Nonetheless, OM is used in curriculum development to ensure effective, efficient, and well-designed courses. Curriculum development involves designing a clear learning objective, practical assessments, and using data analytics to monitor student progress and adjust the curriculum. It ensures that educational programs are aligned with student needs and the demand in the job market. Lastly, operation management improves student services such as career services, academic advising, and student support. It helps learning institutions streamline processes, provide personalized student support, and improve communication channels (Savignac et al., 2022). This student service ensures that students are well-supported in their academic journey to succeed academically and professionally. Therefore, operations management helps educational institutions improve process effectiveness, efficiency, and quality.
Operations Management in IT
Operations management is a fundamental discipline in the IT industry as it helps organizations manage their technology resources, processes, and people to deliver services that meet customers’ demands. First, operations management helps manage the infrastructure supporting technology systems such as software, hardware, databases, and networks (Benjaafar & Hu, 2020). IT Infrastructure management involves ensuring infrastructure availability, performance, and security and resolving issues that may arise. It also involves planning and implementing upgrades and enhancements of the infrastructure to remain up-to-date and meet the organization’s needs. Additionally, operations management is used in IT to manage IT services. These services involve managing the IT lifecycle from design, development, deployment, operation, and continuous improvement. IT service management focuses on meeting customer needs and ensuring that IT services are delivered effectively and efficiently.
Furthermore, operations management is used in the IT industry in incident management. Incident management is identifying and responding to incidents that occur with IT systems and services. It also involves coordinating the incident’s resolution, communicating with the stakeholders about the incident’s status, and implementing measures to prevent similar incidents from occurring in the future. Nonetheless, OM helps the IT industry to carry out change management. Managing changes in IT systems is vital as it ensures they remain up-to-date and meets the changing organization’s needs. Effective change management is vital in minimizing the risk of disruptions to IT services and ensuring changes are implemented in a systemic and controlled manner (Benjaafar & Hu, 2020). Lastly, operations management is essential in performance management in the IT industry. Performance management involves monitoring system performance, identifying and resolving performance issues, and reporting system performance to stakeholders. Therefore, operations management is vital to the IT industry as it helps organizations manage their technology resources, processes, and people to ensure practical and efficient IT services.
Differences between Operations Management in the Manufacturing Industry and the Service Industry
Operations management is a crucial component in any business involving producing and delivering goods and services. Although the core principles of OM are the same for all industries, there are significant differences in how OM is applied in manufacturing and service industries. The first significant difference is that the manufacturing industry deals with tangible products such as electronics, cars, and appliances (Reddy, 2020). On the other hand, the service industry deals with intangible products such as healthcare, hospitality, and banking. Secondly, in manufacturing, the production process is a sequential process where raw materials are transformed into finished goods. In contrast, the production process in the service industry is a concurrent process where customers and service providers interact to develop the service experience.
Nonetheless, the two industries differ in their quality control measures. In manufacturing, quality control focuses on the product through tests and inspections in different stages of the production process. In contrast, quality control in the service industry focuses on customer satisfaction and service experience. Feedback from service providers and customers is used to improve service quality and meet customer needs. Moreover, in the manufacturing industry, inventory management focuses on managing the flow of raw materials, work-in-progress, and finished goods (Reddy, 2020). In servicing industry, inventory management focuses on managing the available service provider and scheduling appointments. Therefore, companies in the manufacturing industry need to focus on managing their production processes, while companies in the service industry need to focus on managing their customer service processes.
Similarities of Operations Management in the Manufacturing Industry and the Service Industry
There are several similarities between operations management in the manufacturing industry and the service industry. First, both industries require improving and designing processes to ensure efficiency and effectiveness. This process involves identifying the necessary inputs, transforming them through operations, and producing the desired outputs (Reddy, 2020). Secondly, capacity planning is an essential aspect of OM in both industries. It involves predicting demand, determining the resources needed to meet it, and managing those resources effectively. In addition, both industries make use of quality control. In manufacturing, quality control ensures that products meet customers’ specifications and are defect-free. In the service industry, it ensures service delivered meets customer expectations and is of high value.
Conclusion
In today’s highly competitive business environment, operations management has become an essential aspect across a wide range of industries. In hospitality, for instance, operations management focuses on delivering high-quality services that meet customers’ expectations and ensure efficient resource use. Similarly, operations management plays a critical role in managing financial transactions, maintaining security, and providing exceptional customer service in the banking industry. Nonetheless, operations management in IT ensures that technology is used effectively to support business processes and drive innovation. In health and education, operations management is crucial to managing complex systems, ensuring patient or student safety, and delivering quality services. By adopting effective operations management, businesses can improve their efficiency, reduce costs, and enhance their overall performance. Therefore, investing in operations management can give businesses a competitive edge and enable them to meet their strategic goals.
References
Benjaafar, S., & Hu, M. (2020). Operations management in the age of the sharing economy: What is old and what is new? Manufacturing & Service Operations Management, 22(1), 93-101.
Girling, P. X. (2022). Operational Risk Management: A Complete Guide for Banking and Fintech. John Wiley & Sons.
Khorasani, S. T., Cross, J., & Maghazei, O. (2020). Lean supply chain management in healthcare: a systematic review and meta-study. International Journal of Lean Six Sigma, 11(1), 1–34.
Mercan, S., Cain, L., Akkaya, K., Cebe, M., Uluagac, S., Alonso, M., & Cobanoglu, C. (2021). Improving the service industry with hyper-connectivity: IoT in hospitality. International Journal of Contemporary Hospitality Management, 33(1), 243-262.
Reddy. (2020). Service operations vs. manufacturing operations. Small Business – Chron.com. https://smallbusiness.chron.com/service-operations-vs-manufacturing-operations-25843.html
Savignac, P., Petitdemange, E., Oger, R., Lauras, M., & Gac, J. (2022, June). Toward an Educational Supply Chain Operations Reference Model. In 2022 IEEE 6th International Conference on Logistics Operations Management (GOL) (pp. 1-10). IEEE.
Wolniak, R. (2020). Main functions of operation management. Production Engineering Archives, 26(1), 11–14.
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