Main job roles in operations management include Director of Operations, Operations Manager and Plant Manager. Essentially, Operations Manager is aiming to produce goods and services of the required quality, in the required quantity, at the time needed and in the most cost-effective way.
Operations Manager has direct experience of the economies of scale or diseconomies of scale that may take place on the factory floor. And, he may help identify some of the strengths and weaknesses of the organization that other departments would not necessarily know about. For example, machinery obsolescence or likely costs of maintenance in the foreseeable future. That is why Operations Manager must work with other departments in a business.
This is Jeff, Operations Manager for a paper roll company. He has experience with economies of scale and came up with The SWOT Analysis to identify strengths and weaknesses of the operation. Other departments just ‘do their job’, but Jeff knows when machines become obsolete and must be replaced.
FINANCE: As Operations Manager, Jeff knows about different types of costs (Variable Costs (VC), Semi-Variable Costs, and Fixed Costs (FC)) that could be cut which might have a positive impact on Break-Even Point (BEP) and Margin of Safety. If he needs to replace a machine, he will have to work with purchasing in the finance department to figure out a source of financing. Changing production method will have an impact on stock control, which affects costs. Changes may take time and could interrupt current production, causing delays in the working capital cycle. Any change will need financing, whether it is short term or for significant developments that may require major long-term funding.
HUMAN RESOURCES (HR): Operations Manager can suggest which forms of non-financial rewards (such as job rotation or teamwork) may be suitable, or not, for the organization. The HR manager may not appreciate the fact that some forms of motivation may be very good in theory, but not in practice. The HR manager will have a discussion with Jeff because they will not always agree on the types of rewards that work best. He will also request trainings as needed. Some workers may have to be redeployed, retrained, or even let go, so human resources would need to be carefully managed. Refining the roles and responsibilities of workers and middle managers would require careful planning.
MARKETING: As Operations Manager, Jeff may know whether, or not, extension strategies for certain products are worth it. The marketing manager might have ideas that, in Jeff’s book, could result in diseconomies of scale. Production runs can reflect the orientation of a business as well as the choice of product available to the consumer, so the image or perception of the business may be altered. Distribution channels may be affected, which may lead to differing response times. Changes in costs of production could be passed on to the consumer through changes in price which are likely to mean an increase, at least in a short term, to pay for the transition costs.
It is important the you understand that operations are not just about ‘doing and delivering’ despite the negative image that operations may have. Operations management is an integral part of the entire organization and its decision-making process.
