What is Operations Management ?: Definition, Origin, Functions, Importance and MORE

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What is Operations Management? It is about managing the programming, organization, direction and management of the operation of the company. Of course, taking into account that production is the process of passing inputs to finished products. Production, along with marketing, accounting, and finance, are the elements of marketing.

Today we will be explaining everything you need to know about Operations Management. Specifically, its origin, what it is, what its functions are and why it is important to train in this area. Finally, we will tell you the importance of administration. If you’re interested, keep reading!


Let’s start by talking about Origin of Operations Management. This dates back to the 18th century, approximately in the 1700s, when the presence of Adam Smith became apparent with his studies on the division of labour. He indicated that productivity increased when people engaged in a single task (specialized).

Thus, each person played a different role in the industry, achieving higher levels of efficiency as far as production was concerned. Both goods and services. The factories implemented these ideas and saw the expected results.

Babbage and Taylor then promoted their ideas on the scientific organization of work. Babbage specifically proposed a salary based on specialization. These are considered by many people as the creators of operations management, scientific management. Why? Because they presented ideas about the production process.

For the 20th century, in the 1900s the studies carried out by Frederick taylor on working methods and their views on the roles and responsibilities of workers and managers revolutionized Operations Management.

Lillian Moller Gilbreth and Frank Gilbreth refined Taylor’s ideas. The topic they discussed was comfort and the study of movement in the workplace, as well as interpersonal relationships between workers. They indicated that it was important to have harmony and an inclination to teamwork.

For his part, Henry Ford carried out and published his studies on the chain work. Specifically, he brought together Smith and Babbage’s studies of specialization with those of Eli Whitney and his principle of interchangeable parts. It was based on the factory which cars it had for that very moment to make them.

Studies were also conducted on the non-formal relationships between non-hierarchical leadership and work groups. Altogether, it could be said that this is how the Operative administration, until it becomes what it is today.

What is Operations Management?

The Operative administration are all those action plans that must be followed to create added value in the company. Specifically, through the planning, organization, direction and control of certain strategies focused on production, it is sought to increase productivity, reduce costs and increase product quality.

Of course, in a customer-focused strategy, it would also seek to satisfy the demand of the target audience. Getting new customers and increasing sales is achieved by gaining a competitive advantage, which is an important goal for any business.

The Operative administration is located in the area of ​​the Business Administration. It attends to the activities of the production of both goods and services, although in the case of intangible products it is more difficult to know the production function.

In conclusion, it can be said that it seeks to optimize the production function. Whether managing workers, achieving strategies aimed at increasing productivity, plans to meet the internal and external objectives of the company, and so on.


  • It focuses on the high quality of the product (good or service) marketed.
  • The basis of decisions in the company is the demand for the product. As a result, it is necessary to manage an inventory that organizes consumer price and raw material prices.
  • The decisions that are made define the production and distribution process. These decisions involve technologies, work teams and adequate facilities.
  • Most of the goals need a physical expansion of the company, something that the administration says is that you have to expand the place and rent spaces.

Functions of the Operations Administration

The Functions of the Operations Administration there are several. In the same way, it is very important that you know each of these so that you can understand a little more the focus of this area.

  • Processes: the first function is to define the technology, the methodology to be followed for the distribution of the facilities, transport analysis, the design of the production system, and so on. Basically everything that includes the production processes.
  • Capacity: It is also responsible for establishing production levels and everything related to the facilities to carry out this process (planning, analysis and programming).
  • Inventory: in this case, reference is made to the organization of raw materials, intermediate and final products. Include how much product to order and when to avoid running out of stock.
  • Work force: everything related to the company’s workers, especially with regard to specialization. It is based on training employees, defining and carrying out labor measurement, designing positions, establishing the philosophy and work standards, and classifying workers.
  • Quality: finally, the operations administration is in charge of guaranteeing the quality of the goods and services traded. Thus, it focuses on the areas of processing quality certificates, quality control, tests and other elements.

These five are the five main functions of this administration. As you can see, it plays a very important role in key areas of a company.

Why is Training Important?

On the other hand, there are a number of Reasons for Training in Operations Management. Specifically there are four (04) fundamental reasons, which can be listed as follows:

  • First of all, you will be able to understand the production process of goods and services through the production function and other tools.
  • Additionally, you will realize that this is fundamental in any organization. All companies sell, book and operate. Therefore, you will be managing a very important area, including the organization of the people who operate in it.
  • Operations Management seeks raise the value of the company in society, as well as increasing its profitability. Many companies focus on spending part of the income on the production function and achieving this. Studying it is important because it is a very expensive part.
  • You train yourself to understand the work of other administrators. If you understand what they do and how they do it, you will be able to develop the necessary skills to reach or even exceed them.
  • It is a career with many opportunities for development.
  • Finally, if you like the Business AdministrationYou will find that training in this area will suit you very well.

The truth is that it is an area of ​​vital importance in the company. In the next section you will know exactly why. For now, keep in mind that knowing about production management is vital from the figure of an entrepreneur, manager or business owner.

Importance of Operations Management in Companies

Finally, the Importance of Operations Management is that it encompasses the company’s production, which includes pursuing an efficient level of productivity. It is also the area that is responsible for reducing costs, meeting the requirements of the target audience and generating a competitive advantage.

The objectives of this can be framed as follows:

  • To start with, increase the production volume of the company.
  • Reduce costs, both direct and indirect.
  • Deliver work on time and with a high level of quality.
  • Philosophy of flexibility before the changes that are necessary.
  • To fulfill the objectives in a determined time and with minimum costs.
  • Deliver a reliable and quality product to the market.
  • Use equipment and workforce appropriately.
  • Attend to everything related to the design of goods and services, quality management, maintenance, scheduling, inventory management and the supply chain, human resources, action plans regarding the process, distribution of facilities and location.

We hope we have helped you with what you were looking for. Now you know everything about the Operative administration. You can see its importance, what characterizes it, the objectives it pursues, its origin and why to train in this area.

Until next time!

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