What is operations management and why is it important

What is Operations Management?

Operations management is a delivery-focused area in business which ensures that an organisation successfully turns inputs to outputs in an efficient manner. The inputs themselves could represent anything from materials, equipment and technology to human resources such as staff or workers.

The MBA in operations management is a common specialization among leading business schools worldwide. So, what does operations management involve and what makes a good operations manager?

What does operations management involve?

Operations management involves planning, organizing and supervising in the contexts of production, manufacturing or the provision of services. 

Examples of the types of duties or specialist positions this encompasses are procurement (acquiring goods or services from external sources), managing relations with those involved in processes and improving a company’s sustainability with regard to their use of resources.

There are two key terms that can help answer the question of what operations management is more precisely: supply chain management and logistics. Operations management has firm foundations in both areas.

For example, understanding global trends in supply chain management in order to meet client demand is often critical. With logistics the careful and considered use of resources, as well as cost-effectiveness, has become increasingly important in an era in which resources can often be in short supply and customer expectations have skyrocketed.

Skills required of an operations manager

• Excellent organizational ability
• Knowledge of logistics and supply chain management
• Confident communicator
• People management

Excellent organizational ability is crucial in successfully enhancing efficiency and driving productivity as an operations manager.

There are strong parallels between the skills required for effective operations management and those needed in both logistics and supply chain management. 

An operations manager must be able to understand the series of processes within a company to get them to flow seamlessly, and in this sense the role is directly related to supply chain management.

Meanwhile, the coordination involved in setting up these processes in practice represents logistics; the combination of understanding and coordinating the work of a company are central to becoming a successful operations manager.  

The MBA in operations management

An MBA in operations management or a specialization in a related field, such as logistics or supply chain management, should help students to enter the industry by developing the requisite skillset or to help those already in the industry to widen their knowledge and push on into a business leadership role.

Studying an MBA in operations management commonly offers a global perspective on industry trends and an awareness of any financial regulations or political uncertainties that could impact an organization. Risk management, getting to grips with the industry’s inherent complexities and responding well to change will be a strong consideration for students during their course.

Emphasizing the importance of strategic thinking is also a cornerstone of many leading operations management programs, something that should enable graduates to ensure their organization stays ahead of its competition.

Best business schools for an MBA in operations management

MIT Sloan School of Management has been ranked as the best b-school in the world for specializing in operations management. Here is the complete top 10.

1) MIT Sloan School of Management
2) The Eli Broad College of Business
3) IE Business School
4) W.P. Carey School of Business
5) MIP Politecnico di Milano Graduate School of Business
6) Warwick Business School
7) Pennsylvania State University Smeal College of Business
8) INSEAD
9=) HEC Montreal
9=) Imperial College Business School

Eligibility to study an MBA in operations management

Entry requirements for specialized MBA in operations management programs will resemble the typical requirements of a traditional MBA program: an existing academic degree, work experience of more than two years, an above-average GPA, excellent recommendations, and a high GMAT score are all basic requirements among top business schools but having an adaptable personality and an ability to analyze large amounts of data quickly, and effectively, is also bound to come in handy.

Some specializations combine an MBA in operations management focus with one on technology, so, while a background in IT is not necessary, some working knowledge of IT will be of great benefit.

Links to supply chain management highlighted by course options

MIT Sloan offers a dual degree with its engineering school, highlighting its interrelations with other disciplines. At the end of two years, graduates leave the Leaders for Global Operations (LGO) program with both an MBA and an MSc. The course has a wealth of company partners in the field of global operations and manufacturing who host plant visits and provide opportunities for the program’s six-month internship segment. Indeed, 61 percent of 2018 students found their post-graduate jobs through the LGO network, from a list including Boeing and American Industrial Partners (AIP).

The UK’s Cass Business School, meanwhile, offers a specialized master’s in Global Supply Chain Management (GSCM). The one-year course places operations management alongside insights into strategic supply chain, global procurement, business sustainability and finance.

Contextualizing the role of the operations manager

The operations manager is able to transcend industries so exact job functions can vary based on the company you work for. At the base level, the two main streams an operations manager might belong to can be reduced to companies with a concentration on manufacturing and production, or those that provide services.

Operations management roles within say, a pharmaceutical company fall under the category of production. Planning and coordinating the use of resources to ensure products are designed, created and dispatched to hospitals, chemists and so on, ensure not only that these products are prepared, but also that they are available to customers.

Meanwhile, an airline company will often see the operations manager focus on services – transporting passengers and/or cargo from one place to another.

In addition, it is likely that a manufacturing focus on the delivery of a tangible product will involve less direct contact with customers than a services role.

These examples illustrate the clear distinction between the roles of an operations manager in two distinct industries.

However, in reality most companies will not fit easily into one category or the other in the entirety of its operations. A car company doesn’t simply manufacture cars, it also services them. A café serving coffee might very easily also produce their own coffee. There is also what is known as quasi-manufacturing organizations, which seem more like manufacturing firms, but are clearly providing a service, such as an automated warehouse dispatching goods.

The more one analyses the question of what operations management is, the more one sees how integral the position can be to any given company, be it small or large. There can be strong overlap with supply chain management, logistics or engineering, but there are many other industries and areas where operations functions and the skills of an effective operations manager are strongly tied to an organization’s lasting success.

This article was originally published in April 2014 . It was last updated in October 2022

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