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Roles and Functions of Operations Management

Last updated on Nov 17,2022 7.8K Views

Operations management (OM) is a critical function within any company, irrespective of its size and model. Operations management functions are essential for any company looking to streamline its processes and improve production. It is responsible for the daily operations of the business and ensuring that everything runs smoothly. There are many different roles and functions within operations management, which can be complex to understand.

This blog sheds light on various roles and functions of operations management and provides an overview of what each entails.

Evolution of Operations Management In the Business World

Operations management has been around since the early days of business and trade. In its simplest form, operations management is the process of managing the day-to-day operations of a business. This includes manufacturing goods, handling customer service inquiries, and managing inventory.

As businesses have grown and become more complex, the role of operations management has evolved. Today, operations managers oversee all aspects of the production process. This includes everything from product development and sourcing to manufacturing and logistics.

With the help of OM, businesses can increase efficiency and optimize their operations. This leads to improved profitability and competitiveness. In today’s business world, OM is essential for any company that wants to be successful. 

In the early business days, the functions of an operations manager were more limited. They were responsible for the day-to-day tasks and ensuring that the business ran smoothly. As companies have evolved, so has the role of operations management. They are now responsible for overseeing all aspects of production, from product development to manufacturing and logistics. This allows businesses to be more efficient and optimize their operations.

Want to take operations management to the next level and fine-tune your skills as an operations manager? Go through our Advanced Certificate in Ops, SCM, and PM, which will give you all the detailed information regarding operations management.  

What Are The Functions of Operations Management? 

Operations management is a business field concerned with producing goods and services and involves the management of resources, processes, and staff. The functions of operations management are to ensure that these resources are used effectively and efficiently to achieve the major objectives of the organization.

What are the functions of operations management?

The functions of operations management can be divided into four main categories:

  • Production planning and control
  • Finance
  • Product Design
  • Inventory management
  • Quality control
  • Forecasting
  • Supple Chain Management
  • Operational Strategy

Also Read: Decision Making in Operations Management: Key Points

Product Planning & Control

The first function of operations management is production planning and control. This involves the planning and coordination of all activities related to the production of goods and services. This includes the development of production plans, the scheduling of production activities, and the control of the production process. With efficient product planning & management, organizations can ensure that their products are of high quality and meet the needs of their customers.

Benefits of Product Planning & Control

  • Ensure Product Manufacture: By planning the production process and scheduling activities, product planners can ensure that products are manufactured on time.
  • Improved Product Quality: By controlling the production process, product planners can ensure high-quality products.
  • Reduced Costs: Organizations are able to reduce their production costs with efficient planning and coordination of production activities.
  • Customer Satisfaction: Product planners can ensure customer satisfaction by meeting the customer’s requirements.


The second function of operations management is finance. This involves the management of financial resources. The financing function includes budgeting, forecasting, and accounting. This function aims to ensure that the organization has the funds necessary to meet its objectives. It is essential to understand that finance is not limited to acquiring funds but also how to use them efficiently and effectively. Finance’s role in operations management is finding ways for a better investment.

Benefits of Finance

  • Efficient use of resources: Finance helps organizations to use their resources efficiently and effectively. It ensures that the organization has the necessary funds to meet its objectives and also provides guidance on how to use those funds efficiently.
  • Improved decision-making: Finance provides information that can be used to make better decisions. This information can help organizations decide where to invest their resources and allocate their budgets.
  • Increased profitability: Finance can help organizations increase their profitability. By understanding where the organization’s money is being spent and how it can be used more efficiently, organizations can save money and increase their profits.

Product Design

Operations managers are also responsible for process design. This involves creating efficient methods for manufacturing products and delivering services. They will work closely with engineers and designers to ensure that products are manufactured efficiently and meet quality standards. The function of product design is to create a product that meets the customer’s needs while also being affordable and profitable for the company. It is essential for operations managers to have a strong understanding of production technology and processes in order to be effective at process design.

Benefits of Product Design:

  • Improved efficiency: By designing products and processes that are easy to manufacture and require minimal processing time, operations managers can improve the overall efficiency of the manufacturing process. This can lead to lower production costs and shorter lead times.
  • Reduced Product Costs: Product planners working in operations management can often find ways to reduce the cost of materials and components used to manufacture a product. This can be done by redesigning products to use less expensive materials or finding new suppliers offering lower prices.
  • Better Quality Products: By carefully designing products and processes, operations managers can help to ensure that products are of high quality and meet customer expectations. This can lead to increased sales and improved customer satisfaction.

Inventory Management

Inventory management is no doubt one of the crucial functions of operations management. It involves managing the levels of stock in a company to ensure enough inventory to meet customer demand while also avoiding excessive levels of stock that could tie up working capital.

Operations managers use a variety of techniques to manage inventory levels, including just-in-time (JIT) inventory systems, economic order quantity (EOQ) models, and supply chain management (SCM) systems. This ensures that the company has the right inventory level to meet customer demand while minimizing the costs associated with holding too much stock.

Benefits of Inventory Management

  • Avoids the costs associated with holding too much stock: Inventory management helps avoid the costs associated with holding too much stock, such as storage costs and the opportunity cost of tied-up capital.
  • Helps meet customer demand: By managing inventory levels, operations managers can help ensure that customer demand is met. This is especially important in businesses where customer demand is high, and stock levels need to be closely monitored.
  • Reduces The Stock outs: By managing inventory levels, operations managers can help reduce the risk of stockouts. This is especially important in businesses where stockouts could lead to lost sales or production disruptions.

Quality Control

Operations management ensures that products and services meet the company’s and its customers’ quality standards. This includes establishing quality control procedures and ensuring that employees are adequately trained in quality control techniques. Quality control is an integral part of operations management because it can greatly impact a company’s bottom line. For instance, if a company makes a product that is not up to quality standards, it may have to issue refunds or replacements, which can cost the company money.

Benefits of Quality Control

  • Ensure products and services meet the company’s quality standards: Quality control procedures help ensure that products and services meet the company’s quality standards. This helps to protect the company’s reputation and bottom line.
  • Reduce the cost of refunds or replacements: By ensuring that products and services meet quality standards, quality control can help to reduce the cost of refunds or replacements.
  • Increase customer satisfaction: Quality control can help to increase customer satisfaction by ensuring that products and services meet their expectations.


Forecasting is a complex process, and using the most accurate data and methods is essential. Both short-term and long-term planning is involved in forecasting. This helps the company to set production goals and make decisions about inventory levels, capacity, and staffing. Demand planning is a critical component of forecasting. This process involves analyzing past demand patterns and using them to predict future demand. Statistical methods, such as trend and regression, are often used in demand planning. Without accurate forecasting, companies may find themselves with too much or too little inventory, under-utilized capacity, and not enough staff to meet customer demand.

Benefits of forecasting

  • Helps the company to set production goals: Forecasting helps the company to set production goals by analyzing past demand patterns and using them to predict future demand.
  • Helps the company make decisions about inventory levels, capacity, and staffing: By forecasting future demand, the company can make better decisions about inventory levels, capacity, and staffing.
  • Helps the company avoid overproduction and production: Forecasting helps the company to avoid overproduction and underproduction by predicting future demand.

Also Read: Operations Management in Hospitals – Know Crucial Functions

Supply Chain Management

When it comes to supply chain management, the functions of operations management become even more critical. In order to ensure that goods and services are delivered on time and within budget, operations managers must coordinate the activities of suppliers, manufacturers, warehouses, and transportation companies. By doing so, they can avoid disruptions in the supply chain and keep costs down. Supply chain management is a vital fragment of operations management and one in which functions must be constantly monitored and improved.

Benefits of Supply Chain Management:

  • Reduces overall costs
  • Improves communication and coordination
  • Increases transparency and accountability
  • Decreases turnaround time
  • Enhances customer satisfaction levels

Operational Strategy

The functions of operations management also play a role in developing and implementing an operational strategy. This strategy is designed to help an organization achieve its long-term goals and objectives. Operations managers must consider the resources available to them, their customers’ needs, and the organization’s overall objectives. By considering all of these factors, they can develop a plan to help the organization achieve its goals. The functions of operations management are essential in the development and implementation of an operational strategy.

Benefits of an Operational Strategy:

  • Helps to achieve long-term goals: Operational strategy 
  • Takes into account the needs of customers
  • Utilizes available resources
  • Can be adapted as needed

Role Of Operations Management In Taking Business Towards Success

Business functions like marketing, finance, and HR are essential, but the real success of a company lies in its operations. Operations management functions play a pivotal role in taking business towards success. The operations management functions make a company run smoothly and efficiently. Without these functions, a company would quickly become bogged down in the day-to-day tasks of running its business.

There are many functions of operations management, but some of the most important ones include supply chain management, production planning, and quality control. These functions are essential to the success of any company, but they are significant in the manufacturing industry. To be successful, a company must produce quality products quickly and efficiently. The functions of operations management are what make this possible.

Forecasting: The Future of Work

The ever-changing landscape of work is hard to predict. Technology has drastically changed our work and will continue to do so. The roles and functions of operations management will have to adapt to these changes to stay relevant.

Operations managers play a vital role in forecasting the future of work. They must be able to anticipate the needs of their organization and adapt accordingly. Functions of operations management will have to adapt as well. They will need to manage change effectively and efficiently to keep up with the ever-changing work landscape.

The future of work is uncertain, but operations managers will be key in ensuring that organizations are prepared for whatever comes next. They will need to be flexible and adaptable to keep up with the changing times.

Now is the time to harness the growing potential of operations management, and we have a certificate course that can help you get started. Take a look at our Advanced Certificate in Ops, SCM, and PM to get started with operations management and start your professional journey.


More Information: 

A Beginner’s Guide To Operations Management

Why Do Businesses Need An Operations Strategy?

What Is Capacity Planning In Operations Management?

What Is The Scope Of Operations Management?

1 Comment
  • Mahima jain says:

    This is a very informative article on functions of Operations management.

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Roles and Functions of Operations Management