Operational management - what is it?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Operational management (or operations management) deals with the solution of current problems, but this does not mean that the decisions made within it are not important. On the contrary, without solving everyday problems, the activity of the company is impossible.

Operational management is actually the development of solutions to reduce the costs of the company's activities without losing the quality of the results of this activity. Thus, operational management in solving everyday problems is engaged in the overall optimization of the company.

Successful operating decisions are often copied by competitors, so they are rarely an advantage, at least not in the long run. But this does not mean that it is not necessary to look for non-standard solutions to optimize the company's activities: pioneers, as a rule, still skim off some of the cream.

The function of operations management is often dispersed in one way or another among various departments of the company. This allows the heads of these services to optimize production processes.within their segments, which will ultimately benefit the entire company.

Undoubtedly, operational management should be based on strategic. For example, the management of an airline that is positioned in the market in the low-cost segment is unlikely to decide to serve a three-course meal on board, the cost of which will be included in the ticket. Such a decision would be irrational. Or a manufacturer of luxury-segment goods cannot reduce the cost of production by using cheaper raw materials: this may affect

as the final product.

Studying operational management within the framework of a university or continuing education will undoubtedly be useful for middle and top managers, since in organizing a company and managing it, in addition to experience, theoretical and practical knowledge is needed.

In addition, knowledge of the basic principles of operational management will be useful in assessing the effectiveness of the company in general. Studying this discipline will be useful not only for managers, but also for accountants, financiers, marketers and even programmers.

Operational analysis in financial management, as part of short-term planning, helps to track the dependence of the company's performance in monetary terms, that is, profit from production costs and its volumes.

This analysis is often referred to as analysisbreak-even, since he can calculate, among other things, the volume and nature of production, in which the financial results of the company will be equal to zero. It also helps to determine the threshold of profitability of the company and allows you to predict the financial consequences of certain decisions.

Thus, operational analysis and operational management are closely related, so that entrepreneurs and managers must master these disciplines so that the company not only continues its activities, but also develops as efficiently as possible.