1.4 Why Study Operations Management?
In most organizations, operations tend to be the largest department in terms of the number of employees. If you’re a recent graduate, consider starting your career in a company’s operations department. A career in operations can provide more job openings than smaller departments. Larger companies can provide more growth opportunities as well. You can focus on finding a great company culture and worry less about the specific job title. With a good work ethic (punctuality, energy, and proactiveness), you can likely get promoted to your desired role later.
Operations: The Engine of the Business
Operations play a critical role in any organization:
- Cost Center: This department spends a significant portion of the company’s budget, making it a central focus for leadership.
- Interconnectedness: All departments (finance, marketing, HR) interact with operations regularly. Understanding the core processes, regardless of your department, is valuable.
- Innovation Hub: Major breakthroughs often happen in operations. Companies like Toyota, Amazon, and Dell achieved success through innovative operational practices.
What is Operational Innovation?
It’s about finding new ways to run the business – fulfilling orders, developing products, providing customer service, and more.
As a new graduate in an organization, you will find that every business is looking for new ideas, tools, and suggestions for improvement in order to improve its effectiveness and efficiency.
- Effectiveness: It’s about doing the right things. This means making choices and taking actions that benefit the business and, most importantly, add value for the customer. Think of it as picking the winning strategy.
- Efficiency: It’s about doing things well but without wasting resources. This means finding ways to streamline tasks and avoid unnecessary steps that cost time or money. Think of it as getting the job done smartly.
In short, businesses want to do the right things (effectiveness) in the best way possible (efficiency).
Many decisions involve a trade-off between effectiveness and efficiency. For instance, consider hiring an additional full-time server in a restaurant. While this may lead to faster service and a more attentive customer experience, it also comes with higher costs, reducing overall efficiency.
Value, in this context, relates to the balance between quality and price. We create value if we can offer customers a higher-quality product at the same price. Similarly, providing the same product at a lower price benefits the customer.
Resources for Operations Management Learners and Professionals
“1 Introduction to Operations Management” from Introduction to Operations Management Copyright © by Hamid Faramarzi and Mary Drane is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.—Modifications: used section Why should I study Operations Management? some paragraphs rewritten, moved activity to later section.
