by Justin Manucci

Created on: November 18, 2010   Last Updated: November 19, 2010

Operations Management is the management of systems or processes that convert or transform resources into goods and services. Operations Management is basically responsible for managing the core processed used to manufacture goods and produce services. To make this simpler, the creation of goods or services involves transforming or converting inputs into outputs, which is what operations management entails. The process of converted inputs into outputs is generally referred to as the “transformation process”. Inputs typically include land, labor, capital, and information, while outputs are usually the goods and services.

Operations management is very important in the business world today, and has a lot of different uses. Operations management can help businesses with forecasting, capacity planning, scheduling, managing inventory, assuring quality, motivating and training employees, and locating facilities. These business functions are extremely important to the overall well being of the company.

Information technology also plays a vital role in Operations Management. Managers can typically use information technology to influence decisions involving productivity, costs, quality, customer satisfaction, and more. Information technology can help the business by using decision support systems, that allow the manager to perform what if analysis, sensitivity analysis, drill down analysis, and drill down techniques.

Examples of information technology's involvement in operations management include strategic planning, which focuses on long range planning such as plant size, location, and type of process to be used. Strategic planning can be done using a variety of different systems, including materials requirement planning systems, which use sales forecasts to make sure that needed parts and materials are available at the right time and place in a specific company. Another example of a way information technology effects operations management includes Global inventory management systems, which provide the ability to track and locate, as well as predict the movement of every component or material anywhere upstream or downstream in the production process. Operational planning and control deals with the day to day procedures for performing work, including scheduling, inventory, and process managing, while inventory management and control systems provide control and visibility to the status of individual items maintained in inventory.

Operations Management deals also with the supply chain of items, which consists of all parties involved in the procurement of a product or raw material.

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