Operation Management: What it is and Why it Matters

Uncovering the meaning, definition, and explanation of operation management: learn why it matters

What is Operation Management?

Operation Management is a critical aspect of any organization, whether it’s a manufacturing firm, a financial institution, or a logistics company. It involves the design, execution, and control of operations that convert resources into desired goods and services, and implement a company’s business strategy. Operation Management is the engine room of the organization, ensuring the smooth functioning of the value chain, from raw materials to the end customer.

The Core Functions of Operation Management

Operation Management encompasses several key functions within an organization. These include:

  • Production Management: This involves planning, coordinating, and controlling the process of production to ensure efficiency and effectiveness.
  • Quality Management: This focuses on ensuring the products or services meet the desired quality standards and customer expectations.
  • Inventory Management: This involves managing the organization’s stock of goods to ensure optimal levels are maintained.
  • Supply Chain Management: This involves managing the flow of goods, information, and finances to deliver products and services from the supplier to the customer.

Why Operation Management Matters

Operation Management is crucial for the success of any organization. It helps in achieving efficiency and effectiveness in operations, leading to cost savings and improved profitability. Here’s why it matters:

Efficiency and Productivity

Operation Management helps in streamlining processes, reducing waste, and improving productivity. It ensures that resources are used optimally, leading to cost savings and increased output.

Quality Assurance

Through quality management, Operation Management ensures that the products or services delivered meet the desired quality standards. This leads to customer satisfaction and loyalty, and enhances the organization’s reputation.

Competitive Advantage

Effective Operation Management can provide a competitive advantage to an organization. It can lead to faster delivery of products, high-quality services, lower costs, and improved customer service.

How Operation Management Works

Operation Management involves a series of steps, from planning to control. These include:

  1. Planning: This involves setting goals and objectives, and developing strategies to achieve them.
  2. Organizing: This involves arranging resources and tasks to achieve the set goals.
  3. Directing: This involves guiding and supervising the workforce to ensure tasks are performed as planned.
  4. Controlling: This involves monitoring performance, comparing it with the set standards, and taking corrective action if necessary.

In essence, Operation Management is a systematic approach to ensuring that an organization’s operations are efficient, effective, and aligned with its business strategy. It is a critical function that can significantly impact an organization’s success.


TradingChooser is the premier website for comparing the top online brokers. Developed by experts and trading enthusiasts, its primary objective is to provide traders with essential information regarding the most renowned online trading platforms.

Risk Disclaimer

Trading CFDs and forex involves highly speculative products that carry a significant risk of capital loss. Investments in financial products are susceptible to market risks. Certain financial instruments, including cryptocurrencies, are particularly speculative, and any investment should be made using funds designated as 'risk capital'. Previous market performance does not guarantee future outcomes.

Our stock market recommendations are sourced from what we consider reliable sources; however, we cannot guarantee their complete accuracy or truthfulness. They are provided solely for informational purposes and should not be construed as an invitation or solicitation to invest.

Advertiser Disclosure

TradingChooser provides global traders with a comprehensive platform to access in-depth information about various trading brokers. We meticulously examine company profiles and conduct daily investigations to identify potential frauds or scams in the industry. The trading brokers mentioned above undergo thorough verification and analysis by our team of experts, who consider the key features that a trading platform should possess.