What is supply chain: Definition, models, challenges
Supply chain is having an ongoing moment. Discover the trends, models, challenges, and requirements of modern supply and demand.
Effective operations management is core to business success, but traditionally has run in the background without a lot of fanfare. That’s not the case these days.
Ongoing disruption to the global supply chain and the growing need for business agility have put the spotlight squarely on operations managers.
Companies are reexamining and rethinking their processes to improve efficiency so they can navigate constant change and put their business on solid footing. They’re leaning on operations managers to get it right.
Every business, no matter the size or industry, needs effective operations management to drive profitability, achieve long-term success, and win competitive advantage.
What is operations management?
Operations management is the planning, organizing, and oversight of business practices that maximize efficiency and assure company processes are driving value. It involves preparing and supervising the practices that turn resources such as labor, equipment, and raw materials into goods and services.
Operations managers work to ensure a company achieves the highest operating profit by carefully balancing cost and revenue. They work closely with other teams to increase productivity, deliver high-quality products and services, and ensure customers are satisfied.
Large organizations usually have a chief operations officer (COO) while smaller businesses might assign the duties to another high-level role. Either way, it’s a highly strategic position involving strong planning, organizational, and communication skills.
Operations management is closely associated with supply chain management: Managing the process of sourcing material, turning it into product, and delivering it to customers.
Leadership and people management are also central to effective operations management. While systems and processes are key, success often hinges on the ability of operations managers to motivate cross-functional teams, foster collaboration, and maintain a culture of continuous improvement. By prioritizing communication and engagement, operations managers can ensure both people and processes work together to achieve business goals.
What are types of operations management?
There are many types, or aspects, of operations management. An operations manager role can vary widely, depending on business size and industry. They might have a broad range of responsibilities or focus on one area.
- Product design and development
- Planning and management of manufacturing facilities
- Purchasing/procurement
- Forecasting
- Capacity planning
- Inventory management
- Quality control
- Delivery to customers
Functions related to managing operations also can be broken down as strategic or tactical; the tactical functions carry out the overarching strategies or goals.
Whether they’re driving product design, managing capacity, or ensuring quality, operations managers must also consider risk management at each step. For example, proactive planning for supply chain disruptions—such as raw material shortages, transportation delays, or sudden demand spikes—helps businesses remain agile. By accounting for potential risks in every aspect of operations, companies can maintain reliable processes and protect customer satisfaction.
Closed-loop manufacturing: Sustainability across the supply chain
Closed-loop production systems drive sustainability across the entire supply chain by eliminating waste and clearing the path for a circular economy.
Examples of managing business operations
Given that every business needs to operations management to function, there are many examples across industries. Moreover, every industry can have a wide range of operations functions.
Here are a few examples:- Healthcare – An operations manager of a healthcare facility is generally responsible for ensuring efficiency in delivery of high-quality care. That can include overseeing administrative costs, managing claims and billing, and legal compliance.
- Manufacturing – A company that makes home appliances, for example, has processes for sourcing materials, managing factories, maintenance, overseeing inventory, and ensuring quality.
- Restaurant – An operations manager for a restaurant or chain of restaurants is usually responsible for facility maintenance, employee training and supervision, financial planning, inventory management, compliance, and payroll.
- Retail – In an industry that can span multiple environments, from brick-and-mortar to e-commerce and single stores to chains, retail operations can encompass many functions, including sourcing, inventory, staffing, logistics, store management, and customer service.
- Transportation – Operations management for a transportation company includes overseeing vehicle maintenance, fuel supply, routing, staffing, and communication, among other functions.
Across all these industries, new technologies and future trends are transforming traditional processes. The rise of advanced analytics, automation tools, and cloud-based platforms enables faster, data-driven decisions. Whether it’s using AI-assisted diagnostics in healthcare, implementing predictive maintenance in manufacturing, or adopting real-time delivery tracking in transportation, these innovations help organizations stay efficient, scalable, and ready for the demands of a rapidly evolving market.
4 maintenance KPIs for smooth operations in the field
Here are 4 maintenance KPIs field service managers should use to avoid downtime and damages from faulty machinery.
Supply chain management and business operation managers: The difference
In smaller companies, an operation manager’s responsibilities may include supply chain functions like managing the processes and systems for sourcing and delivery.
Supply chain managers work with suppliers to collect materials, oversee manufacturing of product, and delivery to customers. They evaluate suppliers and negotiate contracts, assess supply chain risks, manage purchasing, and oversee logistics. By comparison, operations managers may be focused more on internal production processes.
Strong supply chain management is critical for increasing efficiency, reducing costs, improving customer satisfaction, and driving revenue for a company.
Today, technology and automation play key roles in managing supply chain complexity. AI-driven demand forecasting, real-time shipment tracking, and automated warehouse systems help supply chain managers detect potential bottlenecks and optimize routes. Operations managers leverage these same innovations to coordinate internal workflows, quickly adjust production schedules, and ensure alignment with shifting market demands. This interconnected use of technology underpins an agile, efficient supply chain ecosystem.
Additionally, risk management is front and center as supply chains grow more global. From natural disasters to geopolitical tensions, disruptions can occur at any point in the chain. By integrating contingency planning—such as backup suppliers, diversified shipping routes, or safety stock strategies—operations managers and supply chain managers alike can minimize potential impacts, maintain business continuity, and protect the customer experience.
Supply chain challenges can make for a wild ride. Get advice, best practices, + predictions from top experts HERE.
Not your father’s ERP: A blueprint for digital transformation
With an intelligent ERP, a company can embark on a digital transformation strategy to set them up for the future of business – in five steps.
Best practices for managing operations
There’s no one-size-fits all solution for operations management. Every business will manage their operations differently depending on their unique needs and goals, but there are a few foundational best practices that apply across industries.
- Leverage automation. Advanced technologies such as modern ERP systems automate processes to reduce manual work and the risk of human error. They apply artificial intelligence and data analytics to provide deep insight that gives organizations the visibility they need to boost efficiency and sharpen decision making. Increasingly, companies are also adopting IoT (Internet of Things) devices for real-time monitoring and predictive maintenance, as well as collaboration platforms that streamline communication between teams. By incorporating these solutions, operations managers can uncover inefficiencies, proactively address potential disruptions, and scale processes with minimal friction.
- Remain agile. Operations managers may get comfortable with certain ways of doing things, but they need to be ready to shift gears to accommodate the change that’s always inevitable. Cloud-based systems help organizations remain agile by making it easy for them to alter their processes and innovate, while data-driven forecasting tools allow for rapid adjustments to capacity or production. Embracing evolving digital platforms and regularly revisiting operational strategies ensures businesses can quickly respond to market shifts and maintain a competitive edge.
- Keep people at the center. As they explore ways to boost efficiency through new technologies, organizations can’t lose sight of their people. For technology to be truly effective, operations managers must consider the experience of the end user. Tech implemented for tech’s sake will have limited value. Strong leadership and team alignment are critical for success: operations managers need to communicate a clear vision, invite feedback, and foster a culture where employees feel empowered to contribute. Only by aligning people, processes and technology can they help grow and improve the business. Effective leaders prioritize training, collaboration, and a supportive environment so that everyone can adapt to new systems and continuously drive operational excellence.
Real-world process transformation: Humans must be at the center
Effective business transformation starts by empathizing with the end user to learn their true needs and then applying technology.
Theoretical frameworks and methodologies
Effective operations management isn’t just about day-to-day efficiency; it also draws on established frameworks and methodologies that have shaped best practices over time. These approaches offer structured ways to eliminate waste, reduce defects, and continuously enhance processes.
Lean
Originating from the Toyota Production System, Lean focuses on identifying and eliminating waste (anything that does not add value to the customer). By streamlining workflows and optimizing resource use, Lean principles can significantly improve quality and speed. In modern operations management, Lean methods are often combined with digital tools, allowing teams to visualize and address inefficiencies in real-time.
Six Sigma
Developed at Motorola and popularized by companies like General Electric, Six Sigma targets process variation that leads to defects. Using data-driven techniques and statistical analysis (DMAIC: Define, Measure, Analyze, Improve, Control), it aims to minimize errors to near-zero levels. Six Sigma continues to influence many industries today, helping operations managers maintain rigorous standards and predictable outcomes.
Total Quality Management (TQM)
Rooted in the work of quality pioneers such as W. Edwards Deming, TQM (Total Quality Management) emphasizes an organization-wide commitment to quality, continuous improvement, and customer satisfaction. By involving every level of the workforce in the quality process, TQM fosters a culture of shared responsibility—a concept that aligns well with today’s collaborative, cross-functional teams.
Kaizen
A core Japanese business philosophy that translates to “change for the better,” Kaizen advocates for small, continuous improvements rather than sweeping, periodic changes. This incremental approach can help organizations adapt more smoothly to shifting market conditions. Modern operations managers often embed Kaizen events or workshops into their routines to keep teams focused on constant progress.
Evolving influence on modern operations
Over the decades, these methodologies have merged with emerging technologies—like real-time analytics, machine learning, and automation—leading to more precise measurements and faster iterations. Whether focusing on reducing defects, cutting waste, or boosting quality, these frameworks guide operations managers in establishing the culture, processes, and metrics that drive sustainable improvements. By blending time-tested principles with new digital capabilities, businesses can stay resilient in a constantly evolving market.
Experience management: Beyond data collection for deep insight, better CX
Learn how an experience management solution collects customer feedback and translates this feedback into powerful metrics for the business.
Metrics, KPIs, and measurement
For operations managers, metrics and key performance indicators (KPIs) are essential for gauging efficiency, spotting bottlenecks, and driving continuous improvement. By tracking and analyzing concrete data, businesses can make informed decisions and quickly adapt to market shifts or internal challenges.
Common operations metrics
- Inventory turnover: Measures how often a company sells and replaces its stock within a given period. A higher turnover rate usually signals efficient inventory management.
- Overall Equipment Effectiveness (OEE): Evaluates how effectively manufacturing equipment is being used by factoring in availability, performance, and quality.
- Lead time: The time it takes from receiving an order to delivering a finished product or service. Shorter lead times indicate higher operational efficiency.
- Forecast accuracy: Gauges the precision of demand predictions. Inaccurate forecasts can result in overstocking or stockouts, directly impacting costs and customer satisfaction.
- Cycle time: Captures how long it takes to complete a single iteration of a particular operation or process. Reducing cycle time can help increase throughput and boost profitability.
Linking metrics to financial outcomes
Operational metrics don’t exist in a vacuum; they closely tie to financial outcomes such as ROI, cost reduction, and profit margins. For instance, minimizing lead time can lower holding costs and improve cash flow, while higher inventory turnover often translates to better use of working capital. By understanding how each KPI affects the bottom line, operations managers can prioritize improvements that yield tangible business impact.
The power of data-driven decision-making
As businesses become increasingly reliant on technology, data-driven approaches are more accessible and powerful than ever. Modern analytics tools can offer real-time visibility into metrics, helping managers spot trends and anomalies quickly. This ability to analyze performance in real time accelerates decision-making and reduces guesswork. When combined with predictive analytics and machine learning, data-driven operations management becomes a continuous feedback loop—one that allows businesses to stay agile, maintain high product or service quality, and meet evolving customer expectations.
How operations management impacts customer experience
The way a business manages its processes is directly linked to the customer experience it provides.
When a company delivers quality products and services to customers in a timely manner, customer satisfaction soars. In contrast, a delayed or wrong order will damage CX and drive customers to the competition.
Customers want their wishes met, on time and at a good price. They expect brands to live up to their promises and deliver products as advertised. This requires understanding what customers want and need, and using that to inform operations management. Listen to their feedback to adjust processes as needed.
Looking ahead, future trends in consumer behavior—including demand for real-time tracking, personalized experiences, and environmentally responsible practices—are reshaping how companies think about customer experience. By integrating advanced analytics and transparent supply chain capabilities, operations managers can stay agile and respond to these emerging demands, ensuring that every aspect of the customer journey meets or exceeds expectations.
Customer experience isn’t just about front-end touch points; it requires integration with back-end operations such as inventory and fulfillment in order to really shine.
According to a McKinsey report, companies can spot operational improvements that will improve CX by analyzing customer journeys. For example, one bank looked at how customer satisfaction was impacted by how long it took to apply for an account and receive an account card.
Understanding breaking points can help businesses zero in on operational improvements that will boost CX, researchers said. Implementing those improvements could involve advanced analytics, intelligent process automation, and/or a lean approach.
3 ways to stop departmental silos from crippling project execution
Departmental silos lead to inefficiencies, reduced productivity, and lower morale. Find out how to put an end to silos and increase efficiency.
Strategy and Cross-Functional Alignment
Effective operations management doesn’t happen in a vacuum. It needs to be tightly interwoven with the broader strategy of the organization to ensure that operational goals support the company’s vision and objectives. Whether the corporate strategy centers on rapid growth, product innovation, or market expansion, aligning operational processes accordingly helps maintain consistency and clarity across all levels of the business.
Collaborating Across Departments
Operations managers often find themselves collaborating with finance, marketing, R&D, and other departments to develop cohesive initiatives. For instance, finance teams may offer insights into cost management and budgeting, while marketing provides demand projections and customer feedback that inform production volumes. By building these relationships, operations managers gain a holistic view of the organization’s priorities and can adjust workflows to balance financial constraints, product roadmaps, and customer requirements.
Breaking Down Silos
One of the biggest challenges in any organization is the tendency for departments to work in isolation. Silos can lead to misaligned objectives, duplication of effort, and delayed decision-making. Operations managers play a crucial role in uniting diverse teams, ensuring that communication flows freely and everyone understands how their responsibilities fit into the bigger picture. This cross-functional alignment encourages shared ownership of results and fosters a culture where teams proactively collaborate on everything from product launches to process improvements.
By integrating operations management with corporate strategy and actively working to bridge departmental silos, companies can create a more agile, efficient environment. Aligning people, processes, technology, and resources around common goals not only enhances day-to-day operations but also positions the business for long-term resilience and success.
Turn on a dime: Business agility starts with customer data management
Business agility requires great customer data management. Understand customers with a single, enterprise-wide view of data to pivot on a dime.
Operational excellence, bottom-line benefits
Satisfied customers prove that your operations and processes are doing what they’re supposed to: deliver value.
Effective operations management has become more vital than ever as businesses navigate ongoing disruptions and evolving market conditions. From supply chain disruptions to evolving customer expectations, companies that excel operationally can adapt quickly, maintain quality, and protect their brand reputation.
Achieving operational excellence requires a holistic approach—integrating everything from the right methodologies and KPIs to a clear strategic focus and cohesive cross-functional teamwork. By continuously refining processes, embracing new technologies, and keeping the workforce aligned with organizational goals, businesses can avoid stagnation and remain prepared for whatever challenges arise.
Only with the best planning and oversight of its myriad processes can a business remain resilient, achieve its long-term goals, and outlast the competition. Through deliberate, ongoing improvement efforts, operations managers help ensure that organizational performance consistently supports customer satisfaction, revenue growth, and sustainable success.