What Is Operations Management and Why Is It Important?

November 9, 2023

An operations manager in a warehouse talks with an employee.

A successful business effectively converts resources into products and services for customers. Redundancies and production issues can increase costs or reduce overall revenue, potentially limiting growth. Businesses are complex, with numerous moving parts, all working together to make production run smoothly. Effective operations management streamlines the production process to ensure the best results.

Operations managers work to achieve harmony across departments by planning, coordinating, and orchestrating all elements of operations. Operations managers ensure that staff has access to the materials and resources needed while also meeting the demands of consumers. Nearly every industry can use operations management to effectively regulate and monitor products, services, and people.

Operations managers are in high demand, and those with a thorough understanding of what operations management is and why it is important can find a rewarding role in various industries. Pursuing an advanced business education can represent a crucial step toward a career in operations management.

Operations Management Job Responsibilities

Operations management oversees quality and consistency as products make their way through the supply chain. Operation managers’ responsibilities include the following:

Logistics and supply chain. Logistics involves transporting and storing goods in the supply chain and is the link between production and sales. Operations managers coordinate these activities and oversee all aspects of the supply chain.
Product manufacturing and fulfillment. Manufacturing involves the creation of products for sale on a large scale through assembling materials, while fulfillment is the process of receiving products, processing them as inventory, and delivering them to the consumer. Operations managers monitor the manufacturing and fulfillment process to ensure that neither quality nor cost becomes an issue.
Product and service quality. Operations managers help ensure that products and services maintain a high standard of quality, which is crucial to a company’s reputation.
Cost efficiency. Ensuring as few redundancies as possible keeps costs low. Operations managers work to ensure processes are streamlined and budgets aren’t exceeded, while making sure not to compromise quality.
Human resources allocation. Operations managers supervise the HR department’s daily administrative activities and oversee the personnel cycle, which includes monitoring the budget, establishing new rules and protocols, strengthening employee relations, and supervising recruitment.
Sales and marketing effectiveness. Operations managers plan strategies and develop programs to increase sales efficiency. They implement management and process changes, detect trends that may boost sales prospects, provide suggestions to strengthen internal and external connections, and record the sales processes.
Customer service. Operations managers may work directly with customers or with a team of customer service representatives.

Operations Management Skills

Professionals interested in enhancing their operations management expertise should focus on cultivating the technical skills required for the role, as well as soft skills related to leadership and critical thinking.

Technical Skills

Computer proficiency. Many systems used by operations managers require knowledge of specific computer software, including digital spreadsheets such as Microsoft Excel, and business management software such as Odoo and Trello. Proficiency in these applications can streamline the process of operations management.
Data management. Data management is the practice of gathering, storing, and using data safely and efficiently. Software such as inFlow allows operations managers to store and receive inventory data in real time, improving their ability to make critical decisions in a timely manner.
Strategic planning. Operations managers should be able to outline their goals, looking months to several years ahead, with clear plans on how to reach those goals.
Product development. When developing a new product, operations managers must be able to provide design input that allows for the most effective production and distribution.
Risk analysis. Operations managers should be able to assess what risks are worth taking as well as the severity of the consequences should issues arise. Risk management information systems (RMIS) and enterprise risk management (ERM) software assist operations managers in identifying risks, planning for future risks, documenting responses, and improving response procedures.
Budgeting. Operations managers should be capable of overseeing budgets and identifying where to cut costs without disrupting production or compromising product quality.

Soft Skills

Operations managers also rely on a collection of soft skills, which are relevant regardless of industry or position. These skills are crucial for effective leadership, team-building, and problem-solving.

Staff management. Operations managers organize and direct employees based on where they’re most needed — for example, redirecting staff to prioritize unloading inventory at a warehouse when new shipments arrive.
Decision-making. Operations managers often need to make important decisions with limited information using real-time data, such as determining the best transportation option when rerouting a supply chain to save costs and reduce delays.
Communication. To make necessary changes quickly as events unfold, operations managers need strong communication skills. They need to be able to effectively communicate instructions to staff as well as share information with other stakeholders in the organization.
Problem-solving. Operations managers should be able to identify problems and assess possible solutions to achieve the most desirable outcome.
Organizational. Operations managers must organize their responsibilities, breaking down complicated projects into manageable tasks and prioritizing them effectively.

How to Become an Operations Manager

The first step in becoming an operations manager is to establish the educational foundation that helps students understand what operations management is and why it’s important. A bachelor’s degree in business administration, business management, or a related field is recommended. Aspiring operations managers typically build on that foundational knowledge with an advanced degree, such as a Master of Business Administration (MBA) or Executive Master of Business Administration (EMBA).

Washington State University’s EMBA program offers several courses that can help students hone their leadership skills and technical expertise, and prepare them for a role overseeing operations, including Operations Management, Managerial Leadership and Productivity, and Business Analytics.

Professionals looking to boost their job prospects might also consider certification. The American Institute for Business Management and Communication (AIBMC), for example, provides a Certified Operations Manager course. Successful candidates demonstrate that they have expert knowledge of operations management, the supply chain, and purchasing. Individuals need either a bachelor’s degree or two years of relevant experience to qualify, must pass a final exam, and must renew the certification every four years.

Operations Manager Salary and Job Outlook

Salaries for operations managers can vary depending on several factors, including location and industry as well as the size of the organization, as larger companies with more moving parts are more likely to offer higher wages. Education can also play a part, as candidates with an advanced degree may be more valuable to potential employers.

According to Payscale, the median annual salary for operations managers was approximately $68,500 in October 2022. The U.S. Bureau of Labor Statistics (BLS), meanwhile, reports the median annual wage for general and operations managers was $97,970 in 2021.

As the top tier of operations management — and often the second-highest ranking executive at a company — chief operating officers (COO) earn the most generous compensation. According to Payscale, the median salary for COOs was $144,400 in November 2022.

The BLS projects strong demand for general and operations managers over the next several years, with 7% employment growth between 2021 and 2031. That translates to nearly 210,000 new jobs.

Discover Your Road to Success in Operations Management

Operations management can play a pivotal role in any business that provides a product or service to customers. Professionals with the skills and expertise to ensure that operations run smoothly across the supply chain, while maintaining quality and meeting the budget, will continue to be highly valued. Those interested in capitalizing on the industry need for these experts should explore Washington State University’s Online Executive MBA program.

As an EMBA student, you will have access to the world-class faculty and challenging curriculum that led U.S. News & World Report to rank WSU’s program as one of its top 25 online MBA programs for 2024. Take the first step toward a fulfilling career in operations management with WSU.