What does 'Operations' cover?

History of Operations Research
The first applications of operations research and analysis began in 1937, when the British Royal Air Force needed to extend the range of their radar equipment to locate enemy aircraft. They began their efforts by analyzing the equipment, but eventually examined behaviors of the operating personnel and found many possibilities for improving the techniques and abilities of the operators. They also discovered shortcomings in their network.

By 1942, it had became common in the British military to deploy teams of mathematicians, physicists, and officers to test equipment and study the effectiveness of weapons and radar under actual operating conditions.

Operations research activities were brought to the U.S. in 1942 to the Naval Ordinance Laboratory. Eventually all Air Force commands were ordered to include operations research groups in their staffs. By the end of World War II military operations research was greatly expanded.

In 1948, Massachusetts Institute of Technology offered studies in Operations Research, but it was not until 1950 that industry in the U.S. began to use the techniques.

[Source: Britannica.com]

As we mentioned in the introduction, the role of "operations" varies in every business. Basically, operations looks at every process in the business, breaks it down, analyzes it, and makes it (and its final product) better. The universal goal is customer satisfaction, which is achieved through improving quality, efficiency and ultimately reducing costs for everyone. Add to this, research into innovative new products and you can come up with the perfect product with the perfect manufacturing process and the perfect marketing plan. Your customers are perfectly happy and your business takes off like a rocket! OK, that is a little oversimplified, but you get the idea.

Here are some of the processes that are linked to production and ultimately the Operations Manager.

  • New product research and development -- Operations managers are involved in decisions about the logistics of producing the new product, the costs, the skills necessary, the equipment, and the staff training to make it happen.

  • Manufacturing and production -- It is here that operations managers will often have the most impact (depending on the type of business). Manufacturing and production processes need constant review and continuous improvement.

  • Supply Chain -- Purchasing prices and levels, as well as, storage of raw materials, inventory, and other product components is part of the job of the operations manager. From an operations standpoint, these are all processes that must be reviewed frequently and improved.

  • Quality Management -- Tying back once again to customer satisfaction is the level of quality that must be maintained in both the product produced and the environment in which it is produced. (i.e. Happy workers produce better products.) Operations plays a big part in analyzing and improving quality in every facet of the business.

  • Sales and Marketing -- Market research and feedback from customers is critical to creating successful marketing programs, as well as for development of new products. By working with marketing, operations can help the company better fulfill customer needs.

  • Finance -- Budget information is important for every department of the company. The operations manager may need to be able to provide costs for each phase of the operation in order to prepare proper budgets and forecast accurate profit/loss information. Replacement and repair of capital equipment is also an issue here.

  • Human Resources -- Identifying the optimum number of employees for each department, as well as the overall organization of staff and reporting structures can also be part of the operations manager's role.

  • Facility Management -- Environmental regulations, waste removal (or elimination of waste from processes), site locations, and employee safety and health are all issues the operations manager may be involved in.
By improving the processes within a business, whether it be administrative, marketing, research and development, or anything else, a company can theoretically produce a better product, making higher profits, and create a happy and loyal customer-base. But how do you determine where the problems are?

Let's look at some of the techniques for analyzing processes within a business.