Operations management

Operations management is an area of business concerned with the production of quality goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. It is the management of resources, the distribution of goods and services to customers.

Operations also refers to the production of goods and services, the set of value-added activities that transform inputs into many outputs. Fundamentally, these value-adding creative activities should be aligned with market opportunity (see Marketing) for optimal enterprise performance.

Origins

The origins of operations management can be traced back to the Industrial Revolution, the same as scientific management and operations research. Adam Smith treats the topic of the division of labor when opening his 1776 book: An Inquiry into the Nature and Causes of the Wealth of Nations also commonly known as The Wealth of Nations. The first documented effort to solve operation management issues comes from Eli Whitney in 1798, leading to the birth of the American System of Manufacturers (ASM) by the mid-1800s. It was not until the late 1950s that scholars noted the importance of viewing production operations as systems.

Historically, the body of knowledge stemming from industrial engineering formed the basis of the first MBA programs, and is central to operations management as used across diverse business sectors, industry, consulting and non-profit organizations.

Operations management planning criteria

The task of production and operations management is to manage the efforts and activities of people, capital and equipment resources in changing raw materials into finished goods and services.

Organizations

The following organizations support and promote operations management:

• APICS The Association for Operations Management
• Association for Professionals in Business Management (APBM)
• Chartered Management Institute
• European Operations Management Association (EurOMA) which supports the International Journal of Operations & Production Management
• Institute for Operations Research and the Management Sciences (INFORMS)
• Institute of operations management
• Production and Operations Management Society (POMS)