Challenges That Face Operation Managers

Operation managers play a central role in stabilizing an organization's policies and procedures across
major business areas including finance, planning and technology. In small businesses, the role of the
operation manager is often assumed by the business's owner or its general manager. The job involves
overseeing the company's strategic approach to its on-site operations.

Competing Practices

Managing the competing business practices within an organization is a major challenge for an operation
manager. The finance function of the business may prefer to communicate via email, for instance, while
the human resources director may prefer written memos. These differences in business procedure can
have a detrimental effect on operations when they impact the effectiveness or efficiency of delivering
quality goods and services. A weak communications process can hamper the processing of orders or the
payment of invoices. Operation managers can end competing practices by instituting company-wide
standards. Even in small businesses where one person might handle several functions, all team
members should understand how the organization operates and follow those procedures. The operation
manager's job is to ensure that everyone is using the same methods, is following the same policies and
is communicating openly.

Sustainability

Operation managers are tasked with creating long-term customer and employee strategies that
acknowledge the organization's impact on the social, cultural and economic environment. Many
companies have adopted "green" or environmentally friendly strategies as part of a focus on
sustainability. These strategies seek to eliminate waste and turn the company's attention to
minimizing negative effects on the environment that reduce the well-being of local consumers.
Developing business policies that encourage transparency are also part of the sustainability push.
This can be a particular challenge to operation managers in small businesses, because these work
environments tend to be more insular than larger corporations. Creating a set of sustainable
business practices impacts the organization's relationship with its employees and customers.

Corporate Reporting

Many operation managers are responsible for corporate reporting, including the compilation of
financial and performance data, the communication of this data to stakeholders and regular audits
of the organization's financial books. Challenges can arise in corporate reporting when the
business hasn't kept current or accurate records. In the small-business setting, record keeping can
sometimes take a back seat to more pressing concerns like meeting customer demands or keeping
production levels high. Nonetheless, full and complete record keeping on profits and losses as
well as sales goals and expenses is necessary to assess the company's long-term viability.
Social Responsibility

In many ways, social responsibility is related to sustainability, but this function of the operation
manager looks specifically at how the business engages with its local community beyond trying
to get consumers to buy its products. Many businesses choose to get involved with nonprofit
organizations, to sponsor local sports teams or to volunteer in local schools. While these can be
challenging projects to organize, a business's community involvement gives its neighbors a sense
that the company cares about its surroundings and its customers on more than just a profit level,
and it raises awareness of the business and its brand. Social responsibility, therefore, is a form of
marketing and public relations.

Concerned over productivity

Operations managers are increasingly feeling the pressure to push employees to work faster and better.
The key questions that arise are: How can we get the team “up to speed" and performing their duties
quickly and successfully? How do we ensure continued success after the initial training ends? How do
we best engage employees so that they remember the knowledge and skills learned during training
sessions and are able to apply it once they are back at their desks?

To address these questions, operations managers are turning to a new software solution called
Performance Support. As its name suggests, it is designed for performance. The purpose of
performance support is to deliver real-time guidance and/or automation so that employees can
accomplish their tasks more quickly, with fewer errors, while on the job. Another advantage is
that employees don't have to stop for re-training every time something is new or changed.

Related reading: Telecoms Crack Down on these 8 KPIs with Performance Support

Need to improve process quality

From keying errors to compliance issues, employee errors can come at a high cost to an
organization, especially if you consistently notice similar errors by multiple users. One way to
prevent quality issues that stem from employee error is to use technology. Performance support
prevents employee errors by adding a safety net around possible pitfalls. Using these systems,
companies can easily add custom validations to problematic processes and forms. When an
employee enters information into an application, the performance support software makes
calculations and checks the validity of the entered information. It will alert the worker if there is
an issue and suggest corrections or will automate the process.

Here is a real-world exampleof how a leading cable provider used performance support to reduce
(in some cases eliminate completely) keying errors resulting in significant cost savings for the
company.

Worried about customer satisfaction

Worrying about the customers is not only the sales department's job. Investigating customer
satisfaction and reporting any issues also falls on the shoulders' of operations. But where do you
start? Recent research suggests that no single KPI has a bigger impact on customer satisfaction
than First Call Resolution (FCR). In a study of more than 150 call centers, the Service Quality
Measurement Group (SQM) found that for every 1% of improvement in the FCR there is a
corresponding 1% improvement in customer satisfaction. SQM also found that call centers that
achieved “world class” customer satisfaction ratings had a FCR average of 86%, while centers
that were not among the elite in customer satisfaction had a FCR average of only 67%. Call
centers with higher FCR rates also typically enjoyed lowered operating costs and happier
employees.

The key to improved FCR is providing your customer-facing employees with the relevant
information at the right time in a manner that allows them to focus on the
customer. Performance support provides desktop automation and real-time guidance that
constantly monitors the agent's desktop activities and can be designed to suggest support
processes that are relevant to the user’s current open and active application and window or
automatically perform the action to complete the desired task.

Related reading: Improve Customer Satisfaction and Boost Sales in 3 Easy Steps

About to deploy a new enterprise-wide application

Although you are confident that the fancy new system you are deploying is merited and
necessary, an application rollout can be a nightmarish experience. Pitfalls lurk in every corner
but often involve things like loss of productivity during the training period, management unable
to provide the promised resources, key performance indicators and deadlines being missed, and
fearful employees refusing or unable to adopt the new business applications.

So what can you do to reduce the risk and ensure a successful application rollout and employee
adoption? Involving key personnel and stakeholders early in the process will ensure informed
decisions are made at key junctures. Open communication channels, extra support during the
transition and performance support for employees will yield a better understanding, commitment,
and faster adoption from all people expected to use the software.

Related Reading: Take the stress out of your new application rollout

Buried under a mountain of reporting

Many operation managers are responsible for corporate reporting, including the compilation of financial
and performance data and the communication of this data to stakeholders. Challenges arise when the
business hasn't kept current or accurate records. Comprehensive record keeping on P&L as well as sales
goals and expenses is necessary to assess the company's long-term viability. On the flip side some
companies collect and report a vast amount of everything that is easy to measure and as a consequence
their managers end up drowning in data while thirsting for insights. Effective operations managers
understand the key performance indicators of their business and distill them down into the critical KPIs.
Unresolved conflicts between departments
Let's face it - sometimes the office resembles a school yard. You have different groups, with varying
agendas, who all think that they know best. Managing conflicts or competing business practices within
an organization is a major challenge for an operations managers, who are often left feeling like a school
principal. For instance, a company's development team may frequently be in conflict with its marketing
team about various goals and decisions while marketing, in turn, in conflict with finance. These
departmental clashes can have a detrimental effect on operations when they impact the efficiency or
productivity. Operation managers can end competing practices by instituting company-wide standards
and goals and encouraging open communication.

Difficulty recruiting the right talent

Finding and keeping good people is not easy. If in our previous analogy you were a school
principal, now you are the sports coach - motivating people through hard times, training,
educating, and managing diversity and cultural differences. This can be especially daunting
during periods of change or growth in which companies needed to hire in large numbers. A well-
planned and well-executed onboarding process will increase the chances for a positive work
experience leading to a win-win relationship between the new hire and your company.

Related Reading: Employee Onboarding: So you hired them...what now?

The role of operations management

Operations management involves planning, organizing, and supervising processes, and make necessary
improvements for higher profitability. The adjustments in the everyday operations have to support the
company’s strategic goals, so they are preceded by deep analysis and measurement of the current
processes.

Operations managers in almost any business are key personnel in upper-level management that make
sure the company is performing to its best potential. They keep their eyes on multiple areas within the
company, assuring productivity and efficiency while seeking to reduce costs. They manage other key
leaders within several departments and guide groups of people to complete their individual tasks in
order to achieve company-wide goals.

A Big-Picture Perspective

Because they are responsible for the overall well-being of the company's operations, these types
of managers tend to have a big-picture perspective. They are able to determine needs within the
company and connect groups to work together to solve problems as they arise. They need to be
critical thinkers who can analyze situations and make decisions geared toward the company's
best interests rather than those of a single department. This may mean that they also need to
resolve conflicts as they arise between employees and set policies and guidelines for how to
complete tasks.
In terms of skills and abilities, operations managers need a healthy mix of hard and soft skills.
Depending on the industry, managers may need mechanical aptitude and knowledge of
manufacturing equipment, but most certainly will use computers and a variety of related software
programs, including customer management tools and budgeting and accounting software. They
also need to be able to manage people effectively using good listening, motivation and
communication skills.

Oversight of Financial Information and Budgets

A large part of an operations manager's job is to oversee the creation and administration of
budgets within each area of the company. Strong leaders will regularly monitor expenses and
curtail a department's spending if necessary to keep the company on budget. They will also
engage in cost-benefit analysis, seeking to obtain the best price for materials and oversee
production methods so that output is at peak efficiency levels.

Supervise Supply Chain and Inventory

Another area of oversight is the management of supply chain procedures and inventory tracking.
In order for the production teams to operate effectively they need to have a steady supply of
materials. Similarly once their job is completed, finished products must be properly inventoried
and then sent out the door and up the supply chain to retailers or direct customers. While each
department is busily doing its specific job, operations managers have their eyes on the entire
process and can intervene and make adjustments as needed.

Workflow and Staffing

Operations managers also have a good handle on the staffing requirements of the organization.
They work with HR to hire and train new employees and handle disciplinary issues. Because
they are aware of the needs in each department, they can adjust the workflow and reassign tasks
to improve efficiency in the operation.

Operations Managers in Various Industries

While operations managers all use a wide variety of skills to do their job, some, particularly in
large companies, may specialize in an area and focus within a particular department. For
example someone with a strong background in human resources may become an HR operations
manager, overseeing the entire department. Some of their specific responsibilities may include:

 Create and manage the department's budget

 Define company policies and implement training
 Monitor internal HR systems and ensure compliance
 Oversee hiring objectives and job description creation
 Stay on top of employment trends, legal issues and best practices
 Purchase software or other tools to improve department efficiency
Managing in a Small Operation

If a business is particularly small or offers a service rather than manufacturing a product, the
terminology for this role may be slightly different. An office manager will typically function in a
very similar capacity, supervising the overall functioning of business operations, including
finances, staffing, policies, marketing and goal-setting. Whether the company is large or small,
the position still is essential for the company's overall success.

Key Takeaways

Key Points

 The goal of operations management is to maximize efficiency while producing goods and
services that effectively fulfill customer needs.
 Operations is one of the three strategic functions of any organization.
 Operations decisions include decisions that are strategic in nature, meaning that they have long-
term consequences and often involve a great deal of expense and resource commitments.

Key Terms

 strategy: A plan of action intended to accomplish a specific goal.

 tactic: A maneuver or action calculated to achieve some end.
 Operations management: Management of processes that transform inputs into goods and
services that add value for the customer.

Required skills

The skills required to perform such work are as diverse as the function itself. The most important
skills are:

 Organizational abilities. Organizing processes in an organization requires a set of skills

from planning and prioritizing through execution to monitoring. These abilities together
help the manager achieve productivity and efficiency.
 Analytic capabilities/understanding of process. The capability to understand processes
in your area often includes a broad understanding of other functions, too. An attention to
detail is often helpful to go deeper in the analysis.
 Coordination of processes. Once processes are analyzed and understood, they can be
optimized for maximum efficiency. Quick decision-making is a real advantage here, as
well as a clear focus problem-solving.
 People skills. Flaws in the interactions with employees or member of senior management
can seriously harm productivity, so an operation manager has to have people skills to
properly navigate the fine lines with their colleagues. Furthermore, clear communication
of the tasks and goals serves as great motivation and to give a purpose for everyone.
 Creativity. Again, problem-solving skills are essential for a creative approach if things
don’t go in the right direction. When they do, creativity helps find new ways to improve
corporate performance.
  Tech-savviness. In order to understand and design processes in a time when operations
are getting increasingly technology-dependent, affinity for technology is a skill that can’t
be underestimated. Operations managers have to be familiar with the most common
technologies used in their industries, and have an even deeper understanding of the
specific operation technology at their organizations.

THE MAJOR PRINCIPLES OF OPERATIONS MANAGEMENT

 Reality. Operations management should focus on the problem, instead of the techniques,
because no tool in itself would present a universal solution.
 Organization. Processes in manufacturing are interconnected. All elements have to be
predictable and consistent, in order to achieve a similar outcome in profits.
 Fundamentals. 80% of success comes from a strict adherence to precisely maintaining
records and disciplines, and only 20% comes from applying new techniques to the
processes.
 Accountability. Managers are expected to set the rules and the metrics, and define
responsibilities of their subordinates, as well as regularly check if the goals are met. Only
this way would the workers put in the necessary efforts.
 Variance. Variance of processes has to be encouraged, because if managed well, they
can be sources of creativity.
 Causality. Problems are symptoms: effects of underlying causes. Unless the causes are
attacked, the same problems will appear again.
 Managed passion. The passion of employees can be a major driver of company growth,
and it can be instilled by the managers if not coming naturally.
 Humility. Instead of a costly trial and error process, managers should acknowledge their
limitations, “get help, and move on.”
 Success. What is considered success will change over time, but always consider the
interest of the customer. In order to keep them, all the other principles have to be revised
occasionally.
 Change. There will always be new theories and solutions, so you should not stick to one
or the other, but embrace the change, and manage for stability in the long term.

THE ACTIVITIES OF OPERATIONS MANAGEMENT

There are three major groups of activities performed by operations management, deriving from
its planning or designing, organizing, and supervising functions. All activities involve
considering assets, costs, and human resources, and are preceded by a thorough analysis of
processes.

Design

Before planning processes or designing products, operations management should be busy

analyzing the market to test the demands. If it delivers promising results, e.g. a niche to target or
a new product or service to develop, you can start planning.
In most cases, planning involves designing a new product, from the initial concept to the actual
launch, with several testing phases involved. During planning, you will have to consider both
technical and business requirements.

Sometimes the processes need to be updated: designing a new supply chain or other logistics
processes. If your product is a service, process design aims for a variety of requirements and
customer contact levels.

Again in other cases, it’s about a new facility: your company decides to expand its operations,
and you will have to decide on the location of the facility, its capacity, and its layout.

Plans should always support the business objectives: they are in focus when considering the costs
and finding the best matching quality and capacity, or calculating inventory and human labor
needs.

Therefore, it is important to set proper measures in the planning phase, to know if the actual
performance meets them, or there is need for adjustments. Capacity is one of these measures, as
is product quality, or delivery times. The initial figures are usually estimates based on the market
analysis conducted beforehand.

Management/Organization

So you have a facility for production, your product design is ready, and so is the way it will be
produced: with what material and human resources, at what costs, with what workflow.

This is a solid starting base for maximizing the efficiency of your operations. Still, you will need
constant and competent management to correct the accidental mistakes in planning, to adjust
production to changing costs or regulations, and keep them efficient on many levels.

The operations manager selects and schedules the processes for an optimal result and does the
same with materials for an ideal quality and capacity. Organizing the maintenance of the
equipment is also part of the quality management activities. Furthermore, the inventory and the
whole supply chain has to be managed in order to produce more efficiently.

As in all management functions, the management of human resources is an essential activity. In

operations management, the planning of actual employment levels can have a great impact on
whether an organization can operate effectively.

Improve

There is always room to improve when it comes to the processes used, the quality and capacity
achieved, or as far as the level of inventory and human resources are concerned.

A great deal of operations management’s tasks, therefore, comes from these needs, and this is
where long-term planning steps in. But remember, changes made according to these plans are
only as good as the improvement they bring in business terms.
A better way to forecast demand gets you closer to an improvement of processes, as savings on
costs and delivery times occur. The quality of a product will be higher if you have Total Quality
Control established and assess the operational risks correctly. Inventory control accounts for a
better use of supplies. With Just-In-Time manufacturing, the capacity issues can be solved.
Collaboration is a common go-to strategy that you can use to improve the effectiveness of your
human resources.

As a general advice, you can always consider adding some technology in the mix. The best way
to do that is to develop a technology plan: identify where the company is now, in which areas it
would need a boost, what relevant technologies are available, and which ones are feasible to
implement.

Trends in Operations Management

1. Investment in the Employee Experience

Finding enough people with the right skills and talent is one of the top operational challenges for
business. In response to this hurdle, businesses are investing more in the personal growth and
development of their labor force.

Promoting transparent, accessible internal communication is one method that will prove effective for
specifically recruiting and retaining millennial employees – who look for feedback forums, clear
expectations of their performance and workplace, and need to know their work matters and serves a
meaningful purpose.

2. Implementation of Mobile Communication Tools

If your business’s operations and internal communication are not mobile, you’re missing out. Whether
you’re in the technology industry and rely on mobile devices to achieve sales targets, or you’re in the
hospitality business and need client portals to reach your target market, mobile accessibility will
continue to play a vital role in operations management.

Apart from today’s reliance on mobile devices for communication, consumers also turn to their smart
devices for everything from household goods to travel accommodations and job applications.

3. Automatization

Automating internal processes throughout your business can save money and increase
efficiency. Online reservation services, automated chatbots, inline translation functions, and
mobile hotel check-in features are only a handful of examples of business dependency on
technology.

By dedicating machines to specific business tasks, companies are freeing up employee time for focusing
on their products and their customers. Rather than assigning an employee to monitor the company
website and answer the same questions multiple times, programming a chatbot to respond to FAQs
saves time and resources.

4. Data-Backed Performance Measurement and Employee Analytics

Solid performance data gives companies the intel they need to implement changes in areas from
development and production to customer service.

5. Gathering Workforce Feedback

Beyond sales figures-based analytics, consistently gathering employee feedback through surveys
contributes to better business overall through improved goal alignment and transparency.

6. Improving Demand Responsiveness

Operations managers will continue to hone and develop demand-responsive supply chains.
Consumers spending habits are becoming increasingly fickle. Volatile market fluctuations are
more common than ever.

Operations managers will have to master the art of demand forecasting in order to ensure that
inventory levels are consistent with current demand.

7. Strengthening Customer Relationships

It's essential that operations managers understand the factors that influence buying decisions and
optimize the business accordingly. The role of an operations manager is evolving beyond simply
acting as an agent of cost control. Operations is increasingly tied to global performance
objectives which encompass everything from product quality, delivery time, to customer
service.

Operations mangers will work closely with customer service departments to better understand
their end users. Relationship management is more important to running a successful business
than ever, so it's no surprise that operations managers will find new way to optimize the process.

Management Traits

Overseeing the operations of any business is a career in which the right business-minded individual can
truly succeed. An operations manager is tasked with ensuring that operations are both efficient and
effective. However, this requires not only understanding a business’s overall goals and objectives, but
using that information to run the business successfully. At its core, the skills needed for a successful
career in operations include the ability to think analytically, communicate effectively, and execute
efficiently.

Establishing an effective operations process involves strategy development with some trial and error,
but skilled operations leaders can shape efficient and effective business processes by employing a few
important traits.
1. An Operations Manager is Realistic

A strong operations leader understands that employees are a valuable resource and can
effectively communicate with operations staff. That not only means delivering the hard facts and
providing thoughtful and constructive feedback, but listening to empowered employees who are
part of the same team.

Results showed from a 2007 study “The Relationship between Transformational Leadership and
Leader-Member Exchange in Different Cultures” 1showed that teams with strong and trusting
leadership positively impacted team members' individual and collective performances. As an
example, if an operations leader realizes that production is slowing down, costing the company
revenue, communicating directly with employees might be a better approach. Effective
organizational leaders can impress upon employees the need to improve and explain the
reasoning behind the request. If a goal cannot be reached, employees are empowered to share
with management the necessary information for developing alternative, achievable plans.

2. An Operations Manager Looks for Efficiency

An effective operations manager is defined as the master and commander of managing the input
and output of resources. These professionals optimize processes to decrease the cost of goods per
unit, making it possible to sell at a lower cost and leaving a margin just high enough to remain
agile in competitive business environments. Processes executed in this fashion are typically able
to reward the hard work of the teams involved in production. What is the secret weapon?
Efficiency.

Today’s efficiency models date back to the 1950’s when Toyota shifted to a “just-in-time (JIT)”
model, focusing purely on production costs, product quality and delivery, and worker
involvement to minimize excess time and overall costs. This model became the foundation for
today’s more commonly used efficiency model, lean manufacturing. Production from a system
pushing out products in batches is taken to a flowing system that systematically produces single
units as needed, at an optimum cost.

An operations manager need to make sure focus remains on the organizational objective, rather
than the narrow focus of different department and division goals. In order to accomplish this,
operations leaders must implement areas of flexibility into all stages of operations and facilitate
cross-functional communication, enabling adaptability between teams and departments.

3. An Operations Manager Focuses on Quality

In today’s marketplace, the focus on quality has progressed to ensuring value at the source.
Rather than use a supplier that has a rejection rate of 5% with provided parts, an effective
operations leader might go with a supplier who charges slightly more but has a lower rejection
rate to ensure the products lifespan and consumer satisfaction.

When operations leaders pay greater attention to quality, it helps to inspire their employees to
strive to meet leaders’ expectations. Not only does focusing on quality help operations leaders
maintain productive teams by fostering pride in a product or service, but it can also drive down
costs thereby helping an organization gain an advantage over the competition. For example,
investing in quality improvement ultimately drives down internal and external failure costs. This
increase in profit provides an organization with the flexibility needed to meet the price
reductions of its competitors, keeping it on par or even ahead of the competition.

4. Operations Leaders are Effective at Supply Chain Management

Supply chain management plays a vital role in the success of a company. Operations leaders
within an organization are working to design and execute supply chain strategies that maximize
productivity, minimize risk and effectively respond to fluctuations in demand. Supply chain
management encompasses the shaping of supply and demand along with the optimal design of
products themselves, creating a wide range of responsibilities. Operations leaders have begun to
treat their supply chain networks—consisting of logistics providers and contract manufacturers—
as partners, in order to align goals and effectively orchestrate collaboration across these groups.

As an operations leader, having effective approaches to supply chain management requires

knowledge of manufacturing, warehousing, logistics and transportation as well as customer
service. Products need to be delivered to consumers in timely, cost-effective ways that also meet
demands—in other words, the right products, in the right place, at the right time!

5. Operations Leaders Do Not Manage; They Lead.

It is only when goals are not met that leaders delve further into operations to determine where
problem areas might lie. For leaders that feel the need to maintain a close eye on certain
operations, setting up periodic meetings with various managers and department heads allows for
close monitoring without manifesting an overt presence among staff.

Strong operations leaders work to make sure that staff is encouraged to perform to the best of
their abilities by providing the tools necessary to make tasks seamless. Maintaining healthy and
motivated teams is more than just applying strategies and project management tools to create an
optimum output result; it involves thoughtful leadership and management of each level of
involved human capital.

One of the hardest parts of being a great operations leader is identifying when a team member is
struggling to meet performance goals and addressing sensitive issues. Employees who aren’t
performing only reduce the effectiveness and efficiency of their co-employees, and identifying
possible solutions as a remedy is the difference between building trust in leadership and building
fear for one’s position in tactical positions. Operations leaders need to make sure their
management team keeps them informed of individuals who are excelling and individuals who are
falling behind. The ultimate goal should be consistency – encouraging top performers to perform
at their peak, and finding ways to bring underperformers up to standards.