What Operations Management Really Does (and Why It Matters)

When you order something online in a click or two, what you don’t see is the series of carefully-orchestrated business processes that happen behind the scenes. And you can thank the company’s operations management team for the seamless experience.

Operations management (OM) is key to a business’s profitability, reputation, agility, resilience, and long-term growth. Here’s a detailed look at operations management, why it matters, and some key trends shaping OM today. 

 

Understanding operations management

Operations management (OM) is all about keeping daily business activities running smoothly and efficiently. It’s the key to balancing costs with revenue, boosting productivity, improving quality, and making customers happier. When done right, OM helps businesses become more efficient, productive, and profitable.

It’s a big-picture role that involves creating strategic plans, setting goals, and coordinating across departments. The focus is on streamlining core processes like production and supply chain logistics to keep everything on track and working seamlessly.

The significance of operations management

Customer satisfaction, brand loyalty, and employee engagement all tie back to effective operations management. OM doesn’t just influence your company’s profitability; it also shapes its reputation and builds trust with stakeholders. When there’s strong internal support, it’s much easier to make process improvements that benefit everyone across the business.

From smooth production to quality control and happy customers, OM keeps the wheels turning. It also plays a huge role in shaping the employee experience. By providing teams with the right resources, training, and support, OM sets everyone up for success. When employees feel equipped to do their jobs well, they’re not only happier but more productive. This creates a ripple effect: better performance, higher retention, and ultimately a healthier bottom line and stronger competitive edge.

Core functions of operations management

Operations management may look slightly different depending on the industry and business model. But several core functions typically show up in OM. These include:

Product and service design

Operations managers contribute to product and service design by gathering and analyzing customer preferences and marketing trends in their industry. They may conduct market research, share discoveries, and even help guide the product design team in some cases. Slack, the work operating system, can facilitate this cross-functional collaboration. For example, when the operations team needs to connect with the product design team, everyone can join a huddle or share information in a designated channel to brainstorm ideas, ask questions, and get clarity.

Quality control

Operations management places a big focus on quality. After the design team develops a product, the operations team steps in to test it, ensuring that it meets quality control standards. This might mean running detailed tests to catch any defects before launch or conducting risk analyses to identify potential issues ahead of time. By addressing problems early, teams can avoid customer frustrations down the line.

To keep quality standards high, operations managers often rely on frameworks like Six Sigma or Total Quality Management. Adding workflow automation tools into the mix can make things even smoother, helping teams integrate quality management processes with the project management tools they already use — all in one place.

Process and capacity design

Successful production relies on well-designed processes and capacity planning, which is why process and capacity design are central to OM. Operations managers evaluate, design, and adjust production processes so they are as efficient as possible. They also calculate production capacity, spot and address production bottlenecks, and identify necessary process improvements. Balancing cost and efficiency is key, so operations managers aim to optimize the resources required to create a product. For teams that use Slack, Workflow Builder lets operations managers automate repetitive tasks and complex processes to save their team time.

Location strategy

If you’re starting a new company, relocating, or expanding operations, location is an important consideration. Location can influence operational efficiency, so when evaluating potential facility locations, you should factor in supply chain logistics, labor availability, proximity to the market, regulatory standards, and infrastructure. If you need to collaborate with suppliers or other external partners regularly, Slack Connect can move necessary conversations out of messy email threads and into your central work operating system.

Layout strategy

Facility layout shapes your production process and working conditions. To help, operations managers create and implement layouts that maximize productivity. Layout strategies often account for equipment and workstations and the flow of materials, work, information, and people within the facility. The biggest goals are waste reduction, optimized transportation, and operational efficiency.

Because employee satisfaction also strongly influences productivity, your layout strategy should also consider factors like noise levels, temperature control, ventilation, and lighting, which may affect employee morale. Operations managers can create a Slack channel to solicit team input and make informed decisions.

Supply chain management

Sometimes called operations and supply chain management (OSCM), this process covers supplier selection, procurement, logistics, and inventory management. Operations managers often make key decisions about production, pricing, sales, and distribution. They also monitor suppliers to ensure timely delivery of materials or services while staying within budget. Tools like Slack Connect can simplify this process, helping managers communicate quickly with suppliers and external partners to keep everything on track.

Inventory management

It’s important to monitor inventory levels for enough product to meet demand, especially during peak periods, while staying mindful of overstock. To address this challenge, operations management teams forecast customer demand, set reorder points, and implement inventory control systems. Slack can integrate with inventory management software like BoxHero to give operations teams real-time updates about stock levels and item movement on the same dashboard they already use to collaborate.

Scheduling

Scheduling helps teams manufacture products and deliver services quickly and efficiently. It also helps them properly balance resources with customer demand. Operations managers typically allocate resources, prioritize tasks, and coordinate different activities to make sure the company meets its production deadlines, maximizes resource utilization, and maintains consistent output. Among other integrations, Status Scheduler can help operations managers keep tabs on who’s in the office, who’s out on PTO, and who’s available for a quick huddle.

Challenges in operations management

While operations management is an essential part of any business, it comes with certain challenges. Here are some of the biggest obstacles operations managers face and how to overcome them.

Supply chain resilience

When the pandemic wreaked havoc on supply chains, operations managers had to confront unanticipated challenges, such as lack of agility, supply scarcity, and customer dissatisfaction. When companies empowered those with the best visibility into the situation — like supply chain managers and warehouse supervisors — to make big decisions, it helped address problems faster.

Supply chain issues don’t just come out of global crises, which is why operations teams must reinforce supply chains before disaster strikes. Digital tools and strategies can help teams respond quicker and more accurately to supply chain threats and opportunities and, in some cases, enable more decision-making authority among dispersed teams so they can act faster.

When one digital startup launched, it needed to connect crews working in different locations, knowing quick collaboration would be essential for success. The company chose Slack to bring dispersed teams together to discuss challenges and deliver fast results.

Digital transformation and tool adoption

To speed up manual processes, operations managers must integrate advanced technologies like AI and automation into the supply chain and other core business operations. And they need to do it in a way that doesn’t disrupt current processes, create lengthy learning curves, or introduce security threats. It’s a big job, but it’s important to replace inefficient business systems to save money in the long run. In fact, McKinsey found that manufacturers that embrace digital transformation and adopt new technologies achieve faster and more sustainable change than those that don’t.

A global hearing aids solutions company adopted Slack as its work operating system for the productivity capabilities that align with the demands of its hybrid business and tech organizational model. The company relies on canvases to organize large volumes of information and capture vital project details and brainstorming sessions, making it simpler and faster to put plans into action. Before Slack, team members had to use different tools to achieve the same outcomes. Now everything is centralized.

Siloed information and knowledge sharing

Many teams experience challenges when it comes to knowledge sharing and access to information. That can lead to several issues, including missed opportunities, duplicated efforts, and a poor customer experience. Challenges can also arise when employees — and all their knowledge — leave the company. To tackle these issues head-on, build a collaborative culture where sharing knowledge and making information accessible is the norm.

A Scandinavian HR technology and knowledge provider uses Slack for collaboration and knowledge sharing in its hybrid workplace. With dedicated channels for asking questions, colleagues can share knowledge, solve problems, and learn from one another, in one place. For example, when someone has a question, asking it in the appropriate channel alerts the whole team. Anyone can answer, and everyone has visibility, saving teams time while building a culture that promotes knowledge sharing.

Global competition

Today’s operations managers must keep close tabs on what their competitors are doing so they don’t fall behind. Understanding competitor practices and comparing their own operations with other major players in the industry can help them pinpoint opportunities and vulnerabilities.

It’s also important to gain insights into evolving customer preferences, which can directly affect a company’s competitive prospects. A New York–based clothing company found itself in a stronger position to do exactly that by integrating Slack with Salesforce. Associates can now easily access customer information and resources within Slack to get the details they need to offer customers personalized assistance at a moment’s notice.

Sustainability concerns

Even amid inflation, today’s consumers are highly concerned about the environment and sustainability. According to PwC, consumers are willing to pay a 9.7% sustainability premium. That makes it vital for operations management teams to consider sustainability as they balance cost with revenue.

Operations managers must now implement effective sustainability strategies and business practices to reduce waste and keep their companies compliant with environmental regulations. A custom-built-bikes company uses Slack for several reasons, including collaborative product development. Teams use workspaces and digital whiteboards to share photos, videos, and design files as part of the new-product design process. This approach can make it easier for teams of all kinds to brainstorm ways to reduce waste, innovate, and embrace new sustainability strategies.

Key trends shaping operations management

Several factors are shaping operations management practices today. For example, investments in warehouse automation are expected to grow by more than 10% per year through 2030, according to McKinsey. Here are a few of the biggest trends business leaders and operations managers should be aware of, and what they mean for your company.

• AI and automation: When successfully implemented, these advanced technologies can help businesses build supply chain resilience, address labor challenges, improve quality and safety, optimize space utilization, and boost efficiency. For example, embedding Slack AI into your workflows can complement automation, allowing you to delegate routine tasks to AI assistants and agents.
• Data and analytics: Data-driven decision-making is essential to modern operations management, especially for sales operations and other industries that rely heavily on data. Operations managers need analytics tools and capabilities that enable precise forecasting and real-time adjustments. Slack’s AI search and summarization tools make it easy for teams to find information and act on key insights fast.
• Lean management practices: Lean management creates maximum value for the customer using fewer resources. While this is not a new concept, digital tools and technology advancements help businesses find new ways to reduce operating costs, improve product and service quality, and maximize profits. For example, service teams that want to boost response times and customer satisfaction can use AI chatbots to provide 24/7 support and handle many routine tasks.

 

Operations management drives business efficiency

Operations management used to focus mainly on balancing costs and revenue, but today it’s taken on a much bigger role. Businesses now see it as a key driver of success. Operations managers handle everything from supply chain challenges and sustainability efforts to process improvements that enhance both customer and employee experiences.

To stay ahead, more teams are turning to advanced technologies like automation and AI-powered data analysis to boost agility, efficiency, and resilience. Whether your goal is to streamline processes, improve quality, or build a more adaptable supply chain, strong operations management supported by modern tools can help you strengthen your reputation and gain a competitive edge.

Discover how to run your operations more efficiently with Slack.