Operational management - what is it?

Operational management (or operations management) deals with current tasks, but this does not mean that the decisions made within it are not important. On the contrary, without the solution of everyday tasks, the company's activities are impossible.

Operational management is actually the development of decisions concerning the reduction of costs for the company's activities without loss of quality of the results of this activity. Thus, operational management in the solution of everyday tasks deals with the overall optimization of the company's work.

Successful operating decisions are often copied by competitors, so they are rarely an advantage, at least for a long time. But this does not mean that it is not necessary to look for non-standard solutions that allow optimizing the company's activity: pioneers, as a rule, still remove some of the cream.

The function of operational management is often one way or another dispersed across the various services of the company. This allows the chiefs of these services to optimize production processes within their segments, which ultimately will have a positive effect on the activities of the entire company.

Undoubtedly, operational management should be based on strategic. For example, the management of the airline, which is positioned on the market in the low-cost segment, is unlikely to decide to serve on board a three-course lunch, the cost of which will be included in the ticket. Such a decision would be irrational. Or the manufacturer of luxury segment products can not reduce the cost of production by using cheaper raw materials: this can affect Quality of the final product.

The study of operational management within the university or in-service training is undoubtedly useful for middle and senior managers, since in the organization of the company and its management, in addition to experience, theoretical and practical knowledge is needed.

In addition, knowledge of the basic principles of operational management will be useful in assessing the performance of the company in general. Studying this discipline is useful not only for managers, but also for accountants, financiers, marketers and even programmers.

Operational analysis in financial management, as part of short-term planning, helps to track the dependence of the company's performance in monetary terms, that is, profit on production costs and its volumes.

This analysis is often called the break-even analysis, because it can calculate, including the volume and nature of production, in which the company's financial results will be zero. It also helps determine the company's profitability threshold and allows predicting the financial consequences of making certain decisions.

Thus, operational analysis and operational management are closely related, so that entrepreneurs and managers must own these disciplines, so that the company not only continues its activities, but also develops as efficiently as possible.