Operations Management: What Is It and Why Does It Matter?

Written by Coursera • Updated on

Learn about the operations management field, careers, and the different types of roles available.

[Featured Image] Four members of the operations management team, two men and two women are meeting around the conference table.

Operations management is the execution of backend business functions like manufacturing, inventory, and quality control to ensure market-ready products and service. Whether it’s a single operations manager or a whole department, excellent operations management helps ensure business efficiency.

What is operations management?

Operations management is the administration of business structure, practices, and processes to enhance efficiency and maximize profit. It refers to the management of functions that a business needs to run effectively day-to-day, including:

  • Overseeing multiple departments and providing goals

  • Overseeing and streamlining processes

  • Balancing revenue and costs

  • Developing strategies

  • Working on production and logistics

Why is operations management important?

Business operations underpin all that a business does, its performance, and whether it turns a profit. Poor business operations can threaten a business’s survival, so operations management must ensure that processes are efficient, the right staff are employed, equipment is fit for purpose, and the business’s physical locations are profitable, ethical, and safe. Strong operations management benefits the business as a whole. 

Working in operations management 

Working in operations management as an operations manager, purchasing manager, or similar is a leadership position. Individuals in such roles are responsible for overseeing multiple teams or departments, combining administrative and management responsibilities, and leading day-to-day operations within the business. 

Common duties

Duties vary according to the nature of the company and the specific role, but in general, someone working in business operations is responsible for:

  • Evaluating, designing, and implementing business processes

  • Managing logistical processes and supply chain

  • Overseeing production, distribution, and quality assurance

  • Managing and analyzing financial budgets

  • Making strategic decisions and engaging with other senior staff members on business strategy 

  • Supervising employees

  • Supporting HR with recruitment initiatives

  • Building relationships with stakeholders and suppliers

Skills

Working in operations management requires a variety of skills, including:

  • Leadership ability

  • Organizational skills 

  • Interpersonal skills

  • Problem-solving ability

  • Process improvement

  • Project management

  • Financial acumen

  • Business acumen

  • Detail-oriented approach

  • Communication skills

  • Decision-making ability

  • Excellent time management 

Read More: Why Is Workplace Communication Important? And How to Improve It

Career paths in operations management

A career in operations management can come in many forms, from general business operations roles to more niche, specialized options. 

Business operations manager

Average salary (US): $81,613[1]

Job outlook: 8 percent growth from 2020 to 2030 (average growth rate) [2] 

Job description: A business operations manager is an all-encompassing role that can be found in businesses of any size. A business operations manager makes data-informed strategic plans to improve operations. 

Education: Business operations managers typically have a bachelor’s degree in business administration, finance, or management. A master's or doctoral degree in a business-related subject is typical for more senior positions. 

Experience: Starting in an entry-level role and working your way up is common. To understand business functions and make improvements, developing business knowledge is essential. Management experience is also crucial for this role, so business operations managers tend to have at least five years of experience before taking on this job. The salary for a business operations manager can rise to $208,000 or more for the most senior positions [2].

Purchasing manager

Average salary (US): $84,877 [3]

Job outlook: 4 percent decline from 2020 to 2030 [4

Job description: A purchasing manager buys products, goods, and services for resale by their company. Their job is to secure the best and highest quality products at the lowest price to sell and make a profit. A purchasing manager is likely to have buyers or purchasing agents they manage or oversee. 

Education: People in this position usually have a bachelor’s degree and relevant experience. 

Experience: Usually purchasing managers work their way up from a role such as a buyer or spend time working in procurement and, with experience and time, land a management position. The salary for a purchasing manager can rise to average highs of $206,540 [4]. 

Materials manager

Average salary: $90,987 [5]

Job outlook: 4 percent decline from 2020 to 2030 [4]

Job description: A materials manager is responsible for procuring, storing, and distributing a company's inventory and stock. They research prices, monitor stock levels and negotiate prices and contracts. 

Education: Materials managers (also known as procurement managers) typically have a bachelor's degree in a relevant subject, such as logistics or business administration, and work experience in the field. 

Experience: Some positions will ask for management experience, but this is not a blanket requirement and will depend on the company. The salary for a materials manager can rise above $137,000 [5]. 

Operations research analyst

Average salary: $101,610 [6]

Job outlook: 25 percent growth from 2020 to 2030 (much faster than average) [7]

Job description: Operations research analysts help companies make important decisions relating to cost-effectiveness, staff resources, supply chain, and product placement through high-level statistical analysis and mathematical modeling, data mining, and optimization techniques. 

Education: A bachelor’s degree or higher 

Experience: Work experience and completion of additional courses to demonstrate knowledge and expertise in math and computer science

How to become an operations management professional

The guide below offers steps to follow to start your career in operations management, including on-the-job experience, education, and professional certifications to consider to help you stand out.

Consider a bachelor’s degree.

Jobs in operations management typically require a bachelor's degree in a business-related subject such as business management or business administration. These programs focus on relevant subjects like finance, business management, economics, business communications, and logistics. Another option to consider is a bachelor's degree specific to an industry, such as economics, finance, or the law. 

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Gain relevant professional experience.

Working as an operations manager typically requires about five years of experience. Get your start in an entry-level position, such as an operations supervisor, or by gaining work experience as a buyer and taking on more senior responsibilities to build management experience. 

Consider pursuing a graduate degree.

In the highest level roles, operations management professionals often have master's degrees or, more specifically, a Master of Business Administration (MBA). MBAs focus on leadership as well as finance, management, and marketing, with some offering specialist classes in logistics and operations. 

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Advance with certifications and certificates.

Certifications and certificates in operations management indicate that you have a deeper knowledge of your subject area and a higher level of proficiency, which can increase your job prospects. Several options are available at various levels, from the undergraduate level to the graduate level and those with no educational requirements. 

Undergraduate level certificates offer basic knowledge in the field, such as using management software. Graduate-level certificates go deeper and build on a bachelor’s degree with skills like leadership in a corporate environment and process improvement. 

Certifications with few or no educational requirements are wide-reaching and include popular options such as the Certified Business Professional (CBP), offered by the International Business Training Association, and Certified Purchasing Professional (CPP) from the American Purchasing Society.

Next steps

If you are interested in a career in operations management and would like to learn more, especially as it applies to supply chain management, consider taking Supply Chain Operations, part of the Supply Chain Management offered by Rutgers University. You could also consider Operations and Supply Chain Decisions and Metrics from the University of Illinois to learn more about operations within the manufacturing and service industries. 

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Supply Chain Operations

Have you ever wondered how products and services are created exactly the same thousands of times over? And how companies are able to smooth out operations ...

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(3,498 ratings)

70,097 already enrolled

BEGINNER level

Average time: 1 month(s)

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Skills you'll build:

Lean Six Sigma, Supply Chain, Six Sigma

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Operations and Supply Chain Decisions and Metrics

In this course, you will learn about the role of operations and how they are connected to other business functions in manufacturing and service-focused ...

4.6

(1,106 ratings)

42,072 already enrolled

Average time: 1 month(s)

Learn at your own pace

Skills you'll build:

Supply Chain, Inventory, Process Analytics, Operations Strategy

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Article sources

1. Glassdoor. “Business Operations Manager Overview, https://www.glassdoor.com/Career/business-operations-manager-career_KO0,27.htm.” Accessed June 2, 2022. 

2. US Bureau of Labor Statistics. "Top Executives, https://www.bls.gov/ooh/management/top-executives.htm#tab-5.” Accessed May 14, 2022.

3. Glassdoor. "How much does a Purchasing Manager make?, https://www.glassdoor.com/Career/purchasing-manager-career_KO0,18.htm." Accessed May 31, 2022.

4. US Bureau of Labor Statistics. "Purchasing Managers, Buyers, and Purchasing Agents, https://www.bls.gov/ooh/business-and-financial/purchasing-managers-buyers-and-purchasing-agents.htm#tab-5." Accessed May 14, 2022.

5. Glassdoor. “Materials Manager Salaries, https://www.glassdoor.com/Salaries/us-materials-manager-salary-SRCH_IL.0,2_IN1_KO3,20.htm?clickSource=searchBtn.” Accessed May 14, 2022.

6. Glassdoor. "How much does an Operations Research Analyst make?, https://www.glassdoor.com/Career/operations-research-analyst-career_KO0,27.htm.” Accessed May 31, 2022.

7. US Bureau of Labor Statistics. “Occupational Outlook Handbook: Operations Research Analysts, https://www.bls.gov/ooh/math/operations-research-analysts.htm." Accessed June 2, 2022.

Written by Coursera • Updated on

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