What Is an Operations Department

This is the heart of any organization or business, because it is this department that takes care of all day to day activities. It includes administration, logistics and other clerical functions of an organization.  Subject to the nature of functions it is otherwise also called as “backbone “office. This department is accountable for a varied range of activities. 

The kind of activities may differ from company to company. For example in financial services industries the operations department will be responsible for accounting, tax returns, legal, auditing etc. Here some times they are also responsible for some human resource activities such as disbursement of salaries, calculation of retirement benefits, medical claims of employees etc. As far as Brokerage Company is concerned they look into stock market activities, calls on whether to buy or sell shares, marginal profits etc.

In case of manufacturing organizations, it takes over the entire responsibility of functions of the business. Like the purchase of raw materials, factory overhead costs, wages of laborers till the process of manufacturing the raw material gets completed. In information technology companies, it is renowned as a serious module of the business. Since the operations department do hand in hand with the business in taking major decisions in all the activities of the organization. Though it is always called a back end activity center, now a day this department is gaining importance in all sectors of business.

In any given company the operations department is responsible for six segments of activities:

  • To design a service or product
  • To check product quality and to plan the process
  • To get the required material and plan for inventory purchase
  • To plan for the location of business
  • Facilitate layout and job design
  • Plan for supply chain management

The ultimate responsibility of an operations department is to the run the business successfully and to maximize the returns to its shareholders. Let us see the objectives of operations department:

  • Profitability: the members of this department are work on the day to day activity of the organization; hence it is in their hands to be accountable for the profitability. They know what kind of managerial techniques to be used in attaining the goals.
  • Work to increase sales: to achieve this they should maintain a very good sales team, which helps in planning what type of service or products is to be manufactured.
  • Managing people: employees are the paramount strength any company. The operations team is responsible for teaching and development of the employees hired. This department also helps in supporting employee performance and ultimately handles management processes.