Critical Challenges in Operations Management

Operation managers face many challenges in the field of operation management. Consequently, operation managers need a wide range of skills and knowledge that cut across all the business functions. They should also be in a position to understand various business concepts such as products, business flows, customers, technology and the business community. It is also essential to cultivate problem-solving skills and adopting a participatory approach to the technicalities of business. This process also requires a level of intellectualism to accomplish.

Operation managers also face the challenge of dynamic business environments. The business environment keeps changing day by day and so, the operation managers have to keep abreast. Failure to do so may render them irrelevant. Operation managers need to understand various factors that impact on their customers. Such factors include political dispensation of a given region, prevailing economy and the target market. This is usually the case for customers, who now have more demands due to better information on the products, pricing and quality requirements. Managers have to place their products with unique values against their competitors.

Another challenge that operation managers face is keeping up with the process of globalization. Operation managers, therefore, have to think globally and act globally (Joseph, 2004). Most businesses can develop and grow if they go global. This is because domestic markets are usually too small and limited, and, therefore, cannot be relied upon to spur growth. Operation managers have to follow the needs and requirements of international markets in order to introduce successfully into them. However, operation managers may be unaware of the global market culture. This makes it difficult for them to go into international markets.

Social responsibility may be new keywords in the modern management, and an operation manager’s problem is to do business and maintain their social responsibility (Anil & Suresh, 2008). Whereas businesses need to make profits and increase value for their shareholders, actions and activities from their operations have to uphold social and environmental sanctity. Thus, operation managers face considerable challenge in balancing between making profits and addressing social and environmental concerns. Operation managers have to desist from unethical practices like production of low quality goods, or compromising on the cleanliness and safety of the environment.

Another major challenge facing operation managers is keeping production costs low. This calls for hard decisions to be made by operation managers, as they have to justify their actions to top management. In most cases operation managers have to explain the rationale behind increased costs as they strive to improve the firm’s productivity. Justification of cost and budgets are also essential to convince the top management that the operation function is being managed effectively (Anil & Suresh, 2008). A good example is the decision made to reduce the number of employees in a given organization in a bid to bring down the cost of production. This is a decision that may be difficult as it would go down the wrong way for some of the parties concerned, especially the workers facing the imminent retrenchment.

The most serious challenge facing operation managers is lack of capital (Joseph, 2004). As an organization grows, it encounters financial constraints in the form of limited capital. The organization can make a profit, but this may not be enough to stimulate operations of the firm. More often than not, operation managers rush to banks and other financial institutions for financial aid. However, their requests may be turned down for various reasons. Some operation managers may fail to understand why financial institutions may fail to provide financial assistance to their organizations.

Lack of management skills is one of the problems which are extremely hard to deal with in most humble and medium enterprises as the size of the senior management team is necessarily limited (Joseph, 2004). These areas of weakness include lack of capital, human resources, marketing or any place where the current leadership does not have expertise or time to deal with the issue. In addition, the existing managers may not possess the relevant experience to manage their tasks appropriately. This is because smaller organizations may not be able to provide experts.

Essentially, operation managers have tough job in their hands. Most of the challenges they face surface from the fast changing world of business, therefore, need to prepare themselves with extensive skills and knowledge, and be able to adapt to the global environment. They also have to defend the costs of operations by ensuring increased financial returns and sustainable profits. Furthermore, operation managers always have to balance between making profits for the company and their corporate social concerns to business environment.