Operations Management (OM) is the functional area of business primarily devoted to the creation, planning, and management of the resource capabilities used by a firm to create products or services.
The resource capabilities are comprised of the workforce (e.g., skills), technology (e.g., manufacturing equipment and information-based technology), and processes (e.g., supply chain, inventory-distribution system, quality control system, material flow system, production planning methods, monitoring system, etc.), all of which typically represent a significant portion of a firm's total costs and controllable assets.
Since resource capabilities determine the types of products and services a firm can offer to the marketplace as well as the associated cost (price), quality attributes, and lead times necessary to meet demand, the operations function is a critical driver of competitive advantage. Moreover, recent forces such as technological change and increased competition in cost, time, and quality have elevated the extent of distinctive competence that can be obtained from the effective management of the operations function.