Possible Challenges in Operations Management


Operations management has a vital role in coordinating and managing functional units, business process and rules across departments. It acts as the main thread that connects every activity within a business towards achieving the final outcome. Operations management involves administering and monitoring business activities to ensure that they are functioning with maximum efficiency.

An organization attains optimal performance only with the effective utilization of man, machine and resources involved. Operations management ensures this process balancing the costs incurred and inputs needed with the output obtained. It continuously strives to keep the profits high by reducing costs and increasing revenue. Due to this crucial nature of its functions, operations management encounters numerous challenges in the way of harmonizing all resources and processes. The possible challenges faced by operations management are detailed here.

Challenges in Operations Management

Operations management has various functions in an organization, including overcoming challenges. Major challenges faced by the Operations Management team are discussed below.

Simplify and streamline business processes

Simplifying complex tasks, logically organizing processes, eliminating duplication and streamlining the activities is a challenge operations team has to deal with. Weak and inefficient systems increase costs and create delay in processing output. Identifying such areas on a regular basis and making required process redesign is essential for performance improvement. Streamlining the system in which business operates helps to lower problematic process areas and facilitate managers to focus on more important and complex issues. Optimization of business process aids smooth functioning of functional units resulting in improved performance and quality.

Ensuring market stability

Market today is highly dynamic and demanding. Customized products based on personal preferences of customers are preferred over mass-marketed products. Such changes and accessibility to global markets through e-commerce have made customer preferences unpredictable.

Globalization has paved way to fierce competition across boundaries. Global players try to pitch in new unexplored geographical areas to market their goods to minimize risk and to enjoy monopoly, making it hard for the local companies to survive. New trends keep capturing the market on a regular basis. Operations management is bound to tackle this challenge to develop new systems to accommodate variety outputs in minimum cost.

Managing resources

Efficient management of workforce, equipment and material towards delivering quality goods with low operating costs forms the focus of operations management. However, administration of these factors poses challenge to operations management. Managing an increasingly diverse workforce, shortage of adequate skill supply, cost and availability of raw materials are challenges to be met by the operations team. Internal conflict resolution that could flare up between employees or departments also needs to be addressed. All these challenges come under the operations team to settle without further escalations.

Technology advancement

Information technology is regarded as one of the significant enablers of business process and techniques. Computer aided production units, automation software specific to functional units help ease regular and repetitive tasks. Technology keeps evolving and the challenge is to identify and invest in the right technology that is a best fit for the business. It can give the business a competitive advantage and reduce operating costs.

Operations management need to make sure that the existing business processes are effective and established to leverage optimal efficiency. Adopting technology without ensuring the performance of existing systems could result in failure of implementation and loss of funds. Integrating technology in a regular basis to stay updated is practically impossible for small to medium sized companies. An exhaustive research on the pros and cons of adopting a new technology should be done prior to investing in technology.

Satisfying customer expectations

Meeting changes in customer trends and preferences is the real change of today’s market. Customers need more value for their money spent to be satisfied. The pricing and quality of competitors create a real challenge for the operations team to stay ahead in the market. A new product with an add-on feature invokes interest in customers than a regular product with the same price tag. Many factors including technology, marketing strategies, innovative products, brand value, and service quality are subject to regular changes in the current dynamic market. Customer trends also change drastically based on these factors making it hard for operations management to anticipate and deliver within the given infrastructure and support.

Change Management

Change is inevitable for any business to meet market dynamics, but managing change is a huge challenge for the operations management team. Innovation, development and operationalization continue as a cycle for performance improvement. Business processes might need to be redesigned or restructured from time to time to optimize output.

However, adoption of new technologies and processes could lead to employee resistance as employee’s view change as a threat to their jobs. Communicating, convincing and managing resistance to change is a huge task. It is also challenging for the operations management team to streamline activities where employees are reluctant to accept change.

Regulations and economic reforms

Policy regulations and economic reforms add to the hindrances faced by the operations team. Policies enacted by Government governing business entities, economic reforms made in taxes, subsidies and change in export import duties are some examples that makes it necessary to align the business system within the new legal provisions. Such sudden changes might pose a threat for the operations management to handle. They are also forced to decide on pricing strategy based on market forces to thrive competition.

Reducing wastage and costs

Controlling and maintaining minimal resource wastage is a true challenge to operations management. Weak and inefficient systems, underutilized workforce, inadequate control mechanisms and complex long handoff processes result in resource wastage and high operating costs. Operations management is responsible for the productive management of costs and business wastage. Identification of wastage itself is a core challenge to the operations department. Studies report this as one of the main reason for start-ups to fail. Operations management should be competitive enough to recognize the activities that bring value to the company and eliminate those that do not. Techniques through which operating costs can be reduced should also be looked into to ensure sustainability.


Sustaining stable in the market makes any business successful in the long run. Internal and external factors can cause turbulence in the smooth operations of an enterprise. Natural calamities, global crisis like Covid pandemic situation, economic instability; all cause uncertainty for a business. Such situations create constrained supply chain, disrupted workforce availability, unstable markets and limited funds. Operations management has to find ways to face this challenge by evolving new business models to sustain. They are responsible to find solutions to retain market share and anticipate fluctuating demands to stay stable amidst such crisis.


Operations management is an inevitable part of any organization and they work in multidisciplinary environments. They must stay aware and alert of the possible challenges in business and effectively respond them on time. All challenges that come in the way of success should be managed with business and technical excellence. Operations management act as pillars that actively support the mission and vision of any organization. This will help the company excel and attract more customers resulting in high revenue and profits.

Updated on: 18-Apr-2023

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