What Does a Director of Operations Do?

For companies, corporations and organizations of all shapes and sizes, the efficiency of day-to-day operations is a critical component in helping achieve a healthy bottom line.

In many professional settings, ensuring operational efficiency is the responsibility of the director of operations, according to Anthony Allen, an adjunct instructor at Southern New Hampshire University (SNHU) who has 20 years of experience in supply chain and operations management.

Allen, who currently serves as vice president of recruiting at Supply Chain Talent Advisors — a specialized executive recruiting firm — said the director of operations role is a crucial one that oversees a range of important areas within an organization.

What is a Director of Operations?

The director of operations is typically an executive-level position that works with several other departments to help ensure they have the resources and workflows in place to maximize productivity and profitability, Allen said.

“A director of operations is responsible for overseeing the day-to-day activities within a company to ensure that operations run smoothly, efficiently and align with organizational goals,” he said.

The areas that you’ll oversee as a director of operations, Allen said, normally include things like:

• Inventory
• Logistics
• Production
• Quality control
• Supply chain management

“The director of operations has to make sure operational standards are met,” he said. “They manage budgeting, cost optimization and set benchmarks to track team performance.”

The role also can involve strategic planning, Allen said, and making adjustments to operations as company goals or market demands evolve.

What’s the Difference Between a Chief Operating Officer and a Director of Operations? 

Professional titles can sometimes be confusing, especially when they seem to overlap functions and areas of responsibilities, Allen said. Such is the case with the role of director of operations and another executive title that’s related to a company’s operations, chief operating officer (COO).

Both are high-ranking executive positions, Allen said. But there are differences in both rank and day-to-day responsibilities.

“While both roles focus on operations, the COO has a broader scope, often overseeing all operational activities across the organization,” he said.

According to Investopedia, a leading source of online financial content, key areas of responsibility for COOs include:

• Budget development
• Executing business strategy
• Financial operations
• Production oversight
• Recruitment and hiring

A director of operations is typically more focused on specific departments or locations, Allen said, taking charge of executing operational policies and strategies set by the COO.

“(A director of operations) is a senior management role, usually reporting directly to the chief operating officer or CEO,” he said. “Directors of operations have a significant influence on strategic decisions, resource allocation and implementing policies that shape the organization’s success.”

What Skills Do You Need to Be a Director of Operations? 

The director of operations is a critical role to the success of any organization, and requires a high level of organization and multitasking capabilities, Allen said. The most important skills that will enable you to succeed in the role, he said, include:

• Analytical abilities
• Knowledge of operational and supply chain processes
• Leadership and communication
• Strategic thinking

“Proficiency in project management and a solid grasp of budgeting are also essential for making informed decisions that align with company goals,” Allen said.

Possessing these essential skills is just one part of the equation when it comes to pursuing a career as a director of operations, Allen said. Typically, anyone who ascends to the position only does so if they have earned a bachelor’s degree at minimum, and in many cases a graduate degree.

“Most directors of operations hold a bachelor's degree in business, supply chain management, operations management or engineering,” Allen said. “An MBA (Master of Business Administration) or equivalent advanced degree can be highly beneficial, especially in larger organizations, as it provides additional strategic and financial insights critical for the role.”

Has AI Affected the Director of Operations Profession? 

As with many other career fields and professions, advances in technology and the emergence of artificial intelligence (AI) are impacting the director of operations profession in a number of ways, according to a 2023 article on LinkedIn.

The article states that some of the key ways AI is affecting business operations include:

• Augmentation of human capabilities
• Insightful data analysis
• Legal and ethical implications
• Personalization and customer service enhancement
• Task automation

Allen said advances in AI technology have had a significant impact on the field, and it will likely continue well into the future.

“AI-driven tools can take over time-consuming processes like demand forecasting, scheduling and inventory management,” he said. “This automation not only enhances accuracy but also reduces the likelihood of human error, which happens quite often in areas like inventory control, where precision is critical for maintaining optimal stock levels and avoiding costly shortages or overages.”

These capabilities, Allen said, allow directors of operations to focus on more strategic, value-added responsibilities like enhancing processes, strengthening relationships and making sure operations continue to align with the organization’s long-term goals.

“In other words, AI acts as a force multiplier, enabling directors to spend more time on leadership and decision-making,” he said.

Where Do Directors of Operations Work?

Directors of operations can be found in virtually any kind of agency, company or organization across the broad spectrum of business and industry, Allen said, from manufacturing and logistics to retail, healthcare and many others.

According to the U.S. Bureau of Labor Statistics (BLS), the industries with the highest levels of employment for directors of operation and operations managers include:

• Management, scientific and technical consulting services
• Management of companies and enterprises
• Computer systems design and related services
• Merchant wholesalers, durable goods

“They usually work at a corporate or regional headquarters, coordinating with different department heads to ensure alignment and smooth workflows,” he said. “In some cases, they do indeed work at a manufacturing facility.”

What Does an Operations Director Earn?

Income levels and salaries for directors of operations can vary based on a number of factors, Allen said, including what area of the country you’re in, degree level and years of experience in the field, among others.

“Salaries can be quite competitive, reflecting the responsibilities and skills required,” he said.* “Compensation often depends on the size and sector of the company, as well as geographical location, with directors in large corporations or high-cost areas typically earning more.”

The BLS reports that the mean annual wage nationwide for general and operations managers is $129,330, with the highest level of annual wages for those in the profession reaching $232,110.*

Future job growth projections show a bright outlook for the field, as well.* The BLS projects a 5.8% growth rate for general and operations managers between 2023 and 2033.*

“Yes, demand is generally strong, particularly in sectors where efficiency and process optimization are essential, such as manufacturing, supply chain, and logistics,” Allen said.* “As companies seek to streamline their operations and improve their bottom line, the role is becoming increasingly important.”

*Cited job growth projections may not reflect local and/or short-term economic or job conditions and do not guarantee actual job growth. Actual salaries and/or earning potential may be the result of a combination of factors including, but not limited to: years of experience, industry of employment, geographic location, and worker skill.

Cary Jordan is an Iowa-based writer with more than 20 years of writing and editing experience on a wide range of issues related to higher education. Cary has held administrative and cabinet-level positions at multiple colleges and universities, and his writing has spanned topics related to undergraduate education as well as graduate education in the areas of business, law, medicine and engineering, among others. Connect with him on LinkedIn.