What is Operations
Ah.. Operations. The stuff folks ignore.
When you look at your business you want to see it thrive. You want to produce your product at the lowest overhead cost while ensuring that customers stay loyal and satisfied as they consistently receive high-quality products. Even if your company is doing well, a business should always be striving for better. You may want to expand the company’s products, open up a new storefront, or improve customer service.
Internal work and much research needs to be done before you can successfully launch any improvements or major changes to your business, though. There are many moving parts in a business to keep track of, even in close family businesses. It can be tough trying to keep track of all the necessary parts. The question then, is how do you make all the improvements? And what is operations, and what do operations have to do with improving the effectiveness of your business?
Read on to find out the answer to this question, and learn about how operations can help you make better use of your company’s resources.
So, What Is Operations?
Operations are all the processes of managing the internal workings of your business that ensure it can function properly each day. Operations processes are the engine of your business. The better your operations flow, the better work you produce, and the more revenue you may generate. There’s work that goes into every industry to ensure the proper steps are taken so that you can successfully create products, vend products, or provide services.
Improving operations can take different processes depending upon your industry. And the exact definition of operations for your company will change depending upon the industry as well. In the early stages of a business, this may mean working through the work processes to ensure that your product or service can be successfully made and delivered to customers effectively. In some cases, it may mean going into the business and refining existing processes to make them work more effectively together.
What Is Operations Management?
Operations management is focused on making sure that you’re using the business’s resources as effectively as possible. Operations management takes into account every asset necessary for production, from employees to technology, equipment to supplies. Then an operations manager would help make sure that your company is using these resources to their capacity. They do that while also scheduling necessary activities so that all the work that goes into production (like the delivery of resources and equipment maintenance) doesn’t interrupt the processes of production.
A lot of businesses have operations managers. This is a manager whose sole responsibility is ensuring that your operations are effectively performed. Small businesses may not have the resources to hire a single manager to focus on operations. They should instead employ a mindset of excellence in their workforce. In this case, each employee should be aware of the daily activities which help or interrupt production, and keep these background processes in mind as they act out their other duties.
As noted before, the exact definition of operations will change depending on what kind of industry your business is in. To better understand operations, looking at examples can help you discover what day-to-day operations are for your business. Understanding how other similar industries function can help you understand how mastering your own operations can lead to a more successful business.
What Is Operations for Producers?
The term “operations” originally comes from companies that produce physical commodities. This term came into being during the early stages of the industrial revolution when Eli Whitney and other leading entrepreneurs were looking to use parts-based assembly for industrial machinery. Whitney wanted to produce the cotton gin more efficiently, consistently, and cost-effectively. He did so by cutting back and improving his business operations.
Producers should consider how they can help employees better manage their time. This includes figuring out how they can help cut down on production time in general. The assembly line has already been invented, and there’s no need to employ it if that’s not a production strategy that suits your product. However, you should ensure that you’re making the most use out of the raw materials you use for production. Check where you store materials and finished products. Make sure that none of your materials get lost or damaged in transit or in storage.
There are many other aspects of operations you should consider as a producer of goods. This includes checking procedures to ensure there’s no bottlenecking during production. Think of ways you can more effectively process orders so that you can work on several at once. Is it possible for you to negotiate with suppliers? Can you buy raw materials in bulk to save money on pre-production?
These all fall under the header of operations. These elements are what should be considered during the process of operations management.
What Is Operations for a Service Company?
If you provide a service, you have different operations than a producer will have. You’re not dealing directly with products, but you are selling them. The goal for any service company is to keep customer service quality high and ensure you have all the business resources you need to provide the service.
Customers are your number one priority, so your operations have to do with guaranteeing customer satisfaction.
Consider some of the following aspects of your organization when you’re seeking to improve operations at a service company. Are you sure that your internal communication and team collaboration are positively affecting your services? Bad communication may be consistently making projects come in over budget. It may even cause certain deliveries to be late. These can both have disastrous consequences to your business’s reputation. Looking over your operations can help prevent these issues.
What Is Operations for Retail?
If you own and operate a retail business, you’re trying to convince customers to buy a product at your store. You want to offer an experience that makes it worthwhile coming to your business to buy products. You want to sell the products at a price that makes you a profit but isn’t so high that it drives away your target customer base.
In this case, the most important part of the business operations you should focus on is inventory management. Consider a few questions about your inventory. Analyze your sales data and figure out what is selling and what isn’t. Try and negotiate with your supplier for lower prices. Think of which items you may be able to raise or lower the price of for better sales.
By employing software that can help you keep track of your inventory and purchases, you can more directly respond to customer demand. This can help you address demand without wasting as much money on products that just sit on the shelf. Operations management can help cut costs in these ways and help your business stay ahead of the competition.
What Is Operations for Restaurants?
Many restaurants are not functioning as efficiently as they could be. Restaurants function a bit like a retailer and a bit like service providers, but they come with more struggles as the products that restaurants offer are perishable.
There are a lot of operations to consider when managing a restaurant. There is labor, the purchasing of food, and the buying of drinks. But that’s still only a small part of the picture. You also need to make sure that all food preparation is also being done effectively and that your refrigerators are well-organized and kept up-to-date. You must also ensure that your business is in compliance with health and safety standards. Staff should also be trained to be friendly and welcoming, and all chefs should be able to cook the cuisine.
A restaurant likely needs more than two managers. It should at least have an operations manager who can handle working with the food-related needs of the business and another who can handle the needs related to customer service.
What Is Operations for Digital Only Companies?
When it comes to digital companies, operations are a little different than in a physical business. Instead of focusing on the product or service as in other industries, digital companies rely heavily on the skills of their employees. Employees need to bring a lot of value to your company. So, when considering operations management, you want to make the most out of each person you hire.
This means your business may have to focus more on employee satisfaction than others might. This includes hiring practices, employee training, and investing in programs that increase employee retention.
Communication is also key to digital companies functioning. If you run a website or create software, several teams may be working on a project at once. Ensuring that there is clear, efficient communication between teams prevents mistakes and saves time.
An operations manager should also consider outsourcing certain tasks. Always consider if it’s more effective to have your team take on a task they may not be completely qualified for, or to have some work be done by some other outside expert.
Operations – An Essential Part of Business
You now understand the question, what is operations? You know the value of operations, and how you can start getting a handle on your business to increase efficiency. This will help you ensure that you’re prepared for your business to grow in the future. By using operations management to improve your business you can save money, time, and increase your profit margin.