Any well-run organization has an effective operations management. Often small businesses disregard it as they feel it does not apply to them. What they may not realize is that the concepts, principles and benefits behind operations are applicable to all business – no matter what size.
What is Operation Management?
Operations can be defined as managing the inner workings of any business o it runs as efficiently as possible. It is the business function responsible for managing the process of creation of goods and services. It includes planning, organizing, coordinating and controlling the resources needed to produce goods and services. Due to operations being a management function, it involves managing people, equipment, technology and information. It is the core function of every company. Operations management sets the tone for the day-to-day tasks necessary for a successful company.
In a small business, every owner should oversee the design and management of the product or the service that they offer. Small business may not want to dedicate a single person to an operations role. Rather employees and owners should understand the business and how various processes impact on the day-to-day running the company, for example:
If you’re in the retail business, your goal would be to stock the items your customers want. For operation success, the daily goal is to perfect and protect the inventory.
If you’re a restaurant, inventory problems are a lot more challenging, since products are perishable. Operations in a restaurant are not just food stuffs, but also purchasing, preparation and costs of food, beverage, and labor. It also concerns customer service and customer experience.
A service company, can divide their operations into two key brackets – client-facing and business related.
Product based companies are the reason why operations exist. An operations assembly line in small business makes products as well as how its purchased, the store, the making and shipping of the merchandise.
A digital company’s value lies in personal. For successful operations, finding optimal ways of hiring, training and mentoring staff are essential, as well as the tools needed.
An effective operation has the following advantages on your business:
It reduces the cost of products and services by being efficient
It increases revenue through customer satisfaction
It decreases the amount of investment (capital employment) necessary to produce the goods and services by being effective and innovative in the use of resources.
It provides the basis for innovation and building a social base of operations and knowledge.
Operations are key to running a business. By asking questions about existing processes and identifying how to improve them, a business is able to define and optimize what operations means to you and your small business.