Operations Management: Definition, Types, And Tips
If you’re new to the concept of operations management or would like to improve your knowledge on the subject, we’re here to help.
The processes you put into place serve as the foundation for the way your business runs on a daily basis and defines how you and your team work, communicate, and manage the tasks involved.
These processes are an integral part of everything you do, so choosing the right systems and workflows is vital for the success of your business.
In this article, we discuss the finer points of operations management and provide tips on how to make it work for you, your team, and your company as a whole.
What Is Operations Management?
At its most basic, operations management (or OM for short) is the administration of business practices with the goal of creating the highest level of efficiency possible within the various standards, procedures, and workflows of an organization in order to maximize profits.
The application of OM typically extends from one “end” of your business to the other — from the raw materials and supplies flowing in, through your team’s activities and labor, and on to your customers and clients.
Stages of your business that can benefit from operations management include:
Though every business can find ways to implement OM, no two businesses will have the exact same solutions because the nature of operations differs greatly from company to company and industry to industry.
That said, the next section deals with common theories you can use to figure out what works best for you, your team, and your business.
Modern Theories Of Operations Management
Business Process Redesign
Business Process Redesign (BPR) is a theory of operations management that focuses on analyzing and designing workflows and processes that respond to accelerated change.
As the name implies, BPR is best suited for businesses that need to redesign their entire business process in order to achieve a complete overhaul of their key operating components from start to finish.
One of the many benefits of BPR is that, once implemented, your business will be more efficient, more profitable, and better equipped to handle future shifts in operations management that you may find necessary.
Granted, by its very nature, BPR is more costly and time-consuming than some other OM theories and practices, but the results can be well worth the effort and expense.
Reconfigurable Manufacturing Systems
The Reconfigurable Manufacturing Systems (RMS) theory is similar to the Business Process Redesign theory but is best applied to a single system (typically a manufacturing run) rather than your business as a whole.
Like the Business Process Redesign theory, Reconfigurable Manufacturing Systems prepares your organization for accelerated changes in structure, hardware, and software components.
RMS allows systems to adjust and adapt more rapidly than before to necessary business or market modifications — all while maintaining the consistency and efficiency of production.
Engineers at Motorola introduced Six Sigma in 1986 as a way to improve quality by reducing the number of errors in a process.
Six Sigma does this by:
Identifying what is not working
Removing those unsuccessful bits from the process
While Six Sigma may be best suited for larger businesses that want to improve quality and efficiency, there is much to be gained for small and medium businesses as well.
The Lean project management methodology revolves around maximizing customer value and minimizing waste. This ideal often manifests as using fewer resources and is embodied by the value that, as waste is eliminated, quality improves and production time and cost are reduced.
Lean focuses on reducing waste in the following categories:
Lean is a beneficial project management methodology for businesses with the goal of streamlining a complicated project and transforming how they do business.
Types Of Operations Management
As we touched on earlier in this article, you can apply operations management to your entire business (from start to finish) or to components and processes within that larger structure.
In this section, we’ll discuss four of the most basic types of OM so you can see how they apply to your business.
The goal of operations management applied to the financial aspect of your business is the ultimate increase in profits.
Sometimes, though, you may find through an operations management analysis that your business can benefit from sacrificing short-term profits and financial goals in order to increase future profits and capacity.
For example, your business might decide to reinvest all annual profits into upgrading machinery in order to increase production capacity and efficiency over the course of the next year.
In other words, you may sacrifice profits now in order to achieve increased profits in the future. An OM analysis of the financial aspects of your business can help you identify these possibilities.
When most managers think of operations management, they visualize it as part of a restructuring of internal practices and procedures. For example, your business might focus on improving efficient communication between individuals, teams, and departments.
Or your business may choose to focus on improving other aspects of the workflow inside your business such as accounts payable, accounts receivable, manufacturing, order handling, scheduling, hiring, training, and others.
Your business can also apply operations management to external aspects such as:
Finding ways to improve efficiency and service within these external components of your business can pay dividends in profitability and long-term success.
Tips For Effective Operations Management
1) Stay Current
Innovation never sleeps, so it’s vital that your managers stay current on trends that can help your business improve.
This may involve everything from reading to research to listening to the suggestions of employees on the front line.
2) Keep It Simple
Effective operations management often relies on implementing new technologies into extant workflows. When that’s the case for your business, it’s best to keep the new technology as simple as possible for team members at every skill level.
This may not always be possible because some technologies, by their very nature, come with a steep learning curve. But, when it’s within your control to do so, choose new systems and tools that everyone in your organization can learn fairly quickly.
3) Invest In Education And Training
Sometimes, OM strategies necessitate the introduction of more advanced technologies and procedures.
In those cases, it’s best to invest in education and training along with the new equipment. That way, your team and your business can get the most benefit out of the changes.
Good communication is at the heart of every successful business — especially when you’re changing the way your business operates on a day-to-day basis.
Establish strong lines of communication with all your team early on in the process, and then be sure to maintain that communication during and after the operations management analysis gets going.
Organize Operations Management With Software
At first glance, keeping your operations management organized may seem like an impossible task. But, with the right software, you can achieve the insight you need to streamline every aspect of your operation and create a workflow that works for everyone.
When it comes to scheduling your team, managing their tasks, and tracking their activity, Inch is the perfect software for the job.
The Inch app is a powerful suite of tools that helps your team get aligned on their to-dos, ensures all tasks within the cycle get completed on time, and simplifies communication.
The heart of our software is its team task management module that includes intuitive features, like:
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