"Day to Day" Operations Management
By detailing what is required from your operations to achieve your overall business objectives, you will keep your business focused on the day to day events that are necessary to keep your business going.
That includes your equipment and facilities management and cost; maintenance management and cost; labor force (number of people required for the production and sales goals); the budgets for each of the operations line items; and the planned operating profit margin for each product.
Your operating function is the core of your business and it's extremely important to manage it effectively, while integrating the other business functions into your planning.
Business Operations Management Tools and Techniques
Identify your labor force requirements (by department) - actual and projected based on sales projections. Also include training and development required to meet your operation's need. Include wages and benefits paid (and future employee compensation costs, e.g. wage increases, benefits increases, insurance increases), employee policies and practices for full time, part time and contract personnel.
Your Business Operations and Workflow
Make sure during your planning process that you consider operation or production constraints. Where is the bottleneck in your operation? Understand what slows your process down; then manage those constraints.
Business analysis is a research discipline of identifying your business needs and determining solutions to your business problems. Solutions consist of your process improvement, organizational change or strategic planning and policy development.
Eight steps for business analysis:
Contingency planning is developing responses in advance for various situations that might impact your business. Although negative events probably come to mind first, a good contingency plan should also address positive events that might disrupt operations - such as a very large order.
The Importance of Contingency Planning
Your business has the possibility of a situation that adversely impacts operations. If the response to the situation is poor, it might have a dramatic impact on the future of the business, such as loss of customers, loss of data, or even the loss of your business.
A good contingency plan should include any event that might disrupt operations.
Here are some specific areas to include in the plan:
Seven steps of a Risk Management Process
Cost of quality (COQ) is defined as a methodology that allows your organization to determine the extent to which its resources are used for activities that prevent poor quality, that appraise the quality of your organization’s products or services, and that result from internal and external failures.
Having such information allows your organization to determine the potential savings to be gained by implementing process improvements.
The COQ categories are:
Appraisal costs: Are costs incurred to determine the degree of conformance to your quality requirements. Appraisal costs are associated with measuring and monitoring activities related to quality. These costs are associated with the suppliers’ and customers’ evaluation of purchased materials, processes, products, and services to ensure that they conform to specifications.
Appraisal costs could include:
Internal failure costs: Internal failure costs are incurred to remedy defects discovered before your product or service is delivered to the customer. These costs occur when the results of work fail to reach design quality standards and are detected before they are transferred to your customer.
Internal failure costs could include:
External failure costs: External failure costs are incurred to remedy defects discovered by your customers. These costs occur when your products or services that fail to reach design quality standards are not detected until after transfer to your customer.
External failure costs could include:
Prevention costs: Prevention costs are incurred to prevent or avoid your quality problems. These costs are associated with the design, implementation, and maintenance of your quality management system. They are planned and incurred before actual operation.
Prevention costs could include:
Cost of Quality and organizational objectives:
The costs of doing a quality job, conducting your quality improvements, and achieving goals must be carefully managed so that the long-term effect of quality on the organization is a desirable one.
These costs must be a true measure of your quality effort, and they are best determined from an analysis of the costs of quality. Such an analysis provides a method of assessing the effectiveness of the management of quality and a means of determining problem areas, opportunities, savings, and action priorities.
Cost of quality is also an important communication tool. Demonstrating what a powerful tool it could be to raise awareness of the importance of quality. Referred to the measure as the "price of nonconformance" and argued that organizations choose to pay for poor quality.
Many organizations will have true quality-related costs as high as 15-20% of sales revenue, some going as high as 40% of total operations. A general rule of thumb is that costs of poor quality in a thriving company will be about 10-15% of operations.
Effective quality improvement programs can reduce this substantially, thus making a direct contribution to profits.
The quality cost system, once established, should become dynamic and have a positive impact on the achievement of the organization’s mission, goals, and objectives.
What's better than acquiring one new customer?
It's a Customer Retention Program!
While there's a certain allure that comes with capturing your new customers, keeping your customers coming back will continually result in a greater ROI and it costs 5 – 25 less money to retain an existing customer than obtain a new customer.
Client Retention Program Ideas
Excellent customer retention strategies that work:
It costs your company 5 – 25 less to retain an existing customer than obtain a new customer.
Information that describes the product to its users. It consists of the product technical manuals and online information (including online versions of the technical manuals and help facility descriptions).
Special Projects are duties performing with a high degree of independence, initiative and judgment.
Benefits of BMS managing your special projects for you:
Operational excellence is a philosophy of your workplace where problem-solving, teamwork, and leadership results in the ongoing improvement in your organization or company. The process involves focusing on your customer’s needs, expectations, keeping employees positive and empowered, and continually improving the current activities in the workplace.
Ten core principles for achieving Operational Excellence
Top three Operational Excellence Methodologies:
Through operational excellence, an organization can improve its company culture and performance, which leads to long-term sustainable growth. Your business should consider looking past the traditional one-time event and move toward a more long-term system for change. Over the years, numerous methodologies have been introduced to the mainstream business culture as a method of achieving operational excellence.
Project management is one of the most critical components of your successful business. It affects revenues and liabilities, and it ultimately interacts with your customer or client satisfaction and retention. Your company might have only one project in the works at a time, while other larger corporations and entities might juggle several projects at once. By their very nature, projects are temporary.
Project Management is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources.
Project Management is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. So, a project team often includes people who don’t usually work together – sometimes from different organizations and across multiple geographies.
Project Management processes fall into five groups:
Project Management knowledge draws on ten areas
Implement a Competency Based Training Programs critical to your business or organization. Training is the easy part, however being curtain that managers and employees are trained and are competent to perform their requires tasks is the “key” to success. Implemented effectively, competency-based education can improve quality and consistency, reduce costs, shorten the time required to complete, and provide you with true measures of employee learning. Implement a Competency Based Training Programs critical to any business or organization:
So how can you implement a competency-based training program?
Follow these four basic rules:
The Competency Based Training Program could include:
A business / quality source inspection in which your buyer or customer required the business / quality verification before your product or service received.
Source Inspections include but not limited to...
Supply chain management (SCM) is the management of the flow of goods and services which includes all processes that transform raw materials into final products. It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
SCM represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production to product development to the information systems needed to direct these undertakings.
How Supply Chain Management Works Typically, SCM attempts to centrally control or link the production, shipment, and distribution of a product. By managing the supply chain, companies are able to cut excess costs and deliver products to the consumer faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales, and the inventories of company suppliers.
Supply Chain Management coordinates the logistics of all aspects of the supply chain which consists of five parts:
Seven principles of Supply Chain Management
The basics of Supply Chain Management Processes
There are key supply chain processes that you must take into consideration to effectively understand and manage them. These processes are all at play regardless of the type of supply chain you’re using.
Risk management is the identification, evaluation, and prioritization of risks as the effect of uncertainty on objectives followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities.
Risks can come from various sources including:
In ideal risk management, a prioritization process is followed whereby the risks with the greatest loss (or impact) and the greatest probability of occurring are handled first, and risks with lower probability of occurrence and lower loss are handled in descending order. In practice the process of assessing overall risk can be difficult, and balancing resources used to mitigate between risks with a high probability of occurrence but lower loss versus a risk with high loss but lower probability of occurrence can often be mishandled.
Processes of Risk Management
Risk management planning
Select appropriate controls or countermeasures to mitigate each risk. Risk mitigation needs to be approved by the appropriate level of management. For instance, a risk concerning the image of the organization should have top management decision behind it whereas IT management would have the authority to decide on computer virus risks.
The risk management plan should propose applicable and effective security controls for managing the risks. For example, an observed high risk of computer viruses could be mitigated by acquiring and implementing antivirus software. A good risk management plan should contain a schedule for control implementation and responsible persons for those actions.
Implementation follows all of the planned methods for mitigating the effect of the risks. Purchase insurance policies for the risks that it has been decided to transferred to an insurer, avoid all risks that can be avoided without sacrificing the entity's goals, reduce others, and retain the rest.
·Review and evaluation of the plan
Initial risk management plans will never be perfect. Practice, experience, and actual loss results will necessitate changes in the plan and contribute information to allow possible different decisions to be made in dealing with the risks being faced.Risk analysis results and management plans should be updated periodically.
There are two primary reasons for this:
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