If you’re a business leader, you’d always search for ways to increase staff productivity (including your own). Most resort to time management training by “business coaches” or “productivity masters.” Often these training and courses involve methods such as Inbox Zero, the Pomodoro technique, the Eisenhower matrix, Making It Happen, etc. As you know the truth, it has little or no impact on most people. These training sessions don’t work because people are overburdened with work, buried in email, and unable to concentrate on key objectives. Thus, most of these productivity hacks don’t apply to most people. At LSS, we have years of experience helping organizations with their operations management strategies. We’ve come up with this blog that will help you get started on the right foot. Let’s get started!
First Things First: What is Operations Management Strategy?
Operations management is the process of managing the activities and resources of an organization to ensure the production of goods and services and the delivery of services to the organization’s customers. Operations management is a strategic function that requires the interrelationship and coordination of various activities and resources to achieve organizational goals.
It requires thinking like a customer, understanding how the organization works and functions, and identifying opportunities to improve operations and increase profitability. If you’re a business owner, you constantly need to understand how the organization functions and identify opportunities to improve the organization’s processes and increase productivity.
Why Operations Management is Critical for Business Success
Whether you’re a manufacturing company, a digital service provider, or even a non-profit, operations management is a vital part of the business that you can ignore at your peril. It’s no surprise that it’s regarded as the organization’s ‘engine room.’
Unlike departments such as marketing or sales, operations management directly impacts the productivity and efficiency of the organization. Your marketing might be the best in the industry, but you’re bound to lose your business if the operations don’t back it up.
Operations management is an essential part of the management of any business, whether they are big or small. Operations management is evolving as companies become more complex and global. This evolution requires companies to become more strategic, thoughtful, and disciplined about operations management, so operations management education has become more prevalent over the last decade.
Operations management has a direct impact on the following parameters that define the success of any organization:
- Product/Service Quality
- Productivity
- Cost of Operations
- Customer Satisfaction
- Employee Satisfaction
Systems First: Key to Success in Operations Management Strategy
Prioritizing people over systems is one of the biggest mistakes that entrepreneurs make to achieve high productivity. That’s why they resort to training and micro-management of people, which sometimes does more damage than good.
The solution lies in providing a robust system to people who have clarity about the processes and roles.
When you put systems first, you’re uplifting all the people within the organization instead of a few. This will create a degree of equanimity among your people, ultimately reflected in numbers.
Top 9 Operations Management Strategy
Now that we’ve covered the basics of operations management let’s jump straight to the part you’re waiting for: operations management strategies.
1. Streamline and Simplify
Simplicity is rare, especially in business. We’ve seen many businesses turning small tasks into gigantic headaches. A lot of time is lost in planning, meetings, and coordination. We have new methods, tools, and products to streamline business operations and boost productivity.
Thus, as a business owner or manager, your first task should be to identify all such points in your day-to-day operations where the time is wasted. You can do that by assessing the validity of your methods, understanding competitors’ processes, and gathering the latest knowledge in the industry.
We’re not asking you to make an overhaul of your business as some processes are unique to your organization and must remain so. However, the processes that don’t impact your uniqueness and improve productivity must be implemented.
2. Measure & Leveraging Data
Without data, the decisions will be made by the intuition of the most experienced head in the room. However, no matter how “expert” they are, one could be wrong. That’s where data comes in.
Great operations managers find out ways to measure and leverage data for decision-making. It helps you identify the dark spots within your system and improves quality and accuracy. Most operations managers use efficiency and effectiveness as data metrics.
3. Daily Huddles – From Top to Bottom
Many high-performing organizations have instituted a system of tiered daily huddles with a well-defined escalation process for all issues. The first huddle, comprised of front-line employees, meets at the start of each workday. The next huddle, including supervisors, will be 30 minutes later. Managers then meet for 30 minutes, followed by directors, vice presidents, and the executive team.
With such an arrangement in place, the issues are addressed at their most fundamental level. If no decision can be reached, the situation is escalated. This method improves the connection between the C-suite and the front lines, speeds up decision-making, and, perhaps most importantly, increases productivity by reducing the number of random emails about various issues.
4. Resolve Small Issues
In most organizations, C-Level executives are so lost in spreadsheets and presentations that they lose touch with what’s going on down the line. And it becomes too late when they get to know about it.
Thus, there must be systems in place where ground-level workers and lower management can communicate about the problems they’re facing. These problems could be technical or related to people.
In addition, middle management must be trained to identify and escalate such issues before they turn into big headaches for your business. You must assign these problems to responsible people and set deadlines.
5. Improve Inventory Management
According to a study, one-third of businesses miss a shipment deadline as they sold an item that wasn’t in stock.
It’s no doubt that inventory management is an important function in operations management. It ensures that the right amount of inventory is available at the right time for the right purposes. Analyzing your inventory helps you keep track of it to prevent stock-outs and reduce the risk of spoilage.
Today, we have many IoT devices and inventory management software that reduce reliance on human efforts and streamline inventory management.
6. Use Technology
Many times, technology can do what system architectures can’t. New technologies can be integrated into various aspects of the business – be it accounting, manufacturing, customer service, etc.
To determine the most appropriate technology for your needs, compare your current systems to your goals. Consider any inefficiencies in your processes and how you can improve them. For example, capturing relevant information, such as customer details, in the simplest and most time-efficient manner possible.
7. Empower People
If you’re going to make people accountable for results, you must empower them to make their choices. They must not be compelled to engage in never-ending meetings, long email loops, training, presentations, etc.
A great example of such a system is the ‘Lattice’ management system. As a business leader, the key is to create a leadership environment from top to bottom. The workers must be empowered enough to make “above the waterline” (low-risk) choices on their own and without needing permission only for “below the waterline” (high-risk) decisions.
8. Improve collaboration
Having worked with many organizations in various industries, I’ve observed that a lot of time gets wasted in intra-department coordination. A lack of clear SOP and management structure creates a clash of egos and causes chaos. Often the top or even middle management has no clue about it.
Thus, you must define clear roles, SOP, and escalation policies to improve collaboration. Plus, there must be meetings and reviews to improve communication among departments.
Furthermore, you could use ERP software to improve inter-departmental collaboration by providing unified knowledge to all agencies, making coordination easier and clearer.
9. Track Work
According to a 2020 Connecteam study, time theft affects more than 75% of businesses in the United States. It can also consume up to 7% of your gross annual payroll.
Unless you have a business model as simple as a restaurant, you must be finding it difficult to determine what employees are working on if they’re overburdened or don’t have enough work. This is because most labour is performed in people’s computers or brains.
We recommend using physical or virtual task boards (such as Trello, Asana, Airtable, or Zenkit) in which each task is represented by a card indicating who is responsible for it (and its progress), allowing for more equitable labor allocation. It also eliminates the need for numerous status check emails and the need to discuss the subject in meetings.
LeanSummits: A Proven Leader in Operations Management Strategy
While operational excellence is critical for establishing and maintaining a competitive advantage, it is also more difficult to achieve than in the past. Our operations consulting teams help customers extract value from all aspects of their operations.
At LeanSummits, we’ve spent years creating and refining the culture, systems, and procedures that support its organizational structure, making it impossible for any business to replicate its model. It demonstrates the kind of thinking that will help individuals — and organizations — increase their productivity.
When it comes to operations management, we work with clients at every level of their organization to bring about transformational change and impact in key areas such as procurement, service operations, and supply chain. We also work with clients in manufacturing, investment project management, and operational efficiency.
Contact us for a free consultation to boost operations management within your organization.
English
Portuguese
Spanish