There are so many significant factors that contribute to running a successful business. When a company is not handled correctly, one of the first few signals comes from how its operations are run. Businesses like these often struggle with customer satisfaction and delivering quality outputs before closing down or going bankrupt.
In recent times, there have been a lot of economic, cultural, and social changes that followed the widespread technology we've witnessed in the last decade, such that even the way businesses handle their operations is changing.
Consumer behavior has evolved, and there is so much more focus on brands that can deliver value and are authentic in their services and product delivery. With the rise and power of social media, more consumers are empowered to call out brands and businesses, as it is now as easy as making a video or posting a tweet. The spiral effect could be either positive or negative.
Brands and companies are not oblivious to this. And many businesses are concerned with being on the positive end of these changes, mainly because of its enormous benefits like increased brand awareness, more sales, and loyal customers. Consequently, this has led to a demand for agile and more efficient operations management.
By doubling down on the most efficient way to consistently deliver quality services and products, more businesses stand a chance to compete in these times
In this article, we will look at operations management's definition, importance, and relevance for companies and businesses today. By the end of this article, you will better understand operations management and how companies can use it to scale.
What is operations management [OM]?
There's a process that gives birth to successful businesses or at least sets a company on the course to success, and a crucial part of this process is how their operations and procedures are managed. This is widely known as Operations Management, an essential function of any organization that produces and delivers goods or services.
It involves developing, planning, strategizing, structuring, and controlling all business procedures to maximize efficiency within an organization.
In simpler terms, it is the management of assets, capital, human resources, methods, and systems involved in creating and providing a product or service to customers to ensure company processes drive value.
An operations manager is responsible for ensuring that every activity that produces goods and services for a business helps the organization achieve its objective and maximize profitability while keeping costs low. They are also responsible for working closely with every team to increase productivity and quality of customer experience.
Good operational management is always visible. Processes are more efficient, resources are better managed, continuous improvement techniques are in place, and success is trackable.
The critical components of Operations Management Include:
- Planning: This is the stage where the goals and objectives of the company are brought to the table and discussed. The planning stage also involves designing and mapping out what the organizational structure and procedures will be like when in effect. Other things that go in this stage include what products and services will be offered, what kind of values the organization will run on, what is the quality of the team the company is looking to build, what strategy will be used to achieve set goals amongst other significant factors to be addressed.
- Organizing: This stage involves putting the plan into a structure. It involves mobilizing people, resources, and materials to execute the plan. In this phase, things are broken down into subsets and given more context in descriptions to enable perfect execution.
- Control: This stage involves making sure that the plan is going smoothly. The operations manager is tasked with looking for loopholes, identifying possible roadblocks, and immediately coming up with practical solutions and actions to enable optimal performance
- Continuous improvement: This stage involves improving as each business's actions are repeated. To increase efficiency, business operations can be enhanced by adopting new technologies, workshops, and employee seminars.
- Delivery: This is the last chain of operations management and when the product or service gets to the customer efficiently and securely. Processes include managing the supply chain, scheduling production, and ensuring product quality.
Now that we've discussed the basics of operations management, here are a few reasons operations management is essential for every business summarized below:
Importance of operations management
Operations management helps businesses streamline and make their processes more efficient by identifying areas where blockages and inefficiencies occur. The easier it is to complete a task or business activity, the better the overall performance of that activity.
Operations management is critical for ensuring businesses can maximize everything at their disposal and eliminate waste. This helps companies to identify and focus their energy investing in things that can bring results.
A significant part of operations management is ensuring that the quality of goods and services [from procuring raw materials to delivering finished products] matches the required global standard. This is achieved by implementing strict quality control measures, tracking quality metrics, and addressing issues.
Operations Management encourages a culture where everyone is open to improvement and brings their best. By continuously improving production and delivery processes, operations managers can identify new ways to improve products or services, increasing team competitiveness and growth. Team members are challenged to identify areas for improvement and implement those changes. When everyone is improving, innovation thrives, and the chances that the business stays profitable increase.
Operations management is vital in guaranteeing the efficient utilization of resources such as time, capital, and materials. By managing the production and delivery processes effectively, operations managers can reduce wastage and increase productivity, resulting in cost savings and increased profitability.
Operations management also helps play a key role in providing customers with the utmost satisfaction. There is no business without the customer, so operations managers lead the production, packaging, and delivery process to ensure that customers consistently receive products or services on time and in the proper condition. This, in turn, leads to increased customer satisfaction and loyalty.
Operations management is essential for ensuring that an organization is flexible and can respond quickly to customer demand changes, market trends, and other external factors. By designing production and delivery processes that adapt to changes, operations managers can ensure that the organization remains relevant and responsive.
Effective operations management can lead to revenue growth in several ways. By ensuring efficient production processes, operations managers can increase output, leading to increased sales. Additionally, by improving product quality and customer satisfaction, operations managers can attract new customers and retain existing ones, increasing revenue.
Examples of successful operations management
Operations Management is relevant for every industry, and here are successful real-life examples of operations management across several industries.
- Fast food industry: In the fast food industry, speed, quality, and reliability are prioritized. Customers want to get their food on time, in good taste and quality, and be assured that they can trust the process behind-the-scenes involved in making their meals. This means there must be a standardized process for stocking ingredients, planning inventories, preparing the food and serving it to customers, and receiving customer feedback. McDonald's is a good example. McDonald's is a fast-food restaurant chain with widely known efficient operations management, enabling them to build a successful food chain business and consistently run it across countries.
- Manufacturing industry: The manufacturing industry is very complex. The processes require skill, raw materials, huge capital, and human resources. They also need to maintain a high level of quality control for the products they create. At the same time to stay profitable, they have to optimize resources to reduce costs and maximize output. An example of a company that has succeeded at this is Toyota. Toyota is well-known for its successful operations management in the automobile industry. They pioneered the lean manufacturing system, [a continuous improvement method] which focuses on minimizing waste and maximizing production efficiency. By putting this system in place, Toyota can produce high-quality vehicles at a lower cost than its competitors.
- Retail and eCommerce industry: People turned to the retail and e-commerce industry for ease which means they trust companies in this niche to take their money and deliver high-quality products they are interested in. Without a proper operations management system, any business in this sector is already set up to fail as there is so much quality control needed before the goods reach the consumer who expects something in perfect state. There's also a large number of people placing orders daily. So from the supply chain to inventory management to order fulfillment and customer service, operations management ensures smooth sailing for the customer. Amazon, a global e-commerce giant, succeeded in the retail industry through its advanced operations management. Creating a highly automated supply chain system that enables them to process and ship orders quickly and efficiently with technology helped them optimize their operations and deliver exceptional customer service.
- Logistics industry: There's so much efficiency needed in the logistics industry. When people or businesses trust you to handle their packages, one thing they are not looking forward to hearing is that something terrible happened to them. In this delicate sector, operations management helps in goods management, resource optimization, planning and scheduling, inventory management, and quality control. A good example is FedEx. FedEx is a logistics company that specializes in express delivery services. Their operations management system has helped them deliver packages quickly and reliably, even in challenging circumstances, to customers, building a solid brand reputation as the go-to logistics company.
Relationship between operations management & other business functions
Operations management cannot happen in isolation; its success depends on how well it can work with all the teams and components that make up the business, from marketing to finance to human resources and sales.
Here is an overview of the relationship between operations management and other business functions and why they need each other to succeed.
- Marketing: While marketing works on generating demand for the business and building positive brand awareness, operations management will ensure that the order is effectively met and that customers have satisfactory experiences when they use the product or service. This will further make it easy for marketing to generate organic customer reviews, word of mouth traffic/testimonials and attract more customers, leading to increased revenue. Marketers also need an understanding of the company's operational capacity to develop a strategy that works.
- Finance: Operations management is responsible for handling the production and delivery of goods and services, while finance is responsible for managing the company's financial resources. Without syncing with the finance team, operations will struggle to plan and budget appropriately for company expenses, build new products or run services. Hence, Operations managers need to work with finance concerning cost management, capital investment, risk management, and the company's financial performance
- Human Resources: Operations managers need human resources to ensure the company can meet its objectives. The Human Resource team is responsible for hiring and finding the right people for each role, and in partnership with operations managers, employees are trained and motivated to perform their jobs effectively.
These are just a few of the many ways operations management collaborates with other arms of the organization. When this collaboration is done optimally, it increases the chances of a company achieving its objectives and succeeding quickly, even in a highly competitive marketplace, because everyone will work in unison towards company goals.
Introducing Scribe & Scribe Pages
As we've seen, there's a need for operations management, but it can also be a complex process to keep going concurrently. This is where Documentation comes in.
Documentation is crucial in operations management, as it helps ensure that operations run smoothly, efficiently, and consistently over time. And now, with tools like Scribe, it is no longer a complicated, cumbersome process. You need zero technical skills to capture any process and turn it into a tutorial, how-to guide, or SOPs.
Scribe is an easy-to-use process documentation tool that auto-generates any process into a step-by-step guide, tutorials, and SOPs. You can also add images, text, YouTube, Loom videos and multiple scribes with Scribe Pages and, like Seth and many other verified Scribe users, enjoy ease with capturing any process.
Benefits of using Scribe to support your operations management
Beyond just documentation, how does Scribe help you as an operations manager during operation management?
Here are five ways:
1. Standardize process: Using Scribe allows you to standardize business processes and procedures, helping everyone on the team to understand their roles and responsibilities better, which reduces the risk of errors while carrying out tasks, avoiding delays and misunderstandings.
2. Increased efficiency and productivity: Instead of using Google Docs or creating Multiple Google meet to explain a process repeatedly; You can create tutorials on any topic by clicking the “record” button. It doesn't end there; you can add multiple scribes, text, youtube, and loom videos with Scribe pages and cover all there is to know about a particular process in one centralized place. This changes the game for training sessions and onboarding, providing new and old employees a clear pathway to understand an operation's methods, tools, and procedures while allowing them to quickly get up to speed and contribute to the operation's success.
For example, here's a Scribe that shows you how to add zoom to your calendly link
As an operations Manager, this saves you a lot of time and energy that would have been spent explaining how different tools work, and you can duplicate templates and replicate them for other teams.
Check out some of our templates in the Scribe Gallery and create an operations manual or how-to guide in minutes.
3. A centralized location for all your resources: You can store and organize Scribes related to each other in one place using Scribe Pages. This makes it easy to manage and access every information related to an operation at any time.
4. Easily customizable: Using the Scribe tool is as easy as installing the extension, allowing you to customize anything you work on. You can make text, image, subtitle and link changes and edit every Scribe you create, giving you complete creative control and capabilities. This also means you can go back to previous documentation where necessary and ensure that the documentation is accurate and up-to-date, which reduces errors or inconsistencies.
5. Highly collaborative tool: Scribe also enables collaboration between stakeholders involved in an operation, such as employees and managers, while carrying out a task. All Scribes are shareable via link and can be embedded, which makes access very easy.
Finally, Businesses need structure, and these structures need supervision once implemented to enable continuity. You cannot achieve this as an operations manager without adequate documentation, or else you will have a situation where you have to micromanage people, and this is counterproductive.
So, what do you do? Use technology to your advantage!
Start today and incorporate tools like Scribe to create a culture of documentation before, during, and after the delivery of each operational process. You will reap the full benefits of implementing operations management by doing this repeatedly.