Feeling like you’re stuck in a web?
Small business owners can become victims of their own systems and processes without even knowing it. Over time processes become tangled, sticky and cumbersome.
Some of these are easily spotted and quantified with simple input and output ratios. An example would be the ratio of units produced vs hours worked. But inefficient operations have a ripple effect which moves through a business and disguises itself in unsuspecting ways.
Operations problems are largely related to organizational problems. And the harder you work at ‘controlling’ your outcomes – the more sticky it gets for everyone involved.
These are just some of the telltale signs you need to focus on business operations and process improvement. A common hurdle in an organization with any of these symptoms is having more than it’s fair share of the dreaded ‘Defenders of the Status Quo’.
Where did these little devils come from? Well… operations problems are generally symptoms of organizational problems. Mediocrity is running amuck. It’s the standard. They tend to surface as financial problems before anyone takes real notice.
In it’s simplest form, the goal of Operations Management all boils down to doing more with less.
Here are a couple basic formulas to quantify this:
Output divided by Input = Efficiency or Productivity
Here’s an example of a metric commonly used:
It took 10 man hours (input) to produce 35 finished units (output). You could quantify this metric as 35 / 10 = 3.5.
Another way we quantify process efficiency in Lean Six Sigma is:
The Y represents process output and the x represents process input.
Using mathematical terminology, we say that Y is a ‘function of’ x. So, the value of Y depends upon the value of x.
Simply stated, output depends on inputs.
There are various specialized subsets of operations management which focus on everything from manufacturing to the back office, as well as different approaches, tools and methodologies.
One main key is identifying the most critical pieces of your organization which need improvement and the most useful metrics for your situation. Once baseline metrics are created, you can work on improvements and monitor your progress.
EXPEDITED DELIVERY OF PRODUCTS AND SERVICES TO CUSTOMERS
All improvement efforts should focus on delivering value to customers. The more efficient your organization is internally, the faster you can add value.
THE BOTTOM LINE!
Improving operations is usually the fastest way any company can increase the bottom line. It’s critical for growing businesses to review and adjust business processes regularly or inevitably end up with a tangled web of inefficiencies yielding disgruntled suppliers, customers and co-workers.
SUPPORTING YOUR TEAM
Well-documented and streamlined processes increase employee morale and improve teamwork.
The process needs your team’s involvement with feedback from the ground up. This helps create some ownership in the improvement process. Without the team and management in alignment, no sustainable positive change can ever be made. Solid leadership is necessary. Operations improvement is rarely successful unless done after (or in tandem with) organizational improvement efforts!
Conduct a holistic review of current operations and identify areas for improvement. Involve your team and gather feedback on current systems and bottlenecks in processes. Encourage suggestions for improvement. The people doing the work usually know this best.
FILE & DATA ORGANIZATION
Centralization and standardization of data and documents is critical. Basic spreadsheets and proper file management goes a long way as you move along in the improvement process.
KPI’s & BENCHMARKING
Identify the most important data to track in your business and industry. Establish baselines to measure your progress. Remember, the beauty of operations is it’s almost always quantifiable outcomes you’re looking for. Without quantifying where you stand now, there is no way to know if you are improving. Setting goals helps rally the troops! Encourage team participation here as well!
Identify and eliminate what’s not needed. Forget the “that’s the way we always do it” mentality and replace it with a consistent commitment to “how can this be better“? This is a CULTURAL CHANGE, not a one-and-done step. Your KPI’s let you know your progress. Making these transparent throughout your organization helps create some accountability.
No matter if you run a restaurant , a manufacturing facility or a call center – highly repetitive tasks can become significantly more efficient by simply moving things around. How can you change your layout to increase efficiency? For a distributor, this could be something as simple as stocking your best-selling items closer to the shipping dock.
Where are the duplications in processes and gaps in technology? Find software solutions and automate whenever possible. Conduct thorough cost-benefit exercises to ensure the technology you implement will pay off and identify where that tipping point is.
Knowledge Management is a commonly overlooked PILLAR of solid operations. Empower your team to work more efficiently and effectively with a Wiki and Digital Workplace. Clearly document roles, responsibilities and processes in a centralized platform which everyone on your team can contribute to maintaining as a single source of truth.
Improving business operations is usually the fastest way to increase your bottom line, and that means having more money to advance your company mission – profit or non-profit. But even if you don’t have that go-getter attitude and are perfectly happy with your for-profit business – improving business operations means taking more money home with you, or more handsomely rewarding your team. Here are some of the other benefits you can expect from well-executed operations management:
The combination of these benefits will Accelerate Your Business and maximize your bottom line in exponential ways!