What is operations management?

Do you want to make your enterprise more efficient? Learn more about what operations management is and what it can offer your business in this article. 

We’ll cover the main tenets of operations management so you can begin conducting your own review of your business, no matter your industry. Find out:

• What is operations management?
• How it affects businesses who sell products
• How it affects businesses who sell services
• Other common areas of business operations to consider

Operations management concerns your business’s processes and administrative side: asking how you do things, why, and can they be better? The ultimate aim of any operations management review is to improve processes within your business to either save time from unproductive task elements or inefficient processes. 

Operations management applies to both you and your staff (if you hire any), and so good business owners should also include their own imperfections alongside those they employ. Not only will this improve your business’ productivity, but it can also help maintain healthy staff relationships. Otherwise, unreasonable expectations on staff can damage your business’ reputation and performance.

Methods for reviewing your operations management can vary, but typically involve measuring the time taken to complete certain tasks and mapping how jobs or processes are broken down into smaller units. From here, business owners then try to work out ways to skip stages, combine efforts, remove bottlenecks or smoothen workflows so the overall measure of time decreases or maintains at an optimal level.

Operations management affects product and service businesses differently as the time investment in each business model is very different. However, there are also shared areas where advice and methods can be shared for ideal business performance – find out more below.

Operational management is an open term applied across the whole of your business. When focusing on your products, you may be more familiar with the term ‘supply chain management’. 

In this circumstance, we’re concerned with how your products are sourced, manufactured, delivered (to you or to your customers), and returned if customers so choose. Given the vast scope across such different processes, it’s vital to have a clear and detailed understanding of your operations.

Otherwise, a lack of operational management can cause severe inventory issues for your business, causing either a shortfall in your supply and delay in your delivery, or an overabundance of product tying up your working capital and leaving you more vulnerable to market trends.

You can avoid this insecurity in your business by making sure your manufacturing and delivery processes are robust and efficient. Learn more in our article How to improve supply chain management.

In contrast, service businesses have much more varied operational needs. While your business will still involve sourcing goods for projects, service businesses are more closely tied to the needs and wants of their customers, leaving open the potential for unexpected delays.

Unfortunately, these lagging effects can cause wide-ranging problems for the delivery of the client project in question or others you have running at the same time. And so, just like product businesses, having a consistent operational capacity for client needs or a flexible approach to project delivery is vital. Otherwise, you can run into the similar issues of bottlenecks, tempting you to decrease the quality of your work or a postponed sign off date. 

Learn more about ensuring the consistency of your service business and managing client expectations in our articles Customer feedback techniques for business start-ups and What is a statement of work, and how do I create one?

Aside from the workflows associated with your products or services, almost every business has commonly shared tasks that can be made more efficient also. We’ve included some of the main business areas you can consider as you try to make your organisation more efficient.

Good marketing materials not only take time to create, but also take time to share with customers. Make sure your adverts cut through the noise to reach more of the customers that matter most to your business and start building a target market profile.

New business owners should aim to regularly review their successes and disappointments and learn how to integrate those lessons into their business plan. Most importantly, reflecting on how helpful their business plan has been in guiding their actions since it was first written. 

Learn more about forecasting your business growth and building successful growth strategies in our articles The importance of short, medium and long term goals and How to budget money for your growing business.

Few business owners will pass up the chance to automate their financial admin. If you’re looking for ways to save time from routine business processes too and gain a competitive edge, Countingup has the potential to save you potentially hundreds of hours each financial year. 

Countingup is the business current account and accounting software in one app, offering your business a comprehensive solution to your accounting operations. With all of your business’ financial information in one place, Countingup automates time-consuming admin tasks. 

Countingup comes with automatic expense categorisation, receipt capture tools and real-time cash flow insights so you can keep on top of your business finances, log expense entries on the go and understand your trading performance with a single glance.
Find out more here and sign up for free today.