Every business is driven by its core values. These values include maximizing profits, ensuring conducive working environments for the employees, delivery of the best possible services, and more. When a business focuses on maximizing its profits, it will often look to streamline its production, distribution and sales processes to deliver the right quantity of goods to the right customers. All this can be done by optimizing its operations management practices.
Operations management touches on every aspect of an organization with a focus on creating the highest level of efficiency in a business. As a company or business gets closer to achieving this aim, they can expect to see higher profits and a streamlining of all its processes and operations. But how can a company or business leverage operations management practices to ensure higher profits? Read on as we delve deeper into the topic.
Understanding Operations Management
Operations management leverages staff, equipment, technology, and materials in the creation of goods and services efficiently and at the lowest cost possible. Operations management also sheds light on the way organizations can balance their costs with revenue to maximize profits.
Operations management can provide strategic guidelines on how a company can achieve its aims. It does this by:
- Determining the size and location of manufacturing plants
- Providing project management strategies and guidelines
- Offering guidelines on the deployment of information technology networks
- Offering guidelines on inventory management
- Advising the organization on raw material acquisition, materials handling, and quality control
- Ensuring minimal wastage of resources at every point of the organization’s processes.
Leveraging Operations Management for Higher Profits
The biggest concern for an operations manager is minimizing wastage. They minimize the wastage of resources both at the material and labor levels. Doing this ensures the company does not lose money where it should not. Operations management is also concerned with the delivery of goods and services to the right customers as efficiently as possible. Operations managers do this by offering advice on distribution networks and customer insights. When the production and distribution processes are streamlined in this way, the company can utilize every single resource it has in a manner that best serves its aims.
Operations management can also help an organization understand global and local trends and, in this way, help the company know what it needs to produce and when. Doing so ensures customer satisfaction and that an organization’s products will never be out of stock. It also helps the company to never be caught flat-footed should market and customer demands change. This ensures the company is producing just what it needs with the aims of satisfying demand and reducing wastage in production, as well as warehousing costs for goods that do not move as fast as they should because of market forces.
To get ahead of the game, you could consider studying a Master of Science Operations Management degree from an institution like Kettering University Online where you will learn about things like Six Sigma, continuous improvement and technology management. You will also have a better insight into:
- Industry trends
- Financial regulations
- Political uncertainties
All three of these things can derail a company and interfere with its ability to source materials, produce goods and services and sell to its customers thereby interfering with its ability to make money.
Operations Management Can Help with Services Design
When there is only one company offering a good or service in a new market, customers have no choice but to buy from it. It is therefore quite normal for companies like this to not put too much thought into how they package their services and how they offer them to their customers.
When new players enter the market, companies have to think about service design to stay competitive in a shrinking market. When changes like this happen, customers look for reviews and information about the different companies to see which one would serve them best. If the service design is not perfect, customers will choose another company.
Operations managers work to ensure a company’s service design is faultless and when it is, customer satisfaction, sales and profits all go up.
Quality Management
The final step in the manufacturing process is quality control. Every company sets standards for their goods and services so the final product is of the highest quality possible. Operations management also inform quality management practices and can help a business deliver better products and services because operations managers know a company’s customers best.
Driving Productivity
Operations managers use various tools and methods to monitor and make decisions on the productivity levels of a business. They do this to increase productivity among the employees. Remember that operations managers are primarily tasked with using every resource available to them, including labor, in ways that increase output and increase profits.
Even though production managers keep an eye on employees to maximize productivity, there are several other factors that they monitor with the same aim. These are:
- Job-related issues
- Environmental issues
- Resource issues
All three of these factors, coupled with employee-related issues, can affect productivity, and it is the job of the operations manager to correct them if anything goes wrong.
Leveraging Technology
Operations managers advise companies on new technologies that can help drive the company forward. If an operations manager thinks a certain technology will help with better customer acquisition, product delivery or any other business operation, you can expect them to talk to their bosses about it.
Operations managers do a lot. They can be thought of as the engines that run behind the scenes to ensure everything is running as smoothly as possible. Because of their ability to leverage labor, materials and money to improve productivity, product delivery, quality control, and customer satisfaction, they are the biggest drivers of efficiency and profits in companies and businesses that employ them. If your business does not have an operations manager, do get one as they will change your business for the better.
Unnati Vaidya
Unnati Vaidya is a freelancer Content Writer and SEO generalist. She is an enthusiastic reader of Novels and a big fan of watching Sci-fi movies and seasons!