You may have heard talk about operations management and how it can save money, reduce waste and increase profits.
The goal of operations management is to make an organization run as efficiently as possible.
It can be extremely valuable, whether you’re selling a product or service, in either the business-to-customer or business-to-business space. Any venture that requires more than one person to source, produce and deliver its goods or services can use operations and supply chain management to help maximize profits.
If you’re unsure on whether or not you need operations management, here is a broad view of what it is and how it can help just about any business.
What is an operations management plan?
Operations management aims to get the most out of company resources, whether that’s:
- Employees, subcontractors or suppliers
An operations management plan is different than strategic planning. The strategic plan is a high-level view of your company’s goals, whereas your operations plan is the more ground-level details of how you will get there.
You may have some version of this already. You may call it your playbook or the best practices guide.
It’s good that the processes on which your business depends are documented. However, the information can become siloed or trapped with one employee or supplier. If you lose that persona or partner for any reason, you lose all of that operational information.
The operations plan should be more dynamic than your strategic plan, and you may have to update it more frequently. A strategic plan shouldn’t change unless there is a major shift in the marketplace or discovery. However, your operations plan can change anytime you spot an opportunity to do things better or more efficiently.
Signs you need an operations management plan
As we said earlier, it’s never a bad idea to prepare one. However, you should really consider creating a detailed plan if you’re noticing:
- A lack of efficiency in your operations
- Wasted time or materials
- Ongoing miscommunication about a particular supplier’s responsibilities
- Any drop in customer satisfaction
For example, let’s say you’re selling a SaaS (software as a service). Maybe you’ve had frustrated customers recently because there has been some confusion about who is in charge of setting up client logins. Sometimes one person does it, while at other times another does.
This is a sign that you need to define every single step of the customer’s journey. This starts with them as a sales prospect all the way to being completely onboarded. This exercise will show you where there are opportunities to cut waste or improve efficiency.
How do I create an operations management plan?
You will find lots of operational plan templates online. Most of them can be tailored to better match the specifics of your day-to-day operations.
Any template you use should have some combination of the following:
This includes the short-term goals that need to be met to reach your long-term goals. How will you measure short-term and long-term success?
Define the specifics and the scope of the work that needs to be done.
What are the deadlines and milestones that need to be met in order to reach your goals? There may be a lot of interdependencies, as one department’s milestone (i.e. production) may trigger the start of another department’s work (i.e quality control).
The funding needed for every step of your process.
What are the potential risks and roadblocks that may arise along the way? How do you plan to get through them?
How will you ensure quality and reliability? And at what part(s) of your process will this take place?
You can feel free to add as much or as little to each section as possible, or change it as need be. Your own business might even require sections that we haven’t listed here.
When is the best time to create an operational plan?
Ideally, you would have created this plan before your business even started operating. You would change it on the fly as you identified things you didn’t account for, or as you found a better way to do things. However, small business owners don’t always have time to do this.
But, it’s never too late to create one! As we said, if you believe there is an opportunity to do things better or more efficiently, that’s a sign you should finally sit down and create a proper plan.
Make sure every department and stakeholder has input into creating the final plan. This is crucial in creating an operational plan that accurately captures how things will work, instead of how things should work.
The bottom line
Your operational plan is not a rigid document carved in stone. It’s a living and dynamic guide that may change several times over the course of a year. And that’s OK.
The idea of creating an operational plan is to see the little steps that drive your venture towards achieving bigger goals. As with anything complex, divide the big improvements into achievable steps with deadlines. With a little planning, you should see improved efficiency … and ultimately better profits.