INSTRUCTIONS: Following is a list of business operations components and the associated task of each component. Read each element carefully and match it to the correct business operations component. Utilize lean manufacturing Train all employees on new systems Minimize production errors Monitor vendor bargaining power Acquire computers, copiers, telephone systems Business Location Equipment Labor Operational Processes
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Introduction: Understanding Business Operations/Operations Management
Practice Activities:
1. Identify the associated tasks of each business operations component.
A Closer Look: Voluntrip’s Operational Framework
2. Create business operations plan.
Business operations/operations management includes the management and oversight of the physical location, facilities, equipment, inventory, warehousing, information managements systems, and people, that are required to manage a business. Understanding and effectively managing the day-to-day business operations are the keys to establishing and maintaining a successful business.
Business operations/operations management encompasses three major business imperatives:
- Generate recurring revenue
- Increase the value of business assets
- Secure income and value for the business
While each business imperative exists separately, they function interdependently and form the tenets of a business model. The business model, an outcome of business operations/operations management, is a company’s plan for generating revenue and profit by creating customer value through its employees, assets, and products/services offered. From an operational perspective, business operations/operations management should include the four overarching areas: location, equipment, labor, and operational processes outlined as follows:
Business Location
- Identify physical storefront or plant location
- Indicate hours of operations (internally define shifts for employees as needed)
Equipment
- Prepare list of all equipment (assets) and the associated costs
- Describe how the product is made/service is delivered
Labor
- Identify labor force requirements by title, role, responsibilities, salary, compensation, benefits, training and development (human resources plan)
- Identify industry standards and how these will be achieved/maintained
- Identify suppliers/vendors and the associated costs of doing business
Operational
- Align costs to sales projections
- Provide information on cost to produce/service cost
- Identify quality standards
- Identify safety standards
- Identify operational risks and constraints
- Identify any special requirements that the business requires (emissions, power, ventilation)
- List all operational tools/techniques the business will use (Lean Manufacturing, 5S, Six Sigma, ISO)
Business operations/business management comprises all the tasks and activities that a business undertakes efficiently and effectively to produce the goods and services it provides to its customers.
WHY THIS MATTERS: Business operations/operations management is the core planning function of business that includes equipment and facilities management and cost, maintenance management and cost, labor force (number of people required to achieve the production and sales goals), the budgets for each of the operations line items, and the planned operating profit margin for each product/service.
As a critical part of the planning process, it is extremely important that management build a plan that can be integrated with the other functional plans of the business. Once the plan is developed the following must be considered:
- Execution – the business must be able to implement the plan
- Identification of constraints – the business must be able to identify any limitations that might negatively impact successful implementation of the plan
- Observation – the business must monitor the ongoing operations
- Sales tracking – the business must track actual results (sales) of the operations plan and manage the differences
Efficient operations management helps a company reduce costs, increase customer satisfaction, and ultimately impact the profitability of the business.
YOUR TASK: The following activities walk you through the important aspects of business operations/business management and developing an operations plan. Complete each activity to ensure you fully understand all that a business must consider to ensure successful implementation of this plan.
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