Methods & Techniques Used in Operational Management

by Emily Hunsaker - Updated June 28, 2018
Two Business Person Walking A Dark Factory Hallway

Operational management refers to the ways in which a business manages the resources responsible for creating goods or services including materials, machines, people and technology. The discipline is rooted in planning and creating processes that make the business run more efficiently by focusing on factors such as cost control, quality assurance and profitability. In the field of operational management, managers and business owners must continually improve these processes to remain competitive.

While the principals discussed in the field of operational management typically refer to large corporations, small business owners can also benefit from creating operational structures. Operational management techniques can give small business owners the chance to decrease costs, increase customer satisfaction, boost revenue and improve the overall operation of the company by putting processes in place for future production.

Designing Processes

The foundation of operational management revolves around putting a set of processes in place to ultimately improve your business’s bottom line. A process is an automatic system that a business uses to address a specific problem. Processes offer small businesses a host of benefits including saving time, eliminating problems and improving productivity.

While some processes are instinctively created, others require more planning to implement. To develop processes in your business, you must first identify issues that happen regularly and take up a lot of your employees’ time or issues that frustrate you. Then, create a well-defined plan to alleviate the issue at hand. Finally, execute your plan over and over again until it becomes routine.

Project Management

Successful operational management includes the use of project management techniques. Business owners must continually make decisions regarding scheduling, work assignments and sequencing of various projects or processes in the short-and-long-term confines of the business. Small businesses can make use of a variety of project management tools or software to simplify the task of managing projects.

When managing various projects within your business, there are four factors to consider: schedule, financing, controls and evaluation. Each project completed in a business must be finished in a limited time frame. Effective project management means ensuring that each individual component of the project is completed in a timely manner so the project as a whole remains on schedule. Additionally, a project’s manager must also track project costs using cost functions or a traditional budget. To ensure your project stays on track and on-budget, controls are a necessity. Consider controls that place a limit on spending among individual team members or setting milestones as deadlines for each component of the project. And as the project wraps up, it is important to evaluate the project as a whole and the controls within it to determine what aspects were a success and areas where the team can improve.

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Continuous Improvement

The best organizational managers are never satisfied with their results. Instead, they always seek to improve upon what they have done. The concept of continuous improvement is based on a Japanese philosophy called Kaizen, which involves identifying benchmarks and allowing your employees to take ownership of their improvements. A business’s processes can always be improved upon, whether you seek to save additional time or increase revenue.

Long-term planning requires that you build upon the improvements achieved through your operational management strategies. To create an environment of continuous improvement in your business, instill a sense of employee involvement in all business processes, emphasize the importance of teamwork throughout each process and encourage employees to develop a sense of ownership of the business’s processes.

About the Author

Emily Hunsaker is a writer and marketing consultant with diverse employment background, ranging from journalism to nonprofit marketing. She earned her bachelor’s degree in communications from Tulane University, in addition to an MBA from Southern Illinois University.

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