Managing your operations effectively is a prerequisite for overall business success. In most businesses, operations consume a large part of company resources and are vital for high rates of customer satisfaction. You can make sure your business is a success from an operating perspective by monitoring key elements and striving for continuous improvement in the underlying processes. Operational success lets you focus on revenue and profitability.


A key success indicator for a company's operations is the manufacture of high-quality products. The output from production has to be fit for its intended use, durable and of consistent quality. When the product quality matches the needs of the company's target market, sales increase, while customer service requirements and warranty claims decrease. You can help ensure a high-quality output with a design that lends itself to consistent manufacturing processes, by measuring process variables during manufacturing and correcting for deviations, and by testing the final product extensively.

Matching Supply to Demand

The purpose of operations is to supply the required products as needed. Careful planning of operations with reserve capacity, flexible working hours for production employees and the use of suppliers who can react quickly allows you to adjust production to customer demand. Too few products result in lost sales while overproduction can be costly if demand continues to drop and the company has to keep high inventories. This element of business success measures how close you come to the ideal of having an item come out of production just as a customer wants to buy it.

Use of Resources

Operations uses facilities, equipment, labor and financing to produce output. A key element of business success is to make sure operations makes use of these resources in the most efficient way possible. Keeping inventory low reduces financing requirements and uses less space in facilities. Balancing use of skilled labor with mechanization and automation for optimal use of space and investment helps increase efficiency. Reducing wait times and optimizing the movement of material and people in the process reduces the amount of space required and the time it takes to manufacture an item. Your use of these optimizing techniques helps the success of the business.

Cost Control

The amount of profit a business generates is an important element of business success, and the cost of operations directly affects profitability. Lower costs, and the resulting price decreases often let your company increase sales. When operations increases production to meet the higher demand, it can usually reduce costs further through economies of scale. Possible sources of cost savings are comparing ownership with the possibility of renting facilities and leasing equipment, changing suppliers, eliminating costly but unnecessary features in products and finding lower-cost materials while maintaining quality.