No company could survive unless they made a profit. That should go without saying, but what happens when you find that you should be realizing a higher profit than you are currently seeing? Many times, it’s due to poor or ineffective management, but other times it’s related to much broader and uncontrollable issues such as the economy on the whole, or specific geopolitical factors that interfere with day to day business.
In any case, operations management is meant to tailor a business to the current climate, and this is when you might want to ensure that you have a well-qualified operations management team leader overseeing your company. Have you thought of offering advanced training to company management? Why not help them realize personal as well as company goals by seeking a masters degree in operations management online? You might be surprised at just how these four ways an improvement in operations management can improve profitability for your business.
A Word About Operations Management
Before looking at those ways in which sound operations management can increase profitability within your organization, let’s take a quick look at exactly what that means. Operations management is really a simple idea that sounds much more complicated that it really is. Actually, it’s nothing more than the way things are done within your company. It involves everything from conceptualizing a product (or service) to putting it into production and then bringing it to your market, for a profit obviously.
This is where so many companies fall short of the mark – the area of profit. Sometimes it’s something as simple as trying too hard to undercut the competition at a loss the company can’t afford. Even so, with that masters in operations management, all these things fall within the realm of what you, or your managers, are capable of dealing with. Now, let’s look at those ways in which sound operations management can increase profitability for your company.
Efficiency in Production
When it comes to making the biggest profit possible without suffering quality, efficiency is often a key factor. This includes such things as materials as well as labor. For example, what happens if it takes three people to assemble a product which can be automated on a production line? The initial cost may be larger but over time, the savings in payroll can more than compensate for the cost of automation.
While many companies are reluctant to use automation for fear of putting loyal staff out of a job, the reality is that those people can be moved to other tasks which are not as easy to automate. In other words, automation doesn’t necessarily mean that employees are put out of work, it just means that their services can be better utilized elsewhere at a higher profit for the company.
You will notice that production efficiency is intrinsically linked to quality control. As mentioned above, efficiency should never mean sacrificing quality. Perhaps you are looking for more cost effective raw materials but never settle for substandard products that will result in a loss of quality for your end products. A good operational manager will ensure that cost and quality are balanced in such a way as to ensure that the end customer is well-satisfied while the company spends less in terms of time and money to reach that goal. Again, this is something dealt with in advanced training in the field.
Warehousing and Inventory
This is perhaps one of the trickiest areas of operations management to get right. It’s all about keeping sufficient stock to satisfy orders without over or under stocking your warehouse. Inventory control takes precision, and having too much or too little can result in heavy losses for your company. Say, for example, you have a store in the mall that carries trendy women’s apparel. It is predicted that one particular designer will be a big hit this season, and so you overstock your shelves, relying on the fashion magazines predictions.
Unfortunately, those fashions aren’t as in-demand as predicted, and so you are left with shelves of items you need to discount, sometimes at a significant loss. There is both an art and a science to inventory control, and that is another focus of operations management advanced training.
This is another area which can negatively impact your bottom line. Logistics are nothing more than managing the ‘flow’ of things. Whether it’s ordering from a supplier to be sold to an end user, or producing those goods to reach the end user, how that takes place is the area of logistics.
Logistics involves everything from tracking orders to managing delivery routes and everything in between. Whether it’s managing production schedules or renting storage space for warehousing, it’s an area of your business where you can save a ton of money or lose that money if handled ineptly. How you get stuff done – the flow of things – can make or break a business, and this is why it is an integral part of operations management.
Why You Need That Master’s Degree
In the end, you may think that these are all things you can learn on the fly. That can be a huge mistake. You have a BS in Business Administration, for example, but that only touches on basic concepts within operations. With advanced degrees, you can choose to specialize within your given industry so that you are learning the latest technology and trends within your field.
Not only will you realize a greater profit by gaining an advanced knowledge of your industry, but you will be better able to organize operations efficiently so that your company is positioned for growth. Profitability and growth go hand-in-hand and in order to be ready for that expansion, it will take advanced knowledge and training on an organizational level. The higher levels of training you receive, the easier it will be to achieve that level of profit your company just isn’t realizing.
Whether taking courses online yourself to get that MS in Operations Management, or equipping your current managers with registration for that degree program, you can expect your company to profit, and that’s the bottom line you are looking for – increased profitability.