Operations Management

E&S Solutions has over thirty years of experience in research & development, new product development, manufacturing and logistics.

A formal definition of operations management is “the administration of business practices to create the highest level of efficiency possible within an organization”.

Operations management is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.

Whether or not an enterprise is a vertically integrated developer, manufacturer and seller of products or simply a re-seller of products manufactured by others, the drive for continual improvements to efficiency is just as important regardless of size or type of business.

What Drives Operations Efficiency:

 

Human Resources

Smart workers develop better products, develop better processes for manufacturing higher quality products more efficiently (lower cost) and for delivering them to their customers when they want them. Increased efficiency builds a competitive advantage and enterprises that leverage competitive advantages win more business than less efficient competitors. Less efficient organizations stagnate, decline and are eventually sold or liquidated.

Information Technology

Computers can perform certain routine functions infinitely quicker than humans can and are therefore, by definition, more efficient.  Intelligent deployment of computer technology results in more efficient decision making, accelerated product development, more efficient manufacturing and assembly, more efficient logistics and improved sales and marketing. In the connected world of the 21st century information can be accessed 24/7 from wherever decision makers are located and can be acted on without delay.

Combining increased efficiency of product development, manufacturing, logistics, finance, sales and marketing and customer service with faster decision making by management is a requirement for survival of a modern business enterprise.

Capital

Sources of capital are previous profits, commercial or private lenders or from new investors in the form of equity. Access to capital by small to medium businesses is generally more difficult and more expensive than for larger enterprises.

Without access to capital, businesses cannot pay for the human resources required to develop better products, manufacture them to a higher quality at a lower cost and deliver them cost effectively to their customers. Nor, without capital, can a business deploy the information technology required to provide management with real-time information to improve logistics, customer experience and overall decision making efficiency.

Small and Medium Business Enterprises

Investing is risky and small to medium businesses have limited availability to capital so any investments have to be considered carefully as failures can lead to severe financial stress and even bankruptcy. A realistic and conservative plan must be developed as the foundation for any investment.

Although there is no guarantee of success for even the best thought-out plans, without a plan, investments should not be made. However, business enterprises cannot not afford to stand still, believing they have accomplished their objectives or paralyzed by a fear to invest, so they must figure out how to invest in order to continually improve their operations and stay competitive.