Many businesses and manufacturers alike struggle to fully understand how to improve efficiency within their operation. As many business owners and manufacturers are finding themselves running into this problem, locating the operational objectives have become a viable solution. Operational objectives differ from strategic objectives in what they focus more on “how” than “what”.
An example of this includes a business that decides it needs profit improvement through improving margins as opposed to increasing sales. It would pursue this strategic goal using operational objectives targeted at reducing overhead or manufacturing costs, which changes how businesses operate in certain areas. This is why it is extremely important to understand the operational objectives for a business and a manufacturing operation.
Operational Objectives for a Business
Within a business, understanding the operational objectives are key in order to improve your overall facility as a whole. Therefore, here are the operational objectives for a business:
- Improved Staffing - Operational objectives in the human resources department help meet strategic goals such as enhancements within areas pertaining to recruiting, retention, and labor cost management. An example of an operational objective to reduce labor cost is to improve scheduling within your operation. This aids in reduction of labor costs through avoiding overtime, decreasing the utilization of more expensive contract labor, reducing turnover, and avoiding the need to add a shift. HR can work with the production and sales department to learn when large orders may occur and when there will be slow times. Ultimately, this enables production to schedule higher output during slow periods to ensure that there will be product on hand during busy periods - avoiding any extra labor costs.
- Improved Production - Improving production is a goal of many manufacturing facilities and a common operational objective. Production areas include the factory of manufacturer, kitchen of a restaurant, auto repair shop, and more. Improving production includes increasing output, decreasing costs, and raising quality of the product. Improving quality of the product as an operational objective will aid in improvement of sales, strengthen your brand, and decrease returns and cost that are associated with repairs and make-goods.
- Improved Debt Management - The finance department does more than simply set budgets and record numbers as they occur. Finance also sets strategies that aid in maximization of profits through optimal billing, collections, debt-service management, and investing. An operational objective of a finance department includes decreasing interest payments. It can do this operationally through shopping for better lines of credit, reducing the credit terms it offers customers in order for them to receive cash much faster to pay down debt. They do this using excess cash to reduce principal balances on loans reducing receivable collection times.
- Utilization of Information Technology Increase - Technology is key within manufacturing operations and is a substantial operation objective for a business or manufacturing operation. If a business relies on its website and social media to sell products, operational objectives target ways to make it easier for customers to buy online and share information about the business at the most advantageous costs. One operational objective may include adding or upgrading online sales capabilities, which includes optimization of a shopping cart and checkout process. Utilizing information technology is extremely important for manufacturing operations that are seeking to have thorough visibility into their overall operation.
A software that can aid your day to day operations within a production facility is PlanetTogether’s Advanced Planning and Scheduling Software (APS). Advanced Planning and scheduling software is a visual scheduling system that allows you to have thorough visibility into your production process and manipulate areas of production that are in need of efficiency enhancement. PlanetTogether’s Advanced Planning and Scheduling Software (APS) is a must for modern day manufacturers that are seeking to take their operation to the next level in terms of operational efficiency, cost reduction, waste elimination, and more. APS software can easily be integrated into manufacturing operations around the globe.
Advanced Planning and Scheduling Software
Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.
- Create optimized schedules balancing production efficiency and delivery performance
- Maximize output on bottleneck resources to increase revenue
- Synchronize supply with demand to reduce inventories
- Provide company-wide visibility to capacity
- Enable scenario data-driven decision making
Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.
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Topics: operational objectives