Operations Management & Business Transformation

Operations management is "the administration of business practices to create the highest level of efficiency possible within an organization to convert materials and labor into goods and services as efficiently as possible and 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.

Three main components drive efficiency: 

  • Human resources
  • Information technology
  • Access to and successful deployment of capital

Human Resources

Competent workers develop better products, create better processes for manufacturing higher quality products more efficiently (lower cost), and deliver them to their customers when they want them. Increased efficiency builds competitive advantage; 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 and are 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 around the globe 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 the survival of a modern business enterprise. 


Sources of capital are previous profits, commercial or private lenders, or new investors in the form of equity. Access to capital by small to medium businesses is generally more complex and more expensive than for larger enterprises. Without access, companies cannot pay for the human resources required to develop better products, manufacture them of 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 & Medium Business Enterprises

Investing is risky, and small to medium businesses have limited availability to capital, so contemplated investments must be considered carefully, as failures can lead to severe financial stress and even bankruptcy. The business planning behind any investment decision is vital.

  • A realistic and conservative business plan must be developed as the foundation for any investment.
  • Although there's no guarantee that even the best thought-out plans will succeed, investments should not be made without a plan.
  • No business can ever afford to stand still;
    • Believing it has accomplished its objectives or;
    • Paralyzed by the fear of perceived investment risk
  • Every business must learn to invest to improve its operations and stay competitive.

Well-considered investments keep a business ahead of its competition and enable business transformations required due to a lack of prior or previously failed investments.

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