What is Business Operations?
Definition: Business operations are the activities that a business or firm engages in with the goal of converting raw materials into finished goods or services which are then made available to consumers.
Every business or company has a series of activities through which it develops its products or services. For example, the company can source raw materials, which are then passed through a refinement process where and other processes through which they are converted into the product that the company then distributes to a market. This is an oversimplification, but it paints a picture of the company’s operations.
Operations are therefore geared towards making sure that every facet of the business runs smoothly, so that achieve the end goal, which is to generate profit. Operations are thus aimed at making sure that every aspect of the business performs its function.
How Operations Work
Although many business operations have similar approaches, there are nit bits in between that make operations of one business different from the operations of another business. That is why the term ‘operations’ does not fit into a specific description but instead covers a wide scope. For example, enhancing operations could mean strategic structuring of processes and systems to add more efficiency. It could also mean being actively involved in every facet of a project to achieve the operations enhancements.
As noted earlier, the operations of business have different aspects, and each has its role. When each aspect is optimized to perform at its peak, then all the aspects cumulatively contribute towards an overall better performance for the business. It, therefore, makes sense to ensure that both the owners of the business and the employees have a good idea of how the operations work. It is also important to make sure that multiple people are skilled in a specific process, if not all, the processes.
Limiting the knowledge to just one person or a few people is not a good idea because in case something happens to that person who is specialized in a specific aspect, then that process might be negatively affected. If one process is affected, then the entire business might also be affected. In this case, redundancy is a good idea.
The higher the skill level of the business owners and employees with regards to the business processes, the more success that a business can achieve in its operations. A business that wants to achieve more success in its products or services should, therefore, double down on mastering every facet of their operations.
Business Operations Examples in Common Industries
Restaurants
The food industry has challenging processes, especially when it comes to inventory where highly perishable products are involved. In this case, the business should understand its clientele and manage its inventory accordingly so that it can reduce wastage while at the same time ensuring that it has enough for everyday operations.
Service industry
The service industry usually has to split operations between its internal activities and also the operations that are customer-centric.
Manufacturing industry
Manufacturing industries usually have highly specialized processes, and the level of specialization might be even higher depending on the type of product that the company makes. For example, a chemical manufacturing plant has more complex processes compared to a company that manufactures toys. The employees in the chemical manufacturing plant need a higher level of specialization due to the complex nature of chemicals. This also translates to more investment not only in equipment but also in the work-force.
Digital firms
These types of companies usually focus heavily on the personnel aspect because it is there is not really that much mechanization involved. Instead, it focuses on hiring employees that can design digital solutions that then allow the firm to generate value for the consumer or end-user. Outsourcing is a common approach in this type of business because it helps to reduce the cost of labor while also securing highly specialized skills.