Showing all articles tagged: operations


HOTI ... Pizza Flow Example

Pizza, pizza, who doesn't like pizza? (OK, so some of us don't, but most all of us at least know what it is!) The back-end operation flow of a pizza parlor is a good example of using a flowchart to identify the critical path of delivering a product to a customer, to show what material and equipment is needed, and to identify the people involved in each stage of the process.


How to Write an Operations Manual

Operating a company without a formal set of rules and regulations is similar to sailing across the ocean without navigational charts. Rarely can objectives be reached in either case without an operations manual that explains "how to do". If your business seems to be sailing along without an operations manual, why take the time to compile one: Because there are at least eight ways it can benefit you and your company.

An operations manual...
  1. Establishes a comprehensive source of company policies and procedures
  2. Facilitates even-handed, consistent administration of personnel policies
  3. Promotes continuity in management style throughout the organization
  4. Helps identify problems before they arise, minimizing "crisis management"
  5. Reduces the number of emotional decisions, encouraging a businesslike climate of objectivity
  6. Defines authority clearly and distributes responsibility
  7. Becomes a training tool for employees
  8. Offers examples of standard forms, reducing the number and variety of forms used.
In any growing company, no one has the time for an extra project such as creating an operations manual. Top management must personally endorse the project and provide leadership to keep it moving. Establish deadlines and designate a "doer" in your company to get the job done.

Gather all existing procedures, systems, and forms. Talk to all levels of management and staff to get their ideas. Discuss the manual with field employees to ensure that all actual day-to-day working needs will be covered. Input from former staffers can be valuable, too. Concurrently, prepare a checklist of points that should be covered in your company's operations manual.

Consider these eleven basic sections:
  1. Introduction: Purpose of the manual; how the company started; business objectives and philosophy; description of products and services; economics of your business.
  2. Organizational chart: Who reports to whom; job descriptions; addresses of company's facilities; importance of each department and division.
  3. General employee information: Attitude toward customers, suppliers, and other employees; statement on how to handle telephone callers and visitors; housekeeping policies.
  4. Personnel administration: Hiring practices; employment forms; when and how workers are paid; outside employment; reprimands; hours of operation; coffee breaks and lunch hours; dress code; personal behavior; frequency of salary reviews; advancement opportunities; benefits paid by the company; contributory benefits; explanation of payroll deductions; labor laws; use of time cards, scheduling; overtime; vacation entitlement and holidays.
  5. Products and services: Customer relations; supplier relations; sales procedures; taking pride in what the company does.
  6. Operational procedures, processes, methods, and models: Flowcharts, process documentation, detailed directions and procedures for each department. This detailed documentation may not necessarily be part of the “master" manual but instead may be subdivided into appropriate sections which reside in detailed department manuals.
  7. Traceability and sustainability: Administrative procedures; ensuring accountability; billings; sample of each form; purpose of each document; routing flowchart for paperwork; summary of deadlines and due dates.
  8. Safety and security: Protection of physical premises; personal security; statement about protection of company assets; importance of safety to the employee and the company; handling of confidential information.
  9. Emergencies: How to handle accidents; what to do in case of fire, power failures, robberies and thefts’ emergency telephone numbers.
  10. Maintenance and repair: Telephones; service people; who should authorize repairs; trash removal; key control; handling of equipment; property damage or loss.
  11. Legal, moral, and ethical: Compliance with local, state, and federal laws; handling of regulatory agencies; inspections; record keeping requirements; maintaining ethical standards.
Once you have pinned down what you want to say, how should you say it? Convey the meaning briefly and clearly. Remember that the message is for the benefit of the readers—your employees. Too often, company documents are written either pretentiously (to enhance the stature of the writer) or ambiguously (to protect the writer should a question arise).

Don't fail to put certain procedures in writing just because it seems impossible to cover every eventuality; additions and revisions are inevitable.

Here are several tips on writing the manual:
  1. Present instructions in a logical order.
  2. Be specific. State exceptions if those exceptions have occurred frequently in the past.
  3. Use language and examples that are common to your company's employees.
  4. Adopt nonsexist language (for example: salesman becomes sales representative or salesperson, watchman becomes guard).
  5. Have a qualified outsider (preferably an educator or professional editor) do the editing.
  6. A loose-leaf, three-ring format or electronic equivalent permits great flexibility in using, reviewing, and updating material. "Sections" should correspond to chapters of a book. Within each section, the material should be in outline form.
  7. Do not use a "Miscellaneous" section. It becomes a catchall revealing less-than-thorough categorization.
  8. Each page should contain the section title, the date the page was issued, and a page number. This simplifies both the task of keeping the manual updated and the distribution of new or revised material.
  9. To complete the manual, prepare a thoroughly cross-referenced index to topics covered.
  10. A chain of command should be established to make revisions, and one person in top management should approve all proposals for change. Otherwise, duplication and overlap will create confusion.
  11. Finally, your operations manual should be reviewed at least once a year because, by its very nature, a growing company creates change.
[From Kenneth R. Chane, edited by Jim Jindrick]
1.06

The Complexity of a Venture Affects its Value



In general, the more complex a business venture, the greater the valuation. The more complex a venture, the longer it would take to replicate it from scratch. And time is money! While most any venture can be replicated, it will take time and money to do so. Is it less expensive to start from scratch, or buy an existing venture? That's the essence of the thought process buyers go through before investing in (or, in essence, buying) a business.

Venture complexity may well come from a variety of sources. For example, brand recognition and reputation is an example of "complexity" that encompasses the blend of perspectives from industry, markets, customers, suppliers, employees, community, and more. While some brands do become "viral" relatively fast, most brands evolve over a significant period of time. Arguably, the brand is the only long term sustainable competitive advantage of any company. That's assuming, of course, that the company doesn't "screw it up"!

1.07


Rapid Prototype Module Template








This is a great tool for designing a new process, a new product, software, apps, gizmogadgets, and more!

Answer these basic questions ...
  1. What are the outputs desired?
  2. What are the inputs required?
  3. What is the process to transform the input into the outputs?
  4. If this happens, then what? Else, what?
  5. How does the environment(s) affect the inputs, the process, the outputs?
  6. What happens to any wasted generated by the process?


Business Flow Structure ...

1 ... Define what is happening in each of the seven major functional areas of the venture.
2 ... Define what is happening in each of the 14 links between the functional area.


Jim Jindrick

You can send Jim Jindrick a message here: TextJim.VentureNotebook.com Jim's books are available here: Amazon.com/author/JimJindrick

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