10 OM Decisions - Part 1

I wanted to share some basic knowledge that really hit home for me that I don't reflect on enough that may benefit you as well. Whether you're starting something as big as your own business or as small as a personal project or side hustle you can benefit from internalizing the 10 OM decisions. Though there isn't a perfected step-by-step approach, or one size fits all application the questions are thought provoking and help keep you on track with organizing operations.

There are 10 strategic decisions in operations management that I’d like to cover in a 10 part series. Not necessarily a deep dive but a view from 30,000 feet to help stimulate your thought process in case you’re looking for ways to revamp your current operations. The 10 decisions can be applicable at any level of planning whether it’s the strategic, tactical, or operational level. (Learn more about the different levels of leadership here). Let’s jump right in, here are the 10 OM decisions:

1. Goods and Services

2. Quality Management

3. Process and Capacity Design

4. Location

5. Layout

6. HR and Job Design

7. Supply Chain Mgmt

8. Inventory

9. Scheduling

10. Maintenance

Just because these are the 10 OM decisions, it doesn’t necessarily mean that they are the one and done decisions to launch a business or project. It’s simply a guide or outline for critical analysis along the way.

When you see goods and services think about it holistically whether you are the COO, Director of Operations, Operations Manager, or Warehouse Supervisor. You’re actionable decisions should be answering a series of questions:

What goods or services do I offer?

This is a pretty straightforward question and can be answered relatively easily. This is the outline to which all the remaining questions will be applied to

What problem does my goods or services solve? If you struggle to answer this then you may want to redesign your good or service to better answer this question. In short if your good or service doesn’t solve a problem then check for value added opportunities to give your customers (internal or external). At which point you should ask yourself do they need my services or goods...

What additional goods or services can I add to my current situation in order to provide MORE value to my customers (internal or external)? This is the eternally looping question to keep in your mind, and should really be adopted as a continuous improvement mindset. The ever changing needs of customers should have you trying to be in front of those changes where you feel like you’re leading the change rather than reacting to it.

What is the value of my goods or services? Naturally the need for this question is to help determine your COGS/COSS (Cost of Goods or Services Sold). If the consumer's perceived value is LOWER than your COGS then you'll need to redesign your good or service to include more value or at a cheaper operating cost.

How do I streamline or minimize the cost of goods and services sold? One of my favorite and most grossly overlooked questions. Coming up from operations management it was always my responsibility to protect the budget. Since I wasn’t sales this is how I added value to my customer which was internal (my employer). This comes in many forms but most widely viewed in procurement, manpower, labor management, process design, capital expense requirements. To know if you have the secret sauce ask yourself, “Is it sustainable”? Anyone can make chaos look good temporarily...

Again this is a high level overview and should help stimulate your thought process. Go and check out my recent decision to add custom packaging for my customers here. It’s an outline of the first OM decision in action. I'll add more tools later, but if you need something to chew on for now just research the topic from an operations management standpoint.

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