How to Handle Special Situations in Operations Management
Operations managers must sometimes cope with a number of special situations. These range from one-off projects to outsourcing processes and may include managing immature or obsolete products. Here’s some advice on managing special situations.
Operations managers must often deal with projects that are executed only once. However, some projects are big enough and occur often enough that reusable processes for managing them can emerge.
Planning is important for any operation, but even more so for projects. Mistakes or failures in upfront planning can’t be gradually fixed through later tweaks the way they can be for routine ongoing processes.
Another part of the problem is that, by definition, a one-time project hasn’t been done before, so upfront estimates need to be created without data from past performance. This is part of the reason that so many projects are completed late, over budget, or both. Allowing for estimate error and planning for contingencies are critical parts of project planning.
Good project management also requires aggressive risk management. Because projects aren’t repetitive processes, risks can be harder to identify and manage. Fortunately, a few good tools are available; among them are risk registers to help identify, mitigate, and track risks.
There are a lot of good reasons to outsource, but outsourcing isn’t a panacea for poorly considered business models and operations planning. Companies need to carefully identify what work to perform in-house and what to outsource. Then, after an outsourcing relationship is established, a structure to manage it effectively is vital. Be sure to figure out how to manage contracts, specifications, managerial and co-located personnel, and information-sharing structures.
Product life cycles
Operations must adapt to the product life cycle. For products at an early stage of the life cycle, companies need to put a premium on flexibility for processes. As the product or service takes off and enters its growth phase, operations become more about scalability. When a product is mature, reducing costs while maintaining quality is the main focus.
And as the product declines, the challenge is to figure out how to reduce commitment to the product without alienating customers.