How To Measure Business Operations

Take a measure of your company’s business operations and see how they can be further improved. There are various factors and working details to consider in accomplishing the task, so drawing conclusions can be moderately difficult. One good way of knowing where to focus, how you can improve revenues, and save on costs is measuring your business operations.

What you need:

  • Knowledge of company’s business model
  • Records and files of company’s production
  • A team of consultants to assist in business operation analysis, if available

Hire or consult with industry professionals.

The task of measuring your company’s business operations can be made easier if you have a team of consultants for assistance, than just you doing the work alone. If you plan to have consultants, make sure that they are knowledgeable and familiar with your company’s operations and the industry you operate in.

Review the company’s growth.

Firstly, trace how much the company had grown over the last three business quarters. Sort out the growth of each department, and chart how much each department had grown in terms of employees, output, productivity, and the like. You may also want to look into the relationships between the company’s different departments to see if it a factor in the company’s growth.

Analyze each department’s production data.

Individually analyze the production data of each department or work site, and compare them with the optimal manufacturing capacity that the sites are able to make. Take into account which aspects and factors can be improved to increase each particular department or site’s efficiency. The employee and equipment factors are the ones that you are most likely to figure out improvements for. 

Analyze the efficiency of advertisements.

To measure the effectiveness of your company’s advertisement ventures, analyze how much each advertisement medium costs and how much has your company publicity benefited from each medium (e.g. newspaper ads, radio ads, television ads). There should be records of customer feedback that show how they have heard about your company. Compare these figures and see which advertisement methods are effective or not.

Analyze the causes of production problems

Search and identify the problems that are detrimental to production (e.g. employee problems and equipment defects). You can sort these problems according to each department or work site that they are found in to make the analysis easier. Calculate how much money a particular production problem can cost the company, and highlight this financial value to determine the threat of each problem. 

Determine the availability of new products to sell

Contact your company’s research and development department see if they are able to plan and develop new products that can be sold to the public. Analyze the potential sales of these new products, and compare with those of your competitors, and then note which factors affect the rise and loss of profit.

Calculate the price for your products.

Compare the prices of your company’s products and those of your competitors, and then you have to determine the lowest possible price for your products that can undercut the rival companies. Be sure to be familiar and well-versed with the critical path analysis of the company’s production so you know which factors you can use to your advantage.

Measuring your business operations will help you determine which departments or products are performing well, and which are lagging behind. This knowledge will help in improving productivity, efficiency, and bottom-line.


Share this article!

Follow us!

Find more helpful articles: