Proven Operations Management Best Practices, Processes, Tools and Templates
Top Operations Management Tools & Templates
Introduction: What is Operations Management?
Operations management is focused on the efficient running of business processes designed to maximize output and results within an organization. Put simply, operations management allows business leaders to track, monitor and measure the key metrics within a business to make sure that everything is working as it should.
Every organization has processes and systems in place to ensure that the business continues to run, but the degree to which they manage these processes and operations varies greatly depending on the tools they leverage to track and monitor the efficiencies of those operations. In fact, operations management itself can take many forms, and can vary greatly in terms of scope and impact on the business.
An ineffective approach to operations management can also be one of the biggest roadblocks to sustained growth. Businesses that avoid setting up formal processes see their efforts hindered as inefficiencies take hold, reducing overall revenue and profit margin.
What follows is an overview of some of the top tools and templates to help support operational effectiveness at any stage of growth to drive greater organizational efficiency.
How to Create a Unified Operations Management Dashboard
How often have you heard this? “The individuals in my organization are doing everything they can to track progress and measure results, but there’s no shared definitions connecting everyone’s efforts.”
In most large established organizations, there is no lack of policies to measure progress, develop action plans, gather performance metrics, and drive collaboration. Unfortunately, most teams and businesses struggle to find the right blend of tools and resources which work well together in harmony.
Most teams cobble together spreadsheets, presentations, documents, communications tools and other software in the hopes that a home-grown solution to operations management will meet their organization’s needs. It’s haphazard at best, takes a significant amount of time, and often results in data being reported in a way that is outdated the moment it is presented.
We’ve worked with leaders at some of the world’s biggest organizations to help drive change management initiatives, innovation programs and operations management monitors. We’ve seen what works when there are “too many cooks in the kitchen,” and we understand the unique challenges that businesses face when they try to integrate multiple measurement tools and techniques together into a coherent operations management platform.
Because of our knowledge in this space, we have developed a system to guide your team through the specific steps needed to create and execute a unified operations dashboard. What resulted from years of research and experience with leading Fortune and FTSE 500 companies is the upBOARD Operations Dashboard Command Center, a tool that helps bring together best-in-class tools and templates for businesses looking to manage their operations from one consolidated dashboard. We’ve made many of these individual tools freely available as downloads.
When taken together, an operations dashboard transforms reports, tools and key performance indicators (KPI’s) into a consolidated and visually compelling system that’s always on, always current, and always available for everyone to see.
Useful Tools & Templates
Objectives & Key Results (OKRs) Template
Without clear objectives, it is impossible to manage operations within a business effectively and efficiently. Businesses that develop clear objectives and key result measurements are more likely than others to build strong operations management systems.
Objective and Key Result (OKR) measurement is a management strategy for goal setting within organizations that helps drive progress and raise accountability across members of the team. The purpose of OKRs are to connect company, team, and personal goals to measurable results.
OKRs were originally developed in the 1970s in California by Intel President Andy Grove. Now, OKRs have spread across many companies, especially when they were introduced to Google by John Doerr. OKRs are regularly used by tens of thousands of companies from startups to Fortune 500 tech giants. Google, LinkedIn, Intel, Zynga, Sears, Oracle and Twitter are just a few businesses that track and measure progress across key metrics OKRs.
You can check out the OKR Template here for yourself:
OGSM & Key Performance Indicators
OGSM stands for Objectives, Goals, Strategies and Measures. It is a strategic planning method that provides clear goals and identifies the strategic choices to achieve them.
Key performance indicators (KPI) are part of the OGSM planning method. KPI stands for key performance indicator and is a type of performance measurement used to evaluate the success of an organization or of a particular activity.
In order to develop a list of KPIs that will drive growth within your organization, your team should start by looking at the basics to understand your organizational objectives. This involves looking at your main goals and then breaking these down to understand how you plan on achieving them. Objectives are basically business strategies while KPI’s are the quantifiable measure of them when they are successful. The development of KPIs using the OGSM method will take time, and should be thought of as an iterative process.
As you work to develop KPIs with various stakeholders across the business, you will gain a better understanding of which business strategies and processes need to be measured with a KPI dashboard and how that information should be gathered and shared. Check out the OGSM template below which is designed to help you start developing your KPIs.
Objectives, Goals, Strategies and Measures (OGSM) Template
Value Stream Mapping Template
Value Stream Mapping is the process of graphically illustrating the movement of materials and information across suppliers to the organization and then to the customer. The purpose is to create a map of the current state of your organization’s supply chain to identify bottlenecks, inefficiencies, or buildup of inventory and take corrective action.
Value Stream Mapping usually involves a team of individuals who represent the different functions or areas of the process included on the map to collaborate with a facilitator experienced in creating value stream maps. The first step is to identify the set of products or services under consideration as well as bound the value stream, which typically starts with the supplier and ends with the consumer. A Value Stream can also include the entire supply chain, which would entail starting with any raw materials. Map out each process step to show the different stages a product goes through from inception to distribution to consumption.
Check out the Value Stream Mapping Template here to try the process out for yourself:
Value Stream Mapping Template
Theory of Constraints Template
Sometimes, a single challenge or obstacle can pose an existential crisis to an entire business. The Theory of Constraints is a methodological approach for isolating the most significant barrier or bottleneck in a process and then eliminating it in a systematic fashion through a series of straightforward steps.
The Theory of Constraints Template provides you with a mechanism to identify these barriers and a strategic approach to determining the best ways to eliminate those barriers.
Theory of Constraints Template
“5S” System Template
The 5 S System is an essential Lean efficiency process consisting of 5 steps that are based on the following Japanese terms:
- Seiri – Sort
- Seiton – Set
- Seiso – Shine
- Seiketsu – Standardize
- Shitsuke – Sustain
The purpose of the process is to ensure the physical space a business occupies remains well-organized, easy to navigate, and conducive to productivity. Each “S” represents a different step towards creating a safe, efficient, and clean work area, which helps increase employee satisfaction and quality and value for customers.
A basic overview of each of the 5 steps is provided below:
This step involves going through all of the resources in a workspace and clear out the old and unnecessary equipment, materials, etc. to reduce clutter. Individuals who work in the space are the most likely to know what supplies and equipment are necessary or not, and tagging each item based on its frequency of use helps determine what is needed. Items that receive a red tag are deemed unnecessary and are placed aside for removal. Those items whose function isn’t immediately clear can be held for review at a specified time.
Set is the process of determining what the most orderly configuration is for the equipment, supplies and materials that were kept in the workspace. The tasks that are conducted in each space can help clarify what the most ergonomic layout should be. For lean purposes, Set should be used to identify ways in which greater physical organization and consolidation can reduce wait time and travel for customers.
The essence of Shine is to ensure the workspace is always clean and that the tools and equipment are properly maintained. Cleaning frequently is necessary to ensure a comfortable and healthy working environment, and by encouraging everyone to take responsibility for doing their part, it becomes a standard practice. Ensuring equipment is always ready to use reduces unanticipated defects interrupting workflow.
Once the first three steps are accomplished, Standardize is the step that formalizes all of the various tasks necessary to keep the workspace organized and clean on a consistent basis. Creating schedules, routines, assignments, instructions, labels, and visual aids to ensure proper storage of supplies creates an accountable system in which employees take ownership over the maintenance of the workspace.
The final step, Sustain, is about ensuring adherence to the 5S System in the long-term, maintaining and continuously improving upon the processes developed over the course of the 5 steps. Encouraging participation, buy-in, conducting regular audits, and identifying root causes of issues are mechanisms for fostering ongoing commitment to organizational efficiency.
The “5S” System helps ensure the physical space of a business is organized, easy to navigate, and conductive to collaboration and productivity. You can download the 5-S Lean System here.
5S System Template
Kaizen is a general continuous improvement philosophy that seeks to eliminate waste, inefficiency, and improve quality and productivity on an incremental basis. It is found within a wide variety of process improvement methods at the organizational, team, and individual level.
Description of Kaizen
Implementing Kaizen helps foster a culture of continuous improvement and encourages employees to take ownership over their work processes. This helps individuals to become more efficient and empowered, and it helps teams to stay open to new ideas and identify ways of collaborating more effectively. Particular areas of focus in Kaizen include eliminating:
- excess movement (e.g., asking people to travel unnecessarily)
- wasted time (e.g., maintaining a poor system for organizing files online, thereby requiring individuals to spend too much time searching for documents)
- defects in work quality (e.g., writing a report without conducting sufficient research for it)
- over-processing (e.g., spending time on something that is unnecessary)
At the enterprise level, implementing Kaizen has a myriad benefits, including improved efficiency, quality, productivity, employee and customer satisfaction, cost savings, and reductions in inventory. One of the keys to its success must be in sustaining the changes that are implemented and not reverting back to old ways of operating. Learn more by reading about our online Kaizen tools and templates.
Huddle Board Template
A Huddle Board is a tool for visualizing the work and workflow of a team or organization. Huddle Boards are most often physical boards like a whiteboard which include “cards” or “post its” to show status, progress and issues related to a project or business initiative. Typical huddle boards track various metrics such as safety, quality, delivery, costs, budgets, inventory, team recognition, or anything else important for teams to monitor on an ongoing basis.
Huddle Boards first gained widespread use in the healthcare industry. Teams would “huddle” together each day for a few minutes and determine their most important tasks, and then team members would go execute. The power of Huddle Boards lie in their visual simplicity.
Huddle Boards resemble “Kanban” boards in that they help teams plot out different activities or ongoing project tasks, usually across different phases of their development. For example, a board might contain several columns organized by process step like things to do, things being done, and things completed. Or, you might simple create columns for process steps, like step 1, 2, 3, etc.
Huddle Boards don’t have to be organized around processes. They can also serve as living dashboards for teams and organizations. Some Huddle Boards might contain daily or monthly goals, along with progress reports like graphs or pie charts. However they’re structured, their purpose is the same: instantly align people around a shared purpose to coordinate and accelerate action.
Here’s what the Huddle Board Template looks like in PPT and Excel:
Huddle Board Template
Business Process Reengineering Template
Business Process Reengineering (BPR) entails reimagining and redesigning a company’s essential business processes, systems, and structures in order to increase value for customers.
An intensive change management process, implementing BPR indicates that the company is making a radical departure from stagnant operating methods, in part by introducing new technologies, to drive rapid and significant improvement in customer service.
Create your own Business Process Reengineering plan using the template here:
Business Process Reengineering Template
House of Quality Matrix
How do you make sure that your focus on customer needs aligns with the business realities associated with manufacturing and design processes?
House of Quality is an integral part of Quality Function Deployment and consists of a planning process and matrix tool (resembling a house) that places customer needs and desires side-by-side with product manufacturing and design elements, in order to illustrate the extent to which product development is based on the voice of the customer.
House of Quality enables a company to evaluate and ensure that the design and quality of its products are strongly aligned with the needs of its customers. Not only does the process help to clarify customer desires, it also ensures that the company’s value proposition is based, in part, on the ability to engineer its products according to customer need and demand. Using a House of Quality matrix to identify how each customer need is correlated with a product’s manufacturing requirements allows a company to pinpoint and prioritize design elements that can be updated to further customize and enhance its products and brand image.
The House of Quality Template has been made available below in an Excel format for you to use:
House of Quality Template
Outsourcing Decision Matrix
An Outsourcing Decision Matrix is a tool used to identify which business processes and operations are worth outsourcing, with the goal of reducing costs, creating efficiency, and deploying more resources towards innovation.
Using an Outsourcing Decision Matrix is vital for identifying the strategic importance of your business’s processes and activities and determining the best approach for conducting each one. The matrix is a 2×2 chart, with the X-axis based on overall contribution to the company’s operational performance, and the Y-axis based on strategic value. Activities that are high in value both strategically and operationally should be kept in-house, as those are essential to the company’s performance and competitive advantage.
Activities that are high in strategic value but lower in operational importance might benefit from a strategic alliance, where the activity is shared with a trusted partner that has the competency to effectively execute the activity and can take on some of the overhead cost.
Business processes that are high in operational importance but low in strategic value are those that are prime candidates for outsourcing. While they are still important activities that are critical for the business’s daily functioning, they are not essential to the company’s competitive advantage and pose minimal risk to outsource.
Activities that are low in both strategic and operational value should be considered for elimination altogether, as every business process should have a purpose that ties directly to customer value. Using the matrix is a helpful starting point, however it will be necessary to apply in-depth understanding of the business and its external environment to determine whether outsourcing will be truly beneficial.
Here’s the free Outsourcing Decision Template you can download in PPT:
Outsourcing Decisions Template
RATER Model Template
The RATER Model is a tool for evaluating the quality of your company’s services. It is an acronym that stands for Reliability, Assurance, Tangibles, Empathy, and Responsiveness, each of which is a different dimension against which the quality of your service provision is assessed.
Using a RATER Model is a helpful method for identifying where there are gaps in service provision that must be addressed. A brief overview of some of the key considerations for each dimension is provided below.
This measures the extent to which your company can dependably and consistently deliver its services as promised.
Assurance refers to the skills, competencies, and knowledge of staff to assist customers competently as well as their ability to inspire trust and confidence in customers.
Tangibles refer to the physical characteristics of your stores, products, services, and marketing materials, ensuring that they are attractive and high quality.
Empathy refers to staff’s ability to build positive relationships with customers and demonstrate empathy and understanding of their needs.
Responsiveness refers to your company’s ability to provide prompt service to customers.
Conducting a gap analysis across all five dimensions can reveal the current state of the organization, its desired future state, as well as needed action steps to improve performance where necessary.
Here’s the RATER Model Template we created to help you conduct this gap analysis:
RATER Model Template
How can you improve operations management in your organization?
Operations management is a multifaceted and complex topic. There is no easy way to ensure that your business runs smoothly and efficiently, and at the end of the day the process of operations management requires continuous changes and tweaks.
Whether you are a CEO looking to keep an eye on high level metrics and KPIs within your organization, or you’re the head of a manufacturing division trying to drive more efficient operations across your team, creating the right operations management dashboard can give you a scalable solution for driving innovation.