Business Optimization

Business Optimization

Business Optimization Jonathan Poland

Business optimization is the ongoing process of evaluating the efficiency, productivity, and performance of a business and identifying ways to improve those metrics. It is a fundamental management technique that involves a continuous cycle of measurement, improvement, and measurement. By regularly assessing and improving key performance indicators, businesses can optimize their operations and increase their overall effectiveness. The following are illustrative examples.

Processes

A company improves the turnaround time of order picking by reorganizing distribution centers to place items that are commonly ordered together in close proximity.

Procedures

A train company develops procedures to improve the safety of its platforms and reduce the risk of delays. For example, employees are trained to identify anyone who may require assistance getting on the train. Each month the company reviews delays due to station platform issues and tunes procedures to avoid similar delays in future.

Automation

High performance elevators are designed to learn traffic patterns by time of day and optimize themselves. For example, elevators may learn that restaurant floors at the top of a particular building are busy after 7 pm and position elevators appropriately.

Products

A product development team for chain of coffee shops tests dozens of new dessert items every month at one to five locations. Desserts that sell unusually well are released across a region.

Quality

A production line that produces child car seats performs quality control tests on every unit. When a unit fails, an investigation is performed to investigate and fix the root cause. This optimizes for quality by immediately addressing problems with machines, materials, parts and processes.

Customer Satisfaction

A call center measures customer satisfaction frequently by asking customers for feedback after service. The firm continually optimizes for better ratings with techniques such as incentives for employees that achieve high customer satisfaction. The company also continually improves its team culture, systems, knowledge base and training all with an aim to improve customer satisfaction.

Costs

A solar panel manufacturer needs to reduce unit costs on a regular basis to stay competitive with other producers in the industry. They optimize a large number of variables that contribute to cost such as the energy efficiency of factories or the utilization rate of expensive machines.

Marketing

A marketing team experiments with different pricing strategies to find prices and promotions that are optimal for a given product, location and customer.

Sustainability

A manufacturer that is committed to sustainability measures the resource consumption and waste produced by its operations and continually optimizes to move towards zero waste.

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