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.

Learn More
Sales Management Jonathan Poland

Sales Management

Sales management is the process of overseeing and directing an organization’s sales team. It involves setting sales goals, analyzing data,…

Sentiment Analysis Jonathan Poland

Sentiment Analysis

Sentiment analysis is the process of analyzing and extracting subjective information from text data. It is a type of natural…

What is Supply? Jonathan Poland

What is Supply?

Supply refers to the amount of a product or service that is available for purchase at a given price. In…

Positive Risk Jonathan Poland

Positive Risk

Positive risk refers to the potential for achieving an outcome that is too good. While risk is often associated with…

What is Achievement? Jonathan Poland

What is Achievement?

Achievements are the results of efforts that have produced positive outcomes. These outcomes can range from resounding successes to partial…

Labor Specialization Jonathan Poland

Labor Specialization

Specialization of labor involves dividing work into specific roles or tasks, with the goal of improving productivity, efficiency, quality, and…

Management Challenges Jonathan Poland

Management Challenges

Management challenges are obstacles, difficulties, or inefficiencies that make it difficult for managers to achieve their goals and objectives. These…

Economic Change Jonathan Poland

Economic Change

Economic change refers to shifts in economic conditions, such as changes in GDP, employment rates, and prices. These shifts can…

What are Field Services? Jonathan Poland

What are Field Services?

Field service involves managing and deploying resources and assets at customer, public, and third-party locations, as well as providing services…

Latest Thinking

Qualified Small Business Stock (QSBS) Jonathan Poland

Qualified Small Business Stock (QSBS)

Qualified Small Business Stock (QSBS) refers to a special classification of stock in the United States that offers significant tax…

Barrick Gold Jonathan Poland

Barrick Gold

Barrick Gold Corporation (NYSE: GOLD) is a significant player in the global economy, particularly within the gold mining industry. Its…

Newmont Corporation Jonathan Poland

Newmont Corporation

Newmont Corporation (NYSE: NEM), being the world’s largest gold mining corporation, with extensive operations in mining and production of not…

Gold is Money Jonathan Poland

Gold is Money

Overview The history of gold as money spans thousands of years and has played a pivotal role in the economic…

What is Leadership? Jonathan Poland

What is Leadership?

In the modern business world, where rapid changes, technological advancements, and global challenges are the norm, effective leadership is more…

Product Durability Jonathan Poland

Product Durability

A durable product, often referred to as a durable good, is a product that does not quickly wear out or,…

Durable Competitive Advantage Jonathan Poland

Durable Competitive Advantage

The most important aspect of durability is market fit. Unique super simple products or services that does change much if…

Praxeology Jonathan Poland

Praxeology

Praxeology is the study of human action, particularly as it pertains to decision-making and the pursuit of goals. The term…

Business Models Jonathan Poland

Business Models

Business models define how a company creates, delivers, and captures value. There are numerous business models, each tailored to specific…