7 Ways to Master Your Operational Planning and Optimization
Reliable data
All worthwhile operational planning and optimization relies upon a rock-solid foundation of data. If you don’t have a platform in place to collect data on every aspect of your company that generates or consumes value, you can’t make an informed effort to improve. Before all else, establish that platform; acquire the tools to both gather that data and present it in a usable form, or your efforts can’t hope to meet with success.
Integrated planning
Proper operational planning demands a holistic approach which considers planning and optimization at every level of the company; what changes at the operational level influences tactics and strategies across the company. A failure to account for these ripple effects ultimately cripples most optimization efforts, leading to minimal improvements or even losses.
By approaching optimization and planning with budgets, long-term strategies, marketing tactics, and every other aspect of the company considered, you can achieve real, lasting gains. Without this level of integration, every effort can generate ripples of inconsistency which can shake the whole effort apart. This is why older methods of optimization — those dependent upon extrapolating from a single point — have historically underperformed. Take advantage of modern tools, and work with the whole picture in mind.
Understanding context
It’s not enough to look at a change and see how it will effect your company alone. In case you missed it, nothing exists in a vacuum — it’s important to understand how that change will position your company within the industry, against its nearest competitors, with public perception, etc. A failure to account for a wider context in your optimization efforts will result in short-sighted plans you’ll be forced to adjust and ‘optimizations’ which bring you nothing. Take context into account, and make efforts which will hold up to their real-world impact.
Evaluating value
To move forward with an optimization effort, you need a thorough understanding of what value different aspects of your operations hold. It’s easy to look at profit and expenditures and understand the superficial value of a project. However, it’s another thing entirely to access the goodwill improved customer interactions generate, or the benefits of maintaining legacy solutions for a dwindling consumer base. Acquire the data necessary, figure out how to interpret it usefully, and access value accurately across your operations. Only then can you really understand how a given effort will improve or weaken your company.
Consistent definitions
Nailing down your terminology and general understanding of the various systems, plans, tools, metrics, and other ideas associated with your operations is crucial to making your operational planning and optimization effort a success. Inconsistencies in how different teams understand terms, how they’re defined within your tools, how you talk about them at the highest and lowest levels, these all add up to inefficiency and inaccuracies moving forward. To have a useful discussion on how to improve your company, your people and tools all need to be speaking the same language.
Testable goals
Any operational planning and optimization effort aims to bring about certain goals, but vague goals are ultimately useless for the endeavor. To make your optimization efforts succeed, you need to define your goals in a manner you can test for; specific numbers you want to hit, based on your data and value evaluations. When you can see your company move closer to or further from its goals, you can make rational, reasoned decisions about how to progress.
Prescriptive analytics
When you build your operational planning and optimization on a foundation of prescriptive analytics, you’re building on a reliable, consistent platform for improving your company. By making data drive your decisions and determine how you proceed to enhance operational efficiency, you avoid the traditional pitfalls inherent to any optimization effort. You won’t cling to waste, won’t hesitate to invest in useful tools and improvements, and won’t make ill-advised ‘gut decisions’ with not true basis in the data.
Closing Remarks
These seven take-homes will open the door to successful operational planning and optimization, but they won't solve all of your problems. You’ll still need to put time and effort into refining your company to its greatest efficiency. Planning and optimization require reliable tools and a will to trust them; without that, these tips are useless to you.
