According to Wikipedia, the free encyclopedia:
“Management consulting (sometimes also called strategy consulting) refers to both the practice of helping companies to improve performance through analysis of existing business problems and development of future plans, as well as to the industry composed of firms that specialize in this sort of consulting.
Management consulting may involve the identification and cross-fertilization of best practices, analytical techniques, change management and coaching skills, technology implementations, strategy development or even the simple advantage of an outsider's perspective. Management consultants generally bring formal frameworks or methodologies to identify problems or suggest more effective or efficient ways of performing business tasks.”
Operational Management consulting as a sub-discipline of management consulting is focused on the development, installation and use of situation specific reporting and control systems to optimize profitability by eliminating or minimizing waste, loss and controllable inefficiencies in the operating environment.
A complete operational management control system will include:
Company Policies: Written documents that explicitly state the "rules" for operating and managing all aspects of the business.
Standard Operating Procedures - Written procedures that provide detailed instructions on the methods and steps to be followed to complete required tasks.
These documents will include:
- Forms
- Checklists
- Handbooks
- Standards Manuals
- Production/Preparation/Customer Service Procedures
- Accounting Manual
- Personnel Manual
Development and implementation of an Organizational structure – with detailed job descriptions and defined responsibilities and levels of authority.
What is the value of these control methods to the business? The Objectives of Operational Management Consulting are to:
1. Make more money-for the client company by increasing profitability and cash flow. How is this accomplished? By Decrease costs and Increase sales.
2. Provide more control over the business; especially the operational aspects by developing and implementing reporting and monitoring systems which generate:
Timely Information
Timely Reporting.
Benchmarking.
3. Improve the quality of life by reducing anxiety and providing more discretionary time.
Improved employee control.
Improved employee performance.
The end result of the process is a well run company which:
- Plans Long Range with a Five Years Qualitative and quantitative Profit Plan
- Has an annual operating budget that sets both qualitative and quantitative goals.
- Maintains high product and/or service quality with minimal rework, returns or customer complaints.
- Is Organizationally structured with individual operational profit centers.
- Produces and uses daily, weekly and monthly operational and financial flash reports.
- Produces P&L’s (at least) monthly and conducts in-depth P&L reviews with all management personnel to analyze all budget variances and implements course corrections.
- Has a complete and detailed written set of accounting, operational, managerial and personnel procedures.
- Utilizes corporate assets effectively and efficiently.
- Is clean, neat and orderly.
- Is Organized in such a way as to have clearly-defined delineation of authority & responsibility at all levels.
- Has a compensation program based on “pay for performance”.
- Has a motivated, trained staff earning above average incomes.
- The Well Run Company Operates without crisis!
If you would like to learn more about Operational Management Consulting and how it can help you reduce costs, develop revenue, increase profitability, and improve your control of your business, contact us for a free consultation.
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