The act of building or providing service to the customer in business is known as production. Your traditional thinking is a plant producing widgets, but there is more to it than just this vision. There are work schedules, inventory control, and delivery. All of these are essential to the final customer smile.
One of the basic business concepts is range of production. It means maximizing the capacity (range) of the assets in your operation. When the business operation goes beyond the maximum production range, costs associated with the marginal production generally exceed the revenue generated with the marginal increase. To maximize profit in any business, operate within your range of production.
The primary goal of the Human Resources Department is to match the best person to the job in the company. This maximizes both effectiveness and efficiency for the company. In order to achieve the best matching of resources to the positions in the company, the human resources director should develop a position profile. This profile identifies the job title, describes the job in detail, pinpoints the best hours of work, defines the duties, and sets out the skills needed to perform the job.
In every business no matter production or service, there exists a bottleneck. Your job as the owner or manager is to find it and fix the problem. Once this one is found and resolved; move onto the next one. There is always a bottleneck to find and fix. What is important is to find the problem, identify the core issue, and then resolve the bottleneck. This may sound simply, but it takes someone in a position of knowledge and experience to complete this task.
What I learned was that equipment didn’t call in sick, it didn’t back talk me, it never got upset about how much it was paid and it just kept on humming. It was making us money and I didn’t have to deal with personnel issues. Boy, if only all production could be like this. Turn it on and make money.
All the rest of the business issues I write about mean zilch unless you have great production. This is the one area that you as the business owner need to devote your energy towards over any other.
