Operations Director Glossary
Bench marking – A common business method used to compare a business practice in one company to that of another. Often used when looking for competitive or cost control advantage.
Business Analytics - A technique used to review and evaluate business information (data) to assist in making business decisions or ensuring processes are conforming to requirements.
Business Continuity Plan (BCP) – A method whereby an organisation puts together an action plan that would be used should some disaster occur e.g. total systems failure etc.
Cause and Effect – A diagram that is used to analyse elements of a specific problem and displays them in graphical detail. This type of diagram is often referred to as a “Ishikawa Diagram”.
Change Management – A process used when looking to control the migration from one process to another.
Continuous Improvement – This is where you add new processes or procedures to your business that can enhance its effectiveness and/or reduce waste.
Cost of Quality – If you do not do something in business right the first time then it’s a cost to the business whether it be in man hours or physical product. It has been estimated that this can cost businesses up to 30% of their operational costs.
Customer Relationship Management (CRM) – The concept looks to “put the customer first”. CRM is where intelligence about the customer is collated and used to gain competitive advantage, obtaining new customers and retaining existing ones.
Customer Focus – The concept of looking to the wants and needs of the customer and reacting to it in order to create a positive customer experience.
Cycle Time – The time it takes to perform a process. The shorter you can get a cycle time to, the more efficient your business becomes.
Dashboard – This is a tool used by senior management. It contains key performance measures of a company that are usually graphically depicted. These measure are presented in such a way that it is seen to be similar to a dashboard on a car.
E-Commerce – The electronic trading of a business using tools such as email but more predominantly the Internet.
Enterprise Resource Planning (ERP) – These are mostly software packages. The “package” is used for all business functions so that all business transactions are recorded within one system and does not rely on interfaces.
Gap Analysis – Simply looks at gaps within a business where there is “something” missing between the creation of a service or product and the end customer.
ISO9001:2000 – A quality system that looks at ensuring a certain standard of business practice based on set clauses within the standard. It also promotes continuous improvement.
Just-In-Time – A concept where a process optimises the flow of inventory in a production process. It is a “pull” system, so when replenishment is required it “pulls” the inventory just in time to meet productions requirements. Often used in car manufacturing.
Kaizen – A concept that promotes continuous improvement within a business.
Kanban – Often used in the JIT process. In Japanese it simply means “signal”. Usually it is a signal used in production to indicate the replenishment of stock. It is used to ensure smooth flow of a production and to reduce bottlenecks.
Key Performance Measures (KPM or KPI) – Measures that a deemed important to a business where stabilisation, improvement or fault prevention can be monitored.
Lean Business – This looks at reducing and eventually eliminating waste from a process. Operational Cost – The cost of running the business. The key to business is to ensure operational cost is less than gross profit.
Process Management – This looks to reconfigure a current process to an improved state.
Quality Improvement – A general term used to when referring to any general business
Six Sigma – The ultimate objective of the Six Sigma theory is to eliminate defects and variability. In order to achieve Six Sigma a business has to have an error rate of a process to be no more than 3.4 defects per million opportunities. e.g. for every million packets of product sold, only 3 of these can be picked incorrectly in the warehouse in order to achieve Six Sigma standard.
SWOT Analysis – Strength, weakness, opportunity and threat analysis of a situation. Often depicted in four separate boxes and is an easy way to analyse a business situation.
Total Quality Management (TQM) – Often used when referring to a company that has adopted a process of continuous improvement.
Why, Why, Why, Why, Why – When analysing a situation or if you wish to delve deeper into a situation, based on Toyotas Kaizen approach you should ask “why” five times when asking about a business problem. This can help drill down to the real issue.
Zero Defects – Quite simply this is to achieve a process performance that is “perfect”.