Importance of Operations Management in Business Organizations

Operations management is the process that generally plans, controls and supervises
manufacturing and production processes and service delivery.

Operations management involves overseeing business activities to attain objectives,

enhance productivity, and optimize profitability. It means planning, organizing, and
supervising operations, manufacturing and production processes, and delivering
services throughout a product’s life cycle. Managing the entire production cycle
should make sure the creation of high-quality products or services to meet customer
needs. In short, Operations management is an important branch of management
which ensures business success and profitability.

Importance of Operations Management

Operations management is important in a business organization because it helps

effectively manage, control and supervise goods, services and people.

It cuts across the sector and industry. In the health sector, operations management
ensures proper health delivery with the right instruments at the right time. It also
helps people like nurses and doctors deliver timely service. A technical savvy
individual knows what is at fault when something goes missing.

For a production or manufacturing company to be successful, OM must first stand.

Take an oil and gas company’s product discharged by ship to the reservoirs to make
it available for a large customer. OM sees to the delivery of the products and
schedules its execution. With OM, people achieve more, and productivity is
increased.

Operations management is widely used irrespective of company size or what they

do.
Benefits of Operations Management

1. Product Quality

The operations management is the first unit in a typical firm that checks a product’s
durability and reliability. Operations management deals with the quality of products
or goods which would suit customers on and after delivery. When a product is of
quality, it gives you an edge compared to your competitors.

2. Productivity

Productivity is the ratio of input to output and is the only way to verify employees’
input. Operations management ensures appropriate staffing of employees to
resources to get maximum results. The only way to ensure productivity is through
effective operations management.

3. Customer Satisfaction

There is no feeling for a manager or an employee as a customer getting the utmost

satisfaction. Operations management rightly ensures this is coupled with a quality
product. Customers make organization thrive, and they must be treated well in every
way necessary and possible.

4. Reduced Operating Cost

Through productivity, quality products and customer satisfaction, cost incurred on

product servicing is maximally reduced. This simultaneously leads to increased
revenue. Only operations management can make this possible. In reducing operating
costs, there is also waste reduction. The exact number/size of products is produced
as requested via proper operations management.
ROLE OF OPERATIONS MANAGEMENT IN CORPORATE
PROFITABILITY

1 Product Quality –The quality of a product refers to its capability of

meeting or exceeding a customer’s expectations. Operations management
ensures that products meet the quality standards and offers opportunities to
identify areas where quality can be improved. One of the main functions
of operations management ensures that products are designed to be reliable and
durable to meet customer’s expectations of quality over quantity.

2 Customer Satisfaction – Customer satisfaction is essential for any

manufacturing operation as it ensures future business from your current
customers. While operations management takes care of creating products and
services of high quality, it also ensures that customer needs are met. When your
operations are running smoothly, it will allow you to deliver your products on time
to your customers and increase their satisfaction.

3 Revenue Increase –Increased product quality and consumer satisfaction will give
your company to have a good reputation within the industry. This reputation will
further aid your company to attract more customers and expand its market share

4 Waste Reduction –Waste reduction is one of the most important

components of operations management. Various techniques can be used
to identify and eliminate waste within manufacturing operations, such as
lean manufacturing strategies and JIT scheduling to manage inventory costs.
Eliminating waste within your operation will allow you to increase profits
by eliminating unnecessary costs and ultimately improving the overall production
process with in the operation.

5 Collaboration – Adequately implementing operations management strategies

require collaboration between many individuals at all levels of the
organization. Many business strategies involved in operations management
include supply chain configuration, sales, capacity to hold money ,and optimal
utilization of human resources.

CORPORATES GAIN COMPETITIVE ADVANTAGE BYUSING

OPERATIONS MANAGEMENT

Competitive advantage requires the creation of a system that has a unique advantage
over competitors. The main goal is to create customer value and experience in an
efficient and sustainable way. Implementing operations management strategies that
compete on differentiation, low cost and response are usually the best catalysts in
achieving competitive advantage. Differentiation is more concerned about providing
unique and innovative products, it should be regarded as going beyond products and
service attributes to encompass everything that positively influences the value that
customers derive from it. This idea of differentiation creates customer experience as
it serves as a bridge to engage customers. Low cost: Low-cost leadership is about
achieving maximum value from your customers’ viewpoint. This strategy requires
an in-depth analysis of the 10 operations management decisions in an effort to drive
down operations cost while at the same time meeting customers’ expectations. The
ten operations managements decisions consist of: Product Quality, Process,
Location, Layout, Human Resources, Supply chain, Inventory Scheduling,
Maintenance.

What is operations strategy?

An operations strategy refers to the system an organization implements to achieve

its long-term goals and mission. It involves decisions based on multiple factors,
including product management, supply chain, inventory, forecasting, scheduling,
quality, and facilities planning and management. For service providers, operations
strategy concerns financing, marketing, human resources, and service that matches
the company’s goal and mission.

5 types of operations strategies

There are five different types of operations strategies that can be used based on a
company’s business model and long-term goals. They are outlined below, along with
a few details about how these strategies are put into place.

1. Core competency strategies: This strategy involves identifying the core

business practices within your company that can leverage existing strength to
maximize profitability. If your company has established a reputation for
providing high-quality goods and services that are consistent, this core
competency could remain a long-term strategy that ensures sustainable
growth.
2. Corporate strategies: This strategy is most concerned with your company’s
mission statement and involves developing production initiatives, key
performance indicators (KPIs), and decision-making processes that will help
reach the desired mission. Your teams will then work to implement these
initiatives and processes, which can be measured and analyzed for necessary
changes that should take place.
3. Competitive strategies: This strategy involves distinguishing your business
from others in the same space, and requires consideration of what your
competitors are doing. Your strategy would then consist of finding
quantifiable ways to differentiate your business and set it apart from the rest.
4. Product or service strategies: This strategy requires focus on quality control
of existing products or services, as well as development of new offerings.
Product managers have a key role to play in this approach.
5. Customer-driven strategies: This strategy is all about the customer’s
experience, and all operational decisions are determined by looking at it. Your
sales and marketing will likely drive this strategy, which involves engaging
your customers and altering your strategy based on their feedback

How an effective operations strategy can positively impact your project

Michael Porter, professor and director of the Institute for Strategy and
Competitiveness at Harvard Business School, wrote, “The essence of strategy is
choosing what not to do.” An effective and successful operations strategy must
consider the strengths and opportunities of the business but also fully accept the
limitations and challenges it faces.
Putting together an operational plan can help you define company goals and create
a detailed outline for how each employee, team, or department contributes to them.
If your business strategy is well executed, this operational plan can be fine-tuned
over time to factor in changes that might occur along the way.

Your operations strategy is a vital component to the health of your business, and
should be a consistently evolving mechanism to sharpen your company’s focus and
drive growth.

Methods for applying business strategies

Some methods through which you can apply business and operational strategies
include:

• Value chain analysis: You can use this to evaluate every step in a value
chain to determine which steps add or subtract value from a final product. It
can help you apply business strategies and improve competitive advantage
through cost reduction and product differentiation.
• Activity-based costing: This method assigns overhead and indirect costs to
products and services, offering a more detailed picture of a business's cost and
a more effective pricing strategy. This expands the basis for assigning
overhead costs and changes the nature of indirect costs such as utilities and
salaries, making them traceable to specific activities.
• Benchmarking: This involves the measurement of key business metrics and
comparing them with those of competitors, industry peers, or companies in
other markets. This ranges from internal, external, performance, and practice
benchmarking and helps a business identify areas for improvement.
• Performance measurement methods: This method of applying business
strategies varies across business types, work environments, job titles, and
occupations. It measures the performance of a business and its employees
while determining compliance with company values and profitability.

8 types of Operational strategies

Here are some common examples of operational strategies businesses use to improve
resource management and competitive advantage:

Corporate strategy

A business's corporate strategy is the most significant of its strategies as it

encompasses its corporate goals, mission, and vision. This strategy also allocates
resources and quarterly targets among departments to help achieve the business's
overall aims. It unites every aspect of a business towards realizing common and well-
defined objectives. This is an ongoing strategy that ensures a business is of greater
value as a whole than in parts. It's important to constantly revisit it to improve
innovation and deliver value to consumers. This involves portfolio strategies,
expansion strategies, corporate policies, and long-term goals that motivate
employees and attract investors.

Core competencies strategy

This strategy involves a business recognizing and vastly improving its strengths,
resources, and capabilities to attain a sustainable competitive advantage. A
business's core competencies include its technical superiority, financial position,
customer relationship management, distribution system, market share, and efficient
processes. This strategy focuses on areas of strength to increase a business's
expertise and applies this expertise in other markets while adding value to the
consumers.

Recognizing a business' core competencies can also reduce the cost of production,
improve revenue generation, attract skilled employees, and promote relationships
with investors. For example, an entertainment company with core competencies in
its animations, unique storytelling, and theme park operations benefits from
promoting its unique services to clients within the industry. In identifying your core
competencies, ensure that the competencies are unique and specialized to increase
business appeal to customers.

Competitive priorities strategies

A business employs competitive priorities strategies to distinguish its services,

brands, personnel, and products from competitors. This involves the dimensions a
business's system of production incorporates to meet the demands made by its target
market. This strategy depends on a business's overall corporate strategy and
incorporates its marketing strategy, production processes, and business culture.

In developing effective competitive priorities, businesses combine factors, such as

flexibility, cost, quality, and delivery of products and services. They can also
evaluate the features of products and offer variety to distinguish them from products
and services offered by competitors. This helps expand their customer base and
provide services and products that cater to customers' needs at competitive prices.

Customer-driven strategy
The essence of this strategy is the realization of sustainable profits by attracting and
retaining customers. It concerns satisfying the needs of existing and potential
customers within the target market. A customer-driven strategy seeks to build
customer loyalty, monitor a business's net promoter score, manage customer
feedback, and foster employee branding.

This approach involves recognizing trends in customers' behaviour, such as changes

in purchasing preferences within a demographic. Monitoring such trends help
businesses adapt to changes by meeting new demands and mitigating threats to
market position. This also helps businesses leverage areas of core competence that
improve their profitability and competitive advantage.

Market penetration strategy

Market penetration strategies help businesses acquire increased influence in a market

where they have an existing customer base. An effective strategy incorporates data
from market analysis and competitor analysis to identify prospective customers and
how to reach them. The goal is to increase the percentage of the total market
population that purchases business goods or services through actionable steps.

These steps can take the form of directing a business's focus to non-buying, new,
niche, or reserved portions of the market. For example, a software company targeting
business email management can exist in a highly competitive market with similar
products. It's helpful for such a company to direct its resources to a niche market
instead of competing for existing customers. In other cases, it can also offer
competitive prices to customers without brand loyalty.

Supply chain strategy

Supply chain strategies help businesses move their products and services from
manufacturers or suppliers to distributors and consumers. These strategies involve
the maximization of profit through the flow of data, services, and products between
stages of a supply chain. In maximizing value, these strategies also address sourcing
raw materials, customer services, marketing, financing, and product development.

A supply chain strategy is profitable when the total supply chain costs are lower than
the total revenue generated from consumer purchases. Selecting locations with high
capacity to preserve products and reliable means of transportation are choices that
influence supply chain costs. It's also important to consider market uncertainty when
developing supply chain strategies as they're sometimes expensive to reverse.
 Product development strategy

Product development strategy refers to a set of practices businesses use to improve

existing products or introduce new products to a market. These strategies incorporate
every stage of product development, from product innovation to the delivery of
products to the final consumers. These strategies also improve the quality of
products and services by considering the data market research provides.

A strong strategy offers the opportunity to turn ideas into profitable products, then
improve on them to remain competitive. Businesses develop their product by
increasing product value, customizing features, offering trial periods, and finding
niche markets. It's most effective to consider how various approaches contribute to
the strategy and improve them based on data and experience.

Cost-driven strategies

These strategies inform a business's decision to base the price of its product on the
cost of its production rather than factors outside production, such as policies, power,
and communication. These strategies are common in stable markets or markets
where prices rather than alternatives influence the purchasing behavior of customer
bases. Competing in such markets requires that a business is highly cost-effective in
its production process to offer competitive prices to consumers. For example, it's
common for people to buy staples such as sugar, spice, flour, and salt based on their
prices, as most brands offer similar products.

What is a Manufacturing System?

In today's fast-paced and ever-changing world, manufacturing plays a vital role in

the economy. A manufacturing system is a collection of machines, tools, and
processes that are used to produce goods or services. It typically includes the steps
of raw materials acquisition, processing, assembly, and distribution.

A manufacturing system must have three basic components:

1. Inputs – raw materials or parts that will be used in the manufacturing process
2. Processes – the methods and techniques used to transform the inputs into the
desired output
3. Outputs – the products or services that are created as a result of the manufacturing
process
 The goal of any manufacturing system is to produce outputs of the highest quality,
at the lowest cost, and in the shortest amount of time possible. In order to achieve
this, manufacturers must constantly strive to improve their processes and equipment.

What is its Importance?

Manufacturing systems are important because they provide the means by which
products are created. Without manufacturing systems, it would be difficult to
produce the vast array of goods that we have come to rely on in our everyday lives.
From the simplest of products to the most complex, manufacturing systems play a
vital role in their creation.
Moreover, manufacturing systems are constantly evolving and improving. As new
technologies are developed, they are often incorporated into manufacturing systems
to improve efficiency and quality. This ongoing process of improvement ensures that
the products we rely on are constantly getting better.

What is its Function?

The manufacturing system is responsible for the production of goods and materials.
It is a complex system that involves the coordination of resources, machines, and
workers in order to produce finished products. The manufacturing system is an
essential part of any economy and plays a vital role in the production of consumer
goods and services.
A well-functioning manufacturing system is important for a variety of reasons, such
as:
• Ensure that products are of high quality and meet customer expectations
• Improve efficiency and productivity, leading to lower costs and increased profits
• Help create jobs and support economic growth

What are the Characteristics of a Manufacturing System?

The characteristics of a manufacturing system include:

• Efficiency – The manufacturing system must be designed to produce products or
services quickly and efficiently.
• Flexibility – It must be able to accommodate changes in demand and produce
different products or services as needed.
• Quality – It must make products or services that meet the required standards.
• Safety – It must be designed to protect workers from injuries and hazards.
• Cost-effectiveness – The manufacturing system must be designed to create
products or services at a low cost.

Types of Manufacturing Systems

There are various manufacturing systems, each with its purpose and importance. The
five major types include the following:

Mass Customization

This is the most efficient type of manufacturing system, as it uses assembly lines to
produce large quantities of products quickly and cheaply. However, mass production
is not well suited for products that require customization or have a lot of variation.

Custom Manufacturing System

A custom manufacturing system is designed to produce a specific product or set of

products. This type of system is usually used when products are not mass-produced
and require special attention during production. One good example of these is
handmade furniture and wedding cakes.

Flexible Manufacturing System

A flexible manufacturing system (FMS) is a type of manufacturing system that is

able to quickly change between different product types or sizes. This type of system
is characterized by its use of automated equipment and computer-controlled robots.

Continuous Manufacturing System

 A continuous manufacturing system is also known as mass manufacture. It is a
process of manufacturing in which processes and assembly are continuously
performed during an operation at one station instead of stopping and starting the
process.
In this continuous manufacturing method, there is no storehouse (raw material)
needed. The material would come from one place or another process and go into the
next phase immediately without being stored between steps.

Intermittent Manufacturing System

Also known as batch processing, an Intermittent manufacturing system is a type of

manufacturing process where products are produced in small batches. This type of
process is characterized by its ability to produce a variety of products, its reliance on
human workers, and its limited level of automation. A perfect example for this is
clothing production.

What is the Manufacturing Process?

The manufacturing process is the set of steps that are followed to transform raw
materials into finished products. It can be a complex and detailed process, depending
on the product being made.
In general, the manufacturing process can be divided into four main steps:
• Planning and design – This step involves creating blueprints or plans for the
product, choosing the right materials, and determining the production process.
• Raw materials – This is the gathering of the raw materials needed for production.
This can involve sourcing materials from suppliers, stocking up on supplies, or both.
• Production – Once the design and raw materials have been finished and collected,
the production stage will take place to produce the product.
• Quality control – This involves inspection of the product to adhere to the
customer’s standards. It is where any defect is checked to ensure quality products
are made for the consumers

Difference between Manufacturing and Service Operations

 Businesses that manufacture goods or products by utilizing labor, machinery, and
raw materials are manufacturing concerns. Factory, plant, or workshop that
produces consumer goods or industrial materials can be included here.

Creating jobs and driving economic growth are important functions of

manufacturing concerns in the global economy. Manufacturing concerns face
challenges such as rising raw material costs, competition from other companies,
and staying up-to-date with new technologies.

Businesses that provide services to their customers are called service-concern

businesses. Among the businesses that fall into the category of service concern
are consulting firms, law firms, accounting firms, and healthcare providers.

As opposed to tangible goods, these businesses deliver value to their customers

through expertise, knowledge, and skills.

Differences between Manufacturing Operations and Service Operations are

as follows:

S.No.
Manufacturing Operations Service Operations

Manufacturing operations produce a tangible Service Operations produce intangible

1. output (i.e.; which can be physically seen) output(i.e.; which cannot be physically seen)
from the conversion process. from the conversion process.

The output from the manufacturing

The output from the service operations is
2. operations can be consumed over a longer
consumed immediately.
period of time.

Manufacturing Operations are generally Service Operations are generally based on

based on capital-intensive techniques as they people-intensive techniques as they use more
3.
use more capital(i.e.; more use of machines machines and equipment than machines and
and equipment) and less labor. equipment.
 In service operations, there is a need to contact
In manufacturing Operations, there is no
customers frequently and a need for customer
4. need to contact customers frequently and no
participation as without customer contact no
need for customer participation.
service can be generated.

In order to measure the performance of the In order to measure the performance of the
5. manufacturing operations, sophisticated service operations, simple methods(fast and
methods are used. easier) are used.

Manufacturing operations cover a large area

Service Operations covers small areas as they
6. as they produce goods at the local level,
generally provide services for local people.
national level, or international level.

Manufacturing operations which include the Service operations are mainly knowledge and
7. production of goods and services are skill but sometimes technology is also required
generally technology-based. to produce services.
Here are some of the main differences between manufacturing and service
operations, including the processes, outputs, customer interactions, and
more. Below is a list of the most important differences between these two
types of operations:

Nature of Output:

• Manufacturing: Creates tangible, physical goods (e.g., cars, smartphones,

furniture).
• Service: Provides intangible services (for example, healthcare, banking,
and consulting).
Tangibility:

• Manufacturing: Produces physical goods with distinctive characteristics.

• Service: Provides intangible experiences to customers, often customized
for their specific needs.
Inventory:

• Manufacturing: Responsible for managing raw materials, work-in-

progress, and finished goods inventories.
• Service: No physical inventories are kept, but resource management and
scheduling may be involved.
Production Process:

• Manufacturing: Consists of a series of production steps, such as assembly

lines, machining, and quality control.
• Service: Customer interaction is often real-time, and the production
process is centered around people.
Customer Interaction:

• Manufacturing: Limited direct customer interaction during production, but

feedback can impact future product design.
• Service: Direct and continuous interaction with customers is common, and
customer satisfaction is immediate.
Quality Control:

• Manufacturing: Quality is primarily assessed through product inspections

and testing.
• Service: Quality is assessed based on customer satisfaction, feedback, and
service delivery.
Customization:

• Manufacturing: Customization is often limited to product variations,

which may require reconfiguration of production processes.
• Service: High degree of customization is possible, tailored to individual
customer preferences and needs.
Resource Allocation:

• Manufacturing: Resources allocation focuses on machinery, materials, and

production capacity.
• Service: Resources allocation includes personnel, time, and expertise.
Lead Time:

• Manufacturing: Lead times can be longer due to the production of physical

goods and supply chain considerations.
• Service: Generally shorter lead times, with services often delivered in real-
time or scheduled appointments.
Quality Measurement:

• Manufacturing: Quality is typically measured using standards and

specifications.
 • Service: Quality is measured by customer satisfaction, feedback, and
meeting service expectations.
Maintenance and Repairs:

• Manufacturing: Involves maintenance and repair of machinery and

equipment.
• Service: May require ongoing maintenance but is primarily focused on
delivering consistent service quality.
Cost Structure:

• Manufacturing: Cost structure includes materials, labor, machinery, and

production overhead.
• Service: Cost structure involves labor, training, facilities, and technology
infrastructure.
Scalability:

• Manufacturing: Scaling up production can be capital-intensive and time-

consuming.
• Service: Scaling up services often involves hiring and training more
personnel, making it relatively flexible.
Environmental Impact:

• Manufacturing: Often has a more significant environmental footprint due

to material usage and production processes.
• Service: Generally has a lower environmental impact, although it depends
on the specific service.

Regulatory Compliance:

• Manufacturing: Subject to industry-specific regulations and product

standards.
• Service: Subject to service industry regulations and standards, which vary
by sector.
These differences highlight the unique characteristics and challenges associated
with manufacturing and service operations, and businesses in each sector need to
tailor their strategies and processes accordingly
What Is Aggregate Planning? (Plus Strategies and Tips)

Businesses implement a variety of strategies to save money, meet customer

expectations and generate revenue. Aggregate planning is one way for organizations
to match their production capacity to consumer demand. If you want to work in
business, manufacturing or a related industry, you may benefit from learning about
this framework.

What is aggregate planning?

Aggregate planning is the process of determining the scope of a company's

operations. It involves forecasting the potential demand for an organization's goods
or services and preparing the company to fulfill this demand. This process allows
business leaders to coordinate the right amount of resources to cover the demand
efficiently, without causing over or underproduction. It typically uses information
like sales goals, current levels of production, current inventory and client backlogs
to determine how to meet consumer demand at a minimum cost.

What is the purpose of aggregate planning?

Aggregate planning helps an organization optimize production processes and fulfill

its long-term goals. Some of its specific purposes include:

• Supporting employees: By creating a set schedule and an accurate forecast

for upcoming periods, managers can tell employees what to expect and
increase employee satisfaction and productivity.

• Reducing costs: Aggregate planning makes operations more efficient and

reduces the need to buy and store additional materials, decreasing a company's
overhead and operational costs.

• Improving efficiency: Planning operational strategies in advance can

ensure a company is using all production means and managing resources as
efficiently and responsibly as possible.

• Upholding customer satisfaction: If a company streamlines its processes, it

has the potential to provide enough supply to meet demand at all times, fulfill
consumer expectations and increase customer satisfaction.
 • Increasing production rates: By anticipating changes in customer demand
and planning ways to address those changes, companies can remain adaptable,
save time and increase the rate of production.

3 types of aggregate planning strategies

These are the three main planning strategies available for aggregate planning:

1. Level strategy

The main goal of the level strategy is to create an aggregate plan that keeps both
production and employment stable. This means that the organization invents creative
ways to address changes in customer demand, like modifying inventory levels based
on how demand may evolve in the near future. Companies can establish larger
inventories than necessary at a particular moment in time, anticipating future growth
in demand.

Alternatively, a company can use a backlog or back-order to delay delivery. In doing

this, a company promises to deliver its goods or services to clients at a specific time
in the future, ideally at a time when demand is lower. While keeping the workforce
at the same level, this strategy can increase a firm's inventory and backlog.

2. Chase strategy

When using the chase strategy, a company adjusts capacity to match demand
constantly. This strategy is complex, as it involves constant employee hires and
layoffs. It also requires the company's management to be highly flexible and ready
to adjust the overall strategy to match new information regarding future demand.
When an entity implements this technique properly, it can minimize the need for
inventory and reduce costs in some contexts.

3. Hybrid strategy

Many companies use a mix of the level and chase strategies to plan their production.
The exact way businesses implement the various parts of the two strategies greatly
depends on the nature of the organization and its production and demand
assessments. Executing a mixed strategy properly and being both prepared and
flexible tends to yield good results.
Tips for creating an aggregate plan

Here are several approaches for decreasing or increasing capacity to fulfill future
demand:

• Modify pricing. If the forecasted demand is lower than the company's

capacity to deliver its goods or services, a solution can be lowering prices to
grow demand until it matches the capacity.

• Delay delivery. Companies can postpone the delivery of existing orders

until a period of decreased demand. This is a common tactic among companies
that provide services and prefer to take reservations to avoid multiple clients
demanding those services at the same time and overwhelming the facility.

• Increase promotional activities. An organization can stimulate demand by

promoting its goods or services through advertising, marketing and other
similar channels.

• Create complementary demand. If demand for a certain product or service

is too high and a company can't fulfill it, the organization may create an
additional product or service to handle the surplus. For example, an
overcrowded restaurant may direct their customers to the bar until a table
opens up.

• Lay off employees or hire additional ones. If future demand could be

higher or lower than what the company can produce, companies can modify
the number of employees to balance supply and demand.

• Build up an inventory. Companies can use periods of low demand to foster

a large inventory and then use this stock during high-demand periods without
modifying the workforce.

• Require some employees to work overtime. By directing employees to

work overtime when necessary, you can increase the company's production
capacity temporarily to match projected increases in demand without the
expense of hiring new workers.

• Hire part-time workers. Part-time labor can be a flexible alternative to full-

time employment. It can be easier for business leaders to hire part-time
employees on an on-call or seasonal basis to cover for high-demand periods.
• Employ subcontractors. Contacting another company and hiring them to
provide a specific service can temporarily increase capacity if a period of high
demand occurs.

• Cross-train employees. Employees who perform multiple tasks can adjust

their work schedule to cover various aspects of production.