Operational control
| Operational control |
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| See also |
Operational control is the process of checking if specific tasks or transactions are delivered in efficient and effective way. All activities might be measured in terms of input (resources) and output (consumes: goods, services, other effects). The goal of operational control is find optimal solution. Relation between input and output[1]:
- is measured objectively,
- is comparable,
- uses scientific standards,
- takes into consideration impact of all observed circumstances (such as quality of machinery, materials, new techniques etc.),
- might be presented as measurable ratio.
Practical use of the operational control
In practice, the optimal solution for the company is combination of input (out of many combinations of inputs) that creates output at the lowest cost with all established assumptions - it is often called programmed cost or engineered cost. Actions related to operational control will be these which has measurable, direct characteristics, for example[2]:
- manufacturing,
- scheduling job,
- controlling job,
- procuring items from inventory,
- controlling personnel,
- taking an interview.
Management functions of the operational control
Turner J. R. in the research divides operational control into four functions[3]:
- Client management (for example identify new clients),
- Input management (for example ensure resources and skills),
- Process management (for example contribution of resources to the process, delivery of components),
- Output management (for example managing hand-over to the client).
Steps of designing operational control
Designing operational controls might be covered in the following steps[4]:
- Defining objectives of operational controls,
- Selecting system that supports operational controls,
- Establishing key issues in designing operational controls,
- Designing controls with necessary characteristics,
- Establishing duties, responsibilities, conflicts of interest if any,
- Creating framework of operational controls implementation,
- Implementing operational controls,
- Analyzing reality with frameworks,
- Measuring of controls,
- Preparing controls checklist,
- Establishing operational controls process with corporate policies, procedures and plans.
Author: Jolanta Lesnicka
Examples of Operational control
- Quality Control: Quality control is a process of measuring and comparing a product’s performance against predetermined standards. It is used to identify defects and errors in order to improve the quality of the product and ensure customer satisfaction. Quality control includes activities such as inspection, testing, auditing, and tracking customer feedback.
- Inventory Control: Inventory control is the process of managing and monitoring the levels of inventory items or goods in an organization. It involves tracking inventory levels, determining when to order new stock, and ensuring that goods are stored safely and securely.
- Production Control: Production control is a type of operational control that involves managing the manufacturing process in order to ensure that goods are produced efficiently and cost-effectively. It involves planning, scheduling, and controlling the production process in order to meet customer demands.
- Cost Control: Cost control is a type of operational control that involves monitoring and controlling the costs associated with producing goods and services. It involves tracking costs, analyzing them, and identifying opportunities for cost reduction.
Advantages of Operational control
Operational control can provide many advantages. These include:
- Optimization of resources, which allows for the most efficient spending of resources such as time, energy, and money.
- Improved processes and operations with better quality control, allowing for better customer service and satisfaction.
- Improved communication and collaboration between departments, allowing for better coordination of tasks.
- Reduced risk of errors and increased productivity, which can lead to cost savings.
- Improved visibility into the performance of operations, allowing for better decision-making.
- Increased efficiency, leading to better results and outcomes.
Limitations of Operational control
Operational control has several limitations that should be taken into account:
- Operational control is limited in its ability to measure intangible outputs such as customer satisfaction or employee motivation. As such, it is not able to directly measure the success of a given process or its impact on the organization.
- Operational control relies heavily on data collection and analysis, which can be time consuming and costly.
- Operational control is limited in its ability to capture the complexity of certain operations and processes, as it is focused on measuring efficiency of individual tasks.
- Operational control is limited in its ability to account for changing conditions and unforeseen events which can impact operations.
- Operational control is limited to providing a snapshot of current performance and may not be able to predict future performance accurately.
One of the main approaches related to operational control is process improvement. Process improvement is a way of streamlining processes to make them more efficient, reduce costs, and improve customer service. Other approaches include:
- Quality Control: Quality control is a systematic approach to ensure that a product or service meets the required quality standards. Quality control can involve monitoring inputs and outputs, as well as the process itself, to detect and correct any inconsistencies.
- Risk Management: Risk management is a systematic approach to identify, assess, and manage potential risks. It involves assessing the probability and impact of potential risks, and determining the best strategies to manage them.
- Performance Management: Performance management is the process of monitoring, evaluating, and improving the performance of individuals, teams, and organizations. It includes setting goals, measuring performance, and providing feedback to help improve performance.
In summary, operational control is a process of ensuring that tasks and transactions are delivered in an efficient and effective way. Other approaches related to operational control include quality control, risk management, and performance management. These approaches help organizations to improve efficiency, reduce costs, and improve customer service.
Footnotes
References
- Bernstein E. S. (2012), The Transparency Paradox: A Role for Privacy in Organizational Learning and Operational Control in "Administrative Science Quarterly 57(2)"
- Ghosh N. (2005), Management control systems, PHI Learning Pvt. Ltd, New Delhi
- Kazmi (2008), Strategic Mgmt & Bus Policy 3E, Tata McGraw-Hill Education, New Delhi
- Kyriazoglou J., Nasuti F., Kyriazoglou C. (2012), Corporate strategic & operational, The Institute for Internal Controls, USA
- Turner J. R., Keegan A. (1999), The Versatile Project based Organization: Governance and Operational Control, in "European Management Journal Vol 17 No 3", Netherlands
