Operations Analytics

Operations: Processes that turn inputs into goods and services that companies sell

Human Resources (HR): Branch of operations that focuses on managing and developing a company’s workforce, including recruiting, hiring, compensating, and training employees

IT Operations: Focuses on how the company manages IT and data

Supply Chain: A branch of operations responsible for the production of a product or service and its distribution to the final consumer.

Telemetry: Collection of data at remote points and its automatic transmission to monitoring equipment.

System Performance data: Focuses on computer applications, devices, and operating systems

Cybersecurity analytics: Analyzes historic system data to pinpoint the breach source and identify systems, programs, or accounts that were compromised

Service Performance data: Focus on help desk, change management, and incident response to IT problems

Service-level agreement (SLA): Level of service that the company expects from the technology vendor, and penalties if not attained

CRM, PLM, and ERP are all used for the product life cycle. In addition to this is external data that may help with various aspects of the product life cycle

Descriptive Operations Analytics:

  • Cash-to-cash cycle: Measures the length of time between the company paying its vendors and receiving cash from customers (days of inventory + days of accts receivable - days of accts payable), lower = better

  • Asset turnover: Measures the sales revenue generated by company’s assets (sales revenue/total assets), higher = better

  • Inventory to sales ratio: Measures amount of inventory carries to fulfill sales (inventory/sales), lower = better

  • Inventory turnover ratio: Measures number of times inventory is sold during the year (COGS/inventory), higher = better

Diagnostic Operations Analytics:

  • Control Charts: Graphs that plot data about a process in a time-ordered sequence

    • Upper and lower control limits are usually 3 standard deviations from the mean

Predictive Operations Analytics:

  • Regression Analysis: Use of statistics to determine if variables have an impact on an outcome and the size of the impact

Prescriptive Operations Analytics:

  • Optimization: Process of making something as effective as possible, often maximizing profit and minimizing costs

Operations Dashboard: Visual management tool that tracks and monitors KPIs to improve operations effectiveness