What are operational goals?
They are measurable, clearly defined goals companies seek to achieve to improve their overall performance. They are usually short – to medium-term and focus on internal activities such as production, quality, efficiency, and costs.
Setting operational objectives is the starting point for day-to-day actions and has a significant impact on the strategic planning, therefore, success, of any company:
- Strategic alignment: They align your action plan and day-to-day activities with the strategic vision and mission of the company.
- Performance evaluation: They provide clear criteria for better analysis of the performance of operations and people.
- Continuous improvement: They encourage continuous improvement by identifying areas for improvement and defining operational plans to achieve them.
- Motivation and engagement: They motivate employees by giving them clear, achievable objectives.
- Operational efficiency: They help optimize processes, reduce costs, and increase productivity.
The importance of influence factors
Influencing factors are internal and external elements that affect a plant's performance and sales. They play a significant role in defining and achieving operational goals, as the latter target precisely those factors that have a significant impact (positive or negative) on a strategic corporate issue.
- Internal factors (employee skills, available technology, internal processes) determine the organization's capabilities and limitations.
- External factors (economic conditions, technological advances, regulations, competition) impose constraints and create opportunities.
By considering these factors, companies can set realistic and relevant goals, align their strategies with market conditions and internal capabilities, and respond proactively to change. This ensures not only efficiency and productivity but also resilience and long-term competitiveness.
Operational goals vs. strategic goals
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Operational goals |
Strategic goals |
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Reach |
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Focus |
Tasks and processes required to achieve strategic objectives |
Vision, mission, and values |
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Duration |
Short to medium term (from a few months to a year) |
Long-term (often three to five years or more) |
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Temporality |
Immediate or short-term results |
Future direction and major corporate ambitions |
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Specificity |
Very specific and detailed:
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General and abstract:
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Detail level |
Concrete, measurable steps to achieve strategic objectives |
General framework without going into operational details |
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Responsibility |
Department heads or middle management teams |
Senior management or board of directors |
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Implementation |
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Example |
Productivity: Increase plant productivity by 10% over the next 12 months by optimizing manufacturing processes. |
Market expansion: To become the market leader in our sector in North America within five years. |
Strategic and operational goals are interdependent and contribute to an organization's long-term success. Aligning these two types of business goals ensures optimal performance and sustainable growth.
7 Types of operational goals in manufacturing (with examples)
1. Production objectives
Increase production capacity
Increase production volume to meet growing demand.
Example: Increase production capacity by 15% over the next 12 months by optimizing manufacturing processes.
Reduce downtime
Minimize production downtime by improving maintenance and planning.
Example: Reduce unplanned downtime by 20% by the end of the year through a preventive maintenance program.
2. Quality objectives
Reduce defects
Improve manufacturing processes to reduce the rate of defective products.
Example: Improve quality controls to reduce the rate of product defects from 5% to 2% over the next 12 months.
Increase customer satisfaction
Increase customer satisfaction by offering high-quality products.
Example: Achieve 90% customer satisfaction by improving employee training on quality standards and increasing controls at every production stage.
3. Health and safety objectives
Improve safety in the workplace
Reduce incidents by implementing rigorous safety measures.
Example: Reduce workplace accidents by 30% by increasing safety training and implementing new safety protocols.
Enhance employee well-being
Improve employees’ physical, mental, and social well-being and maintain a high level of well-being.
Example: Hold monthly workshops on stress management and other health-related topics led by experts in work health and psychology.
4. Efficiency objectives
Optimize processes
Streamline production processes to increase efficiency and reduce costs.
Example: Implement automated systems for repetitive tasks by the end of the year to reduce labor costs by 15% and increase production by 20%.
Reduce waste
Promote initiatives to reduce wasted materials and resources.
Example: Set up a recycling program to recover and reuse production materials to reduce industrial waste by 30% by the end of the year.
5. Financial objectives
Reduce production costs
Identify and implement measures to reduce production costs without compromising quality.
Example: Optimizing raw materials, reducing energy consumption, and improving manufacturing processes can reduce production costs by 15% over the next 12 months.
Improve profit margins
Increase profit margins by optimizing operations and controlling costs.
Example: Analyze the market and adjust selling prices for certain products to increase profit margins by 5% by the end of the year.
6. Innovation objectives
Develop new product
Invest in research and development to create new products and technologies.
Example: Launch three new products over the next 18 months by increasing R&D investment.
Implement new technologies
Integrate advanced technologies on the floor to improve manufacturing processes and remain competitive.
Example: Reduce new product development cycle by 25% by integrating agile methodologies.
7. Sustainability objectives
Reduce carbon footprint
Implement ecological practices to reduce environmental impact.
Example: Reduce carbon footprint by 20% within two years by adopting sustainable production practices and increasing the use of renewable energy.
Use sustainable materials
Adopt the use of recyclable or renewable materials in the production process.
Example: Implement a waste management program to recycle 75% of industrial waste by the end of the year.
Operational performance objectives (OPOs)
An OPO, or operational performance objective, aims to improve a company's operations. It is a specific operational goal that focuses on internal processes' efficiency, productivity, and quality.
OPOs ensure that day-to-day plant operations contribute effectively to overall strategic issues. They must be SMART:
- Specific and Measurable: OPOs are clearly defined and quantifiable. They state exactly what will be achieved, how it will be measured, and the success criteria.
- Ambitious: They must be ambitious, i.e. challenging and requiring a certain effort.
- Realistic: They must be atteinable and achievable, taking into account available resources and time constraints.
- Time-bound: They have specific deadlines to track progress and evaluate results within a defined timeframe.
The difference with operational goals
OPOs are a specific subcategory of operational objectives. Operational objectives provide a general framework covering a wide range of areas, but OPOs focus on precise, measurable actions to achieve these overall objectives and concrete, immediate results.
In other words, OPOs break down operational objective types into concrete, achievable tasks, making implementing and monitoring them easier.
Example: If the operational goal is to increase production capacity by 15% in one year, the associated OPO might be to automate manual tasks to increase productivity by 10% in six months.
Key steps for defining operational goals
1. Align with strategic goals
Operational goals must be defined in a way that supports the organization's broader strategic goals. Such alignment ensures that operational efforts are relevant and effective in achieving strategic objectives. It also promotes greater synergy between the different levels of planning and execution within a manufacturing company.
2. Identify critical areas and success factors
At this step, it is important to identify areas where performance is not meeting expectations. At the same time, critical success factors – i.e. areas that are essential to achieving the organization's strategic goals – need to be determined. By identifying areas for improvement and success factors, it is possible to define operational goals that will have an optimal impact on overall performance.
3. Create smaller targets within operational goals
Once operational goals have been defined, they can be broken down into smaller targets. Smaller targets are generally easier to achieve, as they are addressed in the short term. They also keep team members motivated as they work towards operational goals in the medium term.
Pro tip: Just like an operational goal, a target must be defined the SMART way.
4. Develop action plans
To reach operational goals, it's essential to create action plans that precisely describe the required steps. These plans should include specific tasks, deadlines, and resources to provide a clear, structured roadmap. Once action plans have been determined for all operational goals, they need to be prioritized based on their impact on strategic objectives. This ensures that efforts are focused on the right places, that resources are used efficiently, and that progress towards operational goals is consistent.
5. Monitor progress and make adjustments
Key performance indicators (KPIs) have to be set to monitor progress towards operational goals. These metrics can then be communicated to teams involved, giving them a clear understanding of expected performance. In addition, monitoring the progress of small targets helps to stay on track with operational goals and update the strategy if any deviation from set KPIs occurs.
6. Adapt to change
Flexibility is essential to adapt to changing situations or new information. Manufacturing companies need to be flexible and adjust their operational goals and action plans to meet both current realities and emerging opportunities. This dynamic approach enables them to remain competitive and grow in ever-changing markets.
7. Celebrate successes and learn from setbacks
Recognition is important for maintaining team morale and motivation. Celebrating the goal achievement can instill a strong sense of accomplishment and pride in employees of all levels (staff, management, directors, etc.). Employees who are recognized and celebrated are in turn more productive in their daily tasks and more motivated to reach the organization's strategic and operational goals.
Failures and shortcomings must also be highlighted and analyzed to understand the reasons for underperformance. Far from being negative, this approach helps identify areas for improvement and adjust strategies for greater future success, transforming every challenge into a learning and growth opportunity for organizations.
Use UTrakk DMS to ensure progression of operational goals in the plant
The digital age has transformed industrial management, particularly in defining and monitoring operational objectives. Traditional methods have given way to digitalization, with tools featuring advanced analysis, automation, and immediate reporting capabilities. Plants can adopt digital solutions to ensure optimal operation management and achieve operational goals more efficiently.
Among these solutions, the UTrakk Daily Management System (DMS) is an invaluable tool that enables key performance indicators to be set for various aspects of production, precisely measuring operational goals and monitoring their progress on a daily basis.
UTrakk DMS offers operational dashboards that display relevant data in a user-friendly, visual format, helping to identify trends, inefficiencies, and opportunities for improvement. Quick and easy access to this information enables immediate action to rectify deviations from performance indicators and stay on track towards achieving set operational objectives.
By implementing UTrakk, manufacturing companies can not only define KPIs, but also monitor their progress in real time and adjust strategies accordingly, to achieve their operational and strategic objectives efficiently. The result is not only greater efficiency, but also enhanced operational excellence, competitiveness, and future-proofed growth.
