What is Operations / R&D?

Operations / R&D (Research & Development) represent the production, creation and innovation of value for the customer.

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What does the customer value?
 

This is the question that should drive how the business creates value and provides a solution to a real problem in the world. 

The cost of manufacturing each unit (and the price you charge) can play a significant role how quickly your business generates profit each month:Amplify Methodology-4

There are a variety of ways we can improve profitability and cash position:

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Practical Application:

  • Reduce cost of goods
    • Identify a cheaper supplier
    • Apply value engineering to the development process (see resource at end of article)
    • Buy inventory in bulk or when on sale (but don't over-purchase) to get a discount
    • Produce your product or service more efficiently 
  • Introduce higher margin products
    • Identify offerings that maximize perceived value to the customer and minimize the cost of production
  • Liquidate surplus inventory
    • Run a sale to turn overstocked inventory back into cash
  • Optimize inventory purchasing
    • Delay unnecessary ordering that could lead to overstock (Inventory Planner is a great tool that can help plan out replenishment)
  • Postpone capital expenditures or improvements 

By identifying the symptoms of bottlenecks in the areas of your business, we can identify potential solutions to alleviate constraints.

  • Symptom
    • Inventory is running out, despite available cash to purchase
    • Fulfillment time is too long
    • Products/services are not innovating enough to keep up with competition
    • Customers have purchased everything you offer and have nothing else to buy
  • Solution

Apply it to your business (fill in the blank with one of the tactics above): 

  • If I were going to _________ right now, where would I start?
  • How have I found ways to _________ in the past?
  • Who in a business/industry similar to mine would I be able to ask about _________?
  • How could I inexpensively and quickly test _________?
  • When can I commit to testing _________, and how will I know if it’s working?


R&D (Research & Development)
When considering your next product or service that you'd like to introduce to the market, consider how you can intentionally develop the offering in a way that maximizes profitability.

Beginning at the 35:00 mark, Sharon Price John gives us a great example of how value engineering can help improve the profitability of your business: