Standard operating procedures (SOPs) are documents that guide the people in organizations on how to accomplish specific tasks. They can cover a multitude of processes.
SOPs can outline the steps a company’s human resource officers must take when selecting and hiring candidates and the procedures account managers need to follow when onboarding clients. They can guide customer service personnel when handling customer complaints, strategists when following up on leads, and warehouse employees when fulfilling orders. Organizations may even have SOPs for writing SOPs.
What are the benefits of having well-developed SOP documentation?
1. Enforces Consistency, Increasing Productivity
SOPs provide easy-to-follow and straightforward steps that people in an organization responsible for particular tasks must follow. The procedures they contain have been chosen because they have been proven to lead to excellent outcomes. Understanding product management ensures that these steps align closely with strategic goals and market demands, facilitating efficient task execution and consistent quality in outcomes.
Therefore, SOPs foster consistency in both the procedures and results. This, in turn, enhances a company’s productivity for the following reasons:
● Streamlines processes: Since SOPs prescribe standard steps for accomplishing tasks, they eliminate guesswork and variability, which can slow down operations and lead to inefficiencies.
● Minimizes errors and resulting downtimes: Consistent procedures reduce the likelihood of errors. Fewer mistakes mean less time spent correcting them, thereby maximizing the company’s use of time and resources.
● Enhances employee performance: SOPs are like recipes that guarantee excellent results when followed to the letter. When employees follow SOPs, they can be assured of a great outcome.
In Practice
A semiconductor factory has well-developed and documented manufacturing procedures. It has SOPs for operating machinery, cleaning and maintaining equipment, evaluating raw materials, and quality controls.
Its employees have also been thoroughly trained to adhere to relevant SOPs. As such, the factory can consistently follow the same operational procedures.
As a result of this consistency, it can:
● Reduce the time every step in the manufacturing process takes.
● Minimize contamination due to errors.
● Minimize the time spent on corrective action.
● Minimize losses due to errors and downtimes.
● Minimize time spent on quality control.
● Ensure predictability in timings and outcomes regardless of the shift and employees working the line.
● Improve workflows.
All of the above lead to productivity gains.
2. Provides Ready Answers to Issues (and Prevents Problems From Occurring)
SOPs serve as a comprehensive repository of ready answers and preventive strategies. When it comes to issues and preventing them, SOPs:
● Provide a quick reference for challenges: SOPs offer a detailed guide for handling frequent operational challenges. This ready availability of solutions speeds up problem-solving, minimizing disruptions to productivity.
● Prevent potential problems: By outlining best practices that steer everyone away from potential pitfalls, SOPs ensure employees can avoid errors and prevent mistakes.
● Standardize response mechanisms: SOPs provide standardized response procedures, ensuring consistency and effectiveness in dealing with issues.
In Practice
If a software as a service company experiences a data breach, what should it do? If it has clear procedures on how it will continue to operate and recover from such a situation (specifically, business continuity and disaster recovery plans in response to data loss, privacy breaches and systems inaccessibility), it can immediately act to prevent or minimize losses.
In fact, if the company had well-developed SOPs for data security and privacy, the crisis might have been avoided. For instance, if it had SOPs for employees getting in and out of the premises, logging in and out of workstations, accessing external websites, downloading attachments, etc., the company would have been able to minimize the likelihood of a breach.
SOPs do not only prevent and provide answers to catastrophic issues. They are most helpful in avoiding common errors and mistakes due to carelessness or lack of diligence.
SOPs do not leave any room for interpretation. A semiconductor factory employee will know exactly which wires and soldering equipment to use, what soldering timings to maintain and which steps to perform in succession.
By having well-developed SOPs, a semiconductor factory can avoid quality control issues, such as electrodes not being correctly connected to lead frames. Additionally, SOPs detailing how to handle such issues when they happen will minimize losses in manpower, materials and time. The company won’t have to lose time and production as it scrambles around for a solution; its SOPs already lay them out clearly for everyone to know and follow.
3. Enhances Quality
SOPs are crucial to maintaining and upholding the quality of products and services. Specifically, SOPs lead to better quality by ensuring:
● Uniformity in processes: Standard inputs and procedures mean standard levels of quality. SOPs ensure that every task is performed in a standardized manner, and this is vital to delivering consistent quality levels in products and services.
● Reduced variability: SOPs enable employees (seasoned and newbies alike) to execute tasks the same way every time. This minimized variability in procedures means minimized variability in outcomes. SOPs, therefore, contribute to a more predictable and high-quality output.
● Continuous improvement: SOPs are not static, and they evolve based on feedback and performance data. This continuous improvement cycle leads to ongoing procedural and operational enhancements that improve product and service quality.
In Practice
A commercial bakery is struggling with inconsistent bun quality. In some batches, the buns come out perfect. However, other times, they are irregularly shaped, cupped, overly soft, excessively firm, wrinkled, unevenly baked, blistered, too dark, or too light.
The management noticed that the perfect buns came out whenever an employee named Jane worked the line. They talked to Jane about what they could do to resolve their bun-baking problems and came up with SOPs for everyone to follow.
Specifically, they created bun-baking SOPs that detailed precise ingredient proportions, timing and baking methods. They even developed SOPs to resolve issues as soon as they present themselves (e.g., when the dough becomes too sticky or watery). They then trained everyone working the floor on these SOPs.
After implementing standard operating procedures, the bakery’s buns came out perfect every time, regardless of whether or not Jane was on the floor. The consistent excellent bun quality meant better employee performance, empowering them and improving their morale. It also minimized losses in production, ensured higher client satisfaction and boosted client retention.
SOPs: Vital to the Bottom Line
SOPs operationalize best standards and practices. By fostering consistency, they increase productivity. They also provide ready answers to issues, prevent mistakes and enhance quality. All of these lead to improved profitability.
AUTHOR BIO
Mini Madhavan is a Management Consulting Partner at Affility, a comprehensive advisory services firm assisting clients in the UAE and worldwide with IT, risk and management consulting solutions. A specialist Audit and Consulting Professional with over 12 years of experience, Mini is an EY alumnus, a Fellow Member of ACCA who helps Entrepreneurs and Business leaders to accomplish their business goals by planning, optimizing and implementing their business processes.
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