We have been providing consultation and optimization services for business process mapping and Standard Operation Procedures (SOP) documentation in the market for years.
One of the common questions from our clients is whether they could run a business without developing SOPs in an organization.
Without a proper SOPs in place is one of the common issues for most of the small and medium-sized businesses (SME), including family businesses. However, have you aware of the common challenges and failures that most businesses are facing nowadays?
For instance, some businesses are facing issues such as cash compensation and losses, customer attrition, high goods return rate, bad debts, stock inventory loss, procurement mistakes, employees’ poor performance, high staff turnover, etc.
The organizations usually are having a hard time in resolving these problems as it is such a pain due to time and money consuming. This is where the businesses should start reviewing their work processes and optimize SOP to survive and grow in such a competitive market.
Not sure how to start from scratch? Follow the 6 easy steps below to build simple and useful SOP according to your business needs:-
1. Identify Company’s mission, vision and core values
All organizations should identify and build their business vision and goals clearly. A good mission statement will not only explain your brand’s purpose and values, but will also foster a connection with customers through services and products provided.
Mission and vision statements can be great means to give an organization focus, coherence, and direction.
Example: One of the missions for an F&B outsourcing company is to deliver food that meets food hygiene and safety standards to its destination timely and smoothly.
2. Building core business processes to achieve corporate goals and values
Core Process mainly refers to manufacturer/service provider, procurement and vendor management, product/service (R&D) development.
The periphery of the Core Process is marketing, sales, finance, product and services quality, employees, the management responsibilities and obligations depending on the business size and industry, business operations align with the Core Process and others in order to achieve the ultimate goals and fulfill customers commitments.
Example: One of the missions for an F&B outsourcing company is to deliver food that meets food hygiene and safety standards to its destination on time. Thus, the Core Process refers to:
- Proper transportation arrangement to keep the food safe and hygiene
- Training and management for Drivers to increase safety awareness
- Schedule management for timely delivery
- Back up plans for delivery in case of emergency or transportation breakdown
- Kitchen hygiene control to meet required standards
- Staff training for food and kitchen safety tips and management
3. Develop company policies and standard indicators
Standard indicators are the key control element to manage and measure the above-mentioned operational processes, strategies and implementations in order to achieve corporate goals and missions.
Example: Training and management of kitchen staff are one of the key missions for an F&B company. Therefore, the amount of training hours per employee needs to be fixed and specified to ensure they are fully educated about the food and kitchen safety and hygiene standards.
The other policies such as vaccination for food handlers, performance and KPI review, assign designated tasks for certain groups of employees based on their course completion level, etc. are required as well.
4. Develop Standard Operation Procedures (SOP)
Every business has its own operation workflow as it is fundamental to effective business management. The workflows can be visualized with tools such as flowcharts and process maps, but the processes should be standardized and documented as ‘Procedures’ if the workflows are too detailed and complicated.
If the workflows contain risk management such as business compensation and losses, the processes should be documented as ‘Working Handbook’.
For workflows which include detailed procedures for certain tasks, the processes should be organized as ‘Work Instruction’ for clear guidelines.
Example: An F&B outsourcing company needs to deliver food that meets food hygiene and safety standards to its destination timely. A complete set of standard instructions should be provided to food handlers so that the stated requirements could be met.
It must include but not limited to, the guidelines on selecting and handling food ingredients, fresh food preservation methods, keeping hygiene and freshness during transportation etc. to achieve the corporate values.
5. Set up internal control system (additional manpower may be required)
The internal control system could help to improve work efficiency and business performance.
For example: Food handlers should complete a certain number of training hours every year to increase their awareness and skills of handling food ingredients and full procedures.
6. Monitor, Review and Adjust
How to ensure that the organization has adequate operating procedures? The managers shall provide reports and review the workflow and performance regularly. Adjustment shall be made if there is improvement needed.
Example: If the internal control system is not working in an F&B company, the management may find that the staff are not performing well and the customers will still complain about the food hygiene problem.
The management could identify the issues if there are standard indicators in place so that they could review and make adjustments accordingly.
In summary, the future development plan of an organization is the key to success. The business operations should be standardized and systematic if there is a plan for business expansion.
Having standard operating procedures (SOP) in place is the best way to avoid communication breakdown and to improve work efficiency for consistent results. Daily operations could be carried out smoothly because the SOP helps in delegating tasks and ensure business continuity within guidelines.
Moreover, the management team would be able to spend more time in strategic planning and business expansion once these issues can be controlled and resolved by implementing proper SOP in the organization.
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