Shopify Resource Management - what is it?
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Resource management is a collection of processes, departmental skills, and ancillary actions that take place from sourcing product raw materials, manufacturing, and stocking all the way to sales, shipping, and customer service. Shopifys' store sits right in the middle of your resource management activity. Why is resource management important, we will also cover how it ties into the Shopify Admin and the various tools available.
What is resource management planning?
Most businesses have to look at tangible assets and intangible assets to come up with a plan that delivers the full business process such that it can be optimized for financial gain. The tangible assets are things like equipment, materials, and finances while the intangible assets are skills and time. By optimizing your skilled assets with the equipment and materials you get higher throughput and productivity. This is critical to your profitability, and your ability to scale and grow your business. Successful resource planning takes place when you apply the right resources to the right tasks, and have planned and scheduled the right materials to be available to be processed. This might mean in manufacturing, or even in shipping - to execute you need the right skill, the right material, and the right tools to get things done.
Why is resource management important?
Combining the resource management process with its planning, the task of ensuring that the full organization has what it needs to execute and deliver products to customers is why it is important. If the process isn't followed, or the planning has taken place, there is no ability to execute and deliver to the customer. Project resources will have resource requirements to perform their duties, this might utilize resource management tools to capture the needs of your human resources as well as machine maintenance schedules. To keep the organization at its top efficiency, management solutions are put into place for capturing the internal demand and supply of necessities as well as resource leveling so that one side of the organization does not overwhelm the others. These are some points on why it is essential to have resource management:
- Waste reduction: This ensures that the materials, space it utilizes, the skill you have hired, and the tools necessary to perform the job are all used with efficiency.
- Optimize time: Resource scheduling on prioritized tasks puts your business at its best resource utilization. Your resource allocation of skilled members that can be trained to be cross-trained gives your business additional flexibility if you are a team member down.
- Minimizing Risk: When business owners utilize their resource management skills, they ensure that contingency plans are in place when materials fall short or some workers get sick or a machine goes down.
- Maximize Profit: When employees don't maximize their time for productivity because the materials of machinery are not available, you are not in a position to maximize your profits due to production shipping delays. The organization has to have redundancies and resource management software can track both activity and materials to ensure throughput is within expectations.
Resource Management Areas
Sometimes Resource Management is perceived to be the role of a Project Manager, however, it goes much further than running a project since you are overseeing resources, not just the results of the resources.
- Procurement: Looking into material and equipment acquisition and scheduling, financial projections, training, and employee cross-training. Is the throughput of the material, equipment, and trained resources reliable and delivering quality?
- Staffing: Alignment of skills to the required tasks, and do you have the right staff doing the right jobs?
- Space: Are the space requirements fit for purpose of the various departments to operate with efficiency and are the logistical elements working for your staff?
- Equipment: Is the equipment reliable, outputting the right level of quality, and is the staff trained well enough to manage the machinery safely?
- Technology: What are the tools to manage the process, how are escalations handled, and how are they being resolved and communicated in a timely manner? Capturing the communication, and reacting to the escalations are important aspects of your resource management.
Resource Management Techniques
There are 3 different techniques used in resource management: Resource leveling, Resource leveling, and resource forecasting.
Resource leveling: It is the approach to avoiding shortages or excess materials, it ensures that labor is productive without overloading or having them idle. It also makes sure that the machinery is operating at its optimum - throughput being measured and ensuring it is being performed at an optimum cost.
Resource Smoothing: This is a scheduling approach and setting targets for the department to operate within these guidelines. This approach is usually applied with teams that are less reliant on materials, and are more focused on customers - sales teams or customer support teams.
Resource Forecasting: This is a planned approach to ensure that lead times are factored in when it comes to materials, equipment replacement parts, servicing of equipment, and lastly hiring/training of staff.
How resource management fits with Shopify explained
Shopify is first and foremost a sales automation platform too has the tools to generate demand, and sales and is at the center of your ordering process. Your ability to use and extend this platform can have various architectures depending on the industry and customer business model. Shopify does have equipment such as its Shopify POS (Point of Sale) terminal and can be used with Basic Shopify all the way to Advanced Shopify, accepting payments that are crucial to your cash flow and ability to line up your resources. The data from the orders will help you forecast your labor, equipment, and materials such that Resource Forecasting has its input. Additional tools can be developed from the Shopify API to feed into manufacturing, support, or procurement. Inventory management and forecasting can also be monitored and forecasted to serve this purpose.
You might be a small business or a larger, every business requires some level of planning, allocating resources internally or outsourced. At the end of the day, your sales system is a driving force in your planning, and resource management is the structure to keep your operations in check. Being data-driven which Shopify is, you can use its analytics as a guide and have forecasting based on demand - this can be a great competitive advantage in driving a lean yet efficient operation. Tying to systems like an ERP (Enterprise Resource Planning) such as BrightPearl, Veeqo, or others makes good sense when operating an online store. Feel free to reach out to us at firstname.lastname@example.org
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