Operations Management for Solar Integrators

In this article, I focus on the operations management functions within a residential or small commercial PV systems integration company. While I do not specifically cover other types of renewable energy installation companies, manufacturing, engineering or other service-oriented organizations, my suggestions apply to those businesses as well. The key elements of operations are the same in any business; they just may be applied differently.

This article details operations management strategies that have worked well for me. The content is generally organized from inside to outside the office, post-sales through project closeout. Basic principles for optimizing personnel, resources and processes are all considered.

FUNDAMENTALS

As defined by Fisher College of Business, at the Ohio State University, operations management is “the systematic direction and control of the processes that transform inputs into finished goods and services.” In common parlance, the term operations is often used to mean operations management, but technically it refers to jobs or tasks that make up processes. As noted by Carter McNamara, co-owner of Authenticity Consulting and developer of the Free Management Library, “Usually, small businesses don’t talk about ‘operations management,’ but they carry out the activities that management schools typically associate with the phrase.”

For a solar integrator, the operations function is, basically, whatever must occur once a sale is completed in order to honor the commitment to the customer. It directs processes like scheduling, permitting, purchasing, inventory management, installation, commissioning and inspection. It controls resources like facilities, vehicles, tools, computer hardware or software. These and other inputs are essential to the process of delivering a product—in this case, the installation of a PV system.

THE OPERATIONS TEAM

The size of the company determines the size of its operations team, which performs both bureaucratic and customer care functions. In a young company, employees tend to wear multiple hats. The business owner may initially serve as president, CEO, CFO, COO and janitor; the company’s first crew leader may also have to permit, commission and maintain systems. No matter which other hats are worn, everyone in operations must wear the customer care hat.

As the company grows, it is important to define, streamline and specialize roles and responsibilities. An example organizational chart for a PV integrator’s operations team is shown in Figure 1. Brief descriptions of each role follow.

Operations manager. As leader of the operations team, the operations manager determines its organizational structure and workflow processes. If these are functioning well, customers, employees and management all benefit. Perhaps the most important measure of operational effectiveness is customer satisfaction, as a solar business cannot thrive without happy customers and their referrals. This means that quality control is a priority for operations managers, who must see to it that internal standards are set appropriately. They are ultimately responsible for staff training, professional development and evaluation. Operations managers are also concerned with cost reduction, which is a good measure of operational efficiency. Quality, efficiency and cost reduction are ultimately major contributors to customer satisfaction. Because efficiency and effectiveness are so critical, an operations manager is not merely concerned with the tasks involved with delivering an end product. Some component of measurement and analysis is also required, such as project profitability analyses or cost-benefit analyses for new products. As the margins for a solar integrator are fairly low, cost reduction measures should be ongoing. Whether you are in the business of installation, manufacturing, engineering or providing some other service, internal process improvement is always possible.

Customer care specialist. Ideally customers should have to remember the name of only one person in the operations department. That name belongs to the customer care specialist, who is the only one customers should receive calls from concerning the installation process—and who holds one of the most important positions. The key job functions can include:

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