Meaning of SOP in Business

Every company has processes and operations that must be repeated. All these operations are a part of the significant processes in which the business progresses and grows. Also, there are specific ways and protocols that must be abided by when attempting and completing these operations. This is where the SOPs come into the picture.

Some operations can require multiple teams to work on a single operation. Standard Operating Procedure meaning in business is used to define these steps which all teams can use. The SOPs are kind of guides that let the users know about the steps required for completing a particular set of processes.

Definition of SOP in Business

This sop meaning in business can be referred to as the set of instructions or steps documented to complete routine and repeatable operations. Inside a company, these SOPs become a lot more significant as they serve as a guide for all the team members involved.

SOPs in business are called by many different terminologies such as process documents, training guides or manuals, or employee handbooks. Eventually, all these imply the same and mean to serve all the people within the organization. It educates them, or also the clients or customers, about the processes or operations.

Effectively, these SOPs are required everywhere within the organization. The need to have SOPs in a larger organization will be greater as a larger business will employ more number of operations and processes.

SOPs can be immensely helpful for businesses in simplifying their processes. Not only the team leaders and managers, but the junior members can benefit from SOPs as well. From outlining the smallest details to defining major tasks, standard operating procedures can prove to be greatly advantageous for improving productivity.

What is the Main Purpose of SOP in Business?

We have understood so far in the article that an SOP is a comprehensive and explanatory guide that sketches out every detail to perform a particular task. It includes all the steps and instructions that are required to complete the task successfully within a business setting.

The following points summarize the main purpose of an SOP in business:

Keeping things consistent: Ensuring uniformity in the way tasks are carried out and finished is one of the main goals of having a standard operating procedure. No matter who completes the task, a SOP guarantees that the procedure will remain the same.

Moreover, with uniform outputs, there are fewer chances of errors and mistakes, as there are fewer variations. This eventually leads to enhanced quality of the product and improved customer satisfaction.

Better efficiency and productivity: Within a company, SOP drives the meaning of inculcating better efficiency and productivity from the employees. It ensures this by providing a clear set of instructions that reduce the time taken for routine tasks, thus, helping the teams to carry out the same processes in less time and with negligible errors.

All this happens as now the employees know what steps are to be followed. They do not carry out the unnecessary steps that may add to the confusion and lead to longer completion times. With the SOPs in place, there is an observed increased productivity as well. Employees can easily spot the bottlenecks or inefficiencies in the processes and facilitate continuous improvement.

Training and onboarding: Another meaning of SOP in business is that of a valuable resource for new employees. The SOPs include all the steps in detail which also comprise all the fundamentals of the concept. This considerably brings down the time required to train the new employees and they can add to the productivity of the team much quicker. Also, the SOPs can help maintain a consistent standard of work during the onboarding process.

Compliance and risk: Many businesses need to follow stringent regulatory laws. For these regulatory requirements, the SOPs can be crucial. They help in documenting the steps that are essential and need to be taken. They also provide the safety measures that the teams must remember.

Regulation adherence is sometimes necessary in certain areas, including the legal, financial, medical, and manufacturing sectors. Companies in these sectors run the danger of paying hefty fines and severe punishments for violating these laws. Apart from these aspects, the SOPs play a crucial role in guaranteeing the implementation of safety protocols.

Responsibility: Standard operating procedures (SOPs) are an excellent tool for defining roles and duties in a group or company. These serve as documents of the best practices that can be followed organization-wide. Owing to this clarity and conciseness, the SOP ensures that every employee understands their role and duties. In such a scenario of clear outlines, everyone is encouraged to take up the responsibility and ownership of the tasks they are handling.

Documenting the best practices: With so many procedures going on in an organization, it becomes relevant to document all the steps. It is only in the course of time that businesses realize what would be the best way to perform or complete an action successfully. Here, the SOPs can come to the rescue and serve as a single source of truth that comprises the best practices to complete the action. This is great for preserving organizational knowledge. Moreover, it makes it easy for all to follow the instructions consistently and replicate them as and when needed.

All the above-mentioned points underline the importance of the SOP meaning in business.

What is an SOP Example?

Any new concept can be better understood with the help of an example. As we have already got a glimpse of what SOP is, here is an example that describes a generic scenario of handling customer complaints. This SOP example can be a good guide for newcomers to the team.

Handling customer complaints

This procedure applies to all customer service representatives who handle customer complaints. They could be doing this either over the phone, in person, or through email.

Procedure:

  1. Receiving the complaint: greet the customer politely and ask how you can assist them.
  2. Documenting the complaint: Log the complaint in the Customer Relationship Management system. This must include the following:
    • Customer’s name
    • Customer’s contact information
    • Date and time of the complaint
    • Detailed description of the complaint
    • Any immediate actions that are taken
  3. Investigating the complaint: Review the complaint and understand their purchase history. Gather all necessary information from the customer to understand the issue fully. If required, consult with other departments to gather additional information.
  4. Resolving the complaint: Apologize to the customer and empathize with their situation. Propose a solution that aligns with the company policy. Possible resolutions include the following:
    • Refund or replacement of the product
    • Discount on future purchases
    • Free expedited shipping
  5. Ensure the customer agrees with the proposed solution. If not, negotiate until a satisfactory resolution is found.
  6. Follow-up: Confirm the resolution with the customer via their preferred method of communication. Log the resolution details in the CRM system. Follow up with the customer within 7 days to ensure they are satisfied with the resolution.
  7. Review and continuous improvement: Monthly, the Customer Service Manager will review all logged complaints to identify patterns or recurring issues. Implement changes to the process or product based on this analysis to prevent future complaints.
  8. Quality control: To guarantee adherence to this SOP, monthly random inspections of the complaints that have been registered shall be carried out. Surveys of customer satisfaction will be used to evaluate how well complaints are resolved.

Since this is merely an example, there may be differences depending on the industry in which it is used.

What are the Components of an SOP?

We understand that SOPs’ meaning in business is highlighted by their ability to act as a guidebook for maintaining clarity and uniformity across the organization for performing tasks. Therefore, it is vital to underline the components that ensure consistency and comprehensiveness in an SOP. Let’s take a look:

Title page: On the title page, we have the following components clearly stated:

  • Title: This mentions clearly the procedure’s name.
  • Document number: This acts as the unique identifier of the SOP.
  • Effective date: This date indicates the date from which the SOP is applicable.
  • Version number: This number indicates the current version of the SOP.
  • Author: This indicates the name of the person who composed the SOP.
  • Approved by: This includes the name of the approver of the SOP.

Table of Contents: TOC or the table of contents is the list of the topics that are included in the SOP. There is a list of sections in which the SOP may be divided for easy navigation by the reader. TOC carries information about all the topics and sub-topics in the SOP. This is especially useful if the SOPs are longer.

Purpose: This describes the purpose or the objective of writing the SOP. Basically, it explains how the SOP can help the reader.

Scope: This defines the applicability of the SOP. This section helps the specific departments or teams or roles within a business that can utilize this SOP.

Responsibilities and details of duties: The roles and responsibilities of the persons or teams carrying out the tasks specified in the SOP are described in this section.

Materials and equipment: This section of the SOP gives an overview of the supplies, instruments, or gadgets needed to complete the task.

Procedure: This is the collection of guidelines that explain to the reader how to carry out the assignment. These are steps that follow one another and are frequently explained in sections and sub-parts. This section of the SOP informs users of the stages that will be involved in the procedure and the preparations that are required before beginning.

QA & QC: This SOP part describes how the procedure’s quality will be kept an eye on and preserved.

Safety instructions: These list possible risks or injuries along with advice on how to avoid them.

References: This indicates the names of other SOPs, guidelines, manuals, and references that may be used in creating this SOP.

SOP Best Practices

Given all of the advantages it provides in terms of standardizing and eliminating errors from processes, the meaning of SOP in business cannot be understated. Let’s go over some of the most effective ways to write a SOP.

Information gathering and research
This is the very first step as without the appropriate and accurate information, it would be impossible to start writing an SOP. This also requires complete and exhaustive research about the topic.

One must identify the correct procedure that would require documentation. The next step is to gather information on this process and also connect with the subject matter experts who could provide their input on the subject.

SOP structuring
It is crucial that any documentation be presented in a way that is both easily understood and transitions from one section to the next. Step-by-step instructions that are simple to comprehend will make it straightforward for customers to navigate the handbook and finish the activity.

Using simple language
Use straightforward and simple language that readers can easily understand. Too much jargon can make it difficult to understand. Unfamiliar terminologies can hinder the process of grasping the steps in the SOP. Using simple terms can guide them flawlessly.

Maintain consistency
Consistency and version controls add to the effectiveness of the SOP. This makes it easy to locate and keep organized. Be consistent with styles and formatting to give it a professional look and feel.

Conclusion

Make sure employees and staff members receive thorough training on utilizing and adhering to SOPs in order to guarantee successful implementation. Training sessions can be delivered through demonstrations, hands-on activities, or presentations made with Google Slides or PowerPoint, or any other medium that may be fruitful.

It is essential to include all pertinent stakeholders and subject-matter experts in the process of reviewing and approving an SOP before it is finalized. Including input from several angles makes it easier to find any weaknesses or areas where the SOP could be strengthened.

About BPX

BPX stands at the forefront of SOP Consulting and Process Consulting services, boasting over 12+ years of dedicated experience in the field. Our seasoned team has partnered with a diverse clientele, spanning more than 12 countries, to tailor and refine business processes. At BPX, we specialize in crafting Standard Operating Procedures (SOPs) and adopt BPMN 2.0 methodology for leveraging advanced process consulting methodologies to optimize performance and efficiency. If you’re looking to boost efficiency or scale your business with streamlined processes or establish robust SOPs, BPX is your trusted partner in driving operational excellence and sustainable growth.

FAQs

Title page, TOC, Purpose, Procedure, Quality Assurance, and references are the 5 parts of an SOP.
The main purpose of the SOP is to facilitate consistency in performing tasks and pave the way for good quality control.

Author Bio

YRC-rupal

Rupal Agarwal

Chief Strategy Officer
Dr. Rupal’s “Everything is possible” attitude helps achieve the impossible. Dr. Rupal Agarwal has worked with 300+ companies from various sectors, since 2012, to custom-build SOPs, push their limits and improve performance efficiency. Rupal & her team have remarkable success stories of helping companies scale 10X with business process standardization.

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