I get this question fairly often; is there any difference between operations and projects.
What I know in terms of Financing, Projects are under CAPEX and Operations are under OPEX.
Well, having said that, is there any other big difference?
Does any organizations are classified mainly into these two (Operations and Projects)? And if so, this is where the organization hierarchy starts? Saving Changes...
Hello Muthukrishnan, that question can be confusing especially to new entrants into project profession and practice. There are same projectized companies while others are functional based. Now the real confused is where a company has both inter mingled. In real world some situations are complex, for me who has been in Telecom for over ten years its common to run a project without a budget...sounds strange, but common. In this case you borrow staff from operations depart to deploy/ excute the project.
I am a new entrant. And, I could understand that it depends on type of organization.
In my previous company, we only deal with projects and not any operations. We are basically a PMC who manages projects and consults clients. Now, in this case, only the company is project based rather than functional based. However, all our staffs are functional based (specialized). Saving Changes...
Dear Muthu ,
In your case ...you are into Projects which means you need to look into your factory/Manf.Units expansions according to the organization business visions.
In my view , Generally the hierarchy starts with the Business head who can decide on the expansion units and generate multiple projects either at PMO or at manufacturing unit specific.
Yes, in my case, it is the BOD who decides for expansion project ( multiple) at a manufacturing unit. Saving Changes...
I guess you are not looking for just the difference in definition because that can be found easily but I guess I agree with Sergio that in one project you can have both type of CAPEX and OPEX The cash flow would continue for operational expenses even your project is done no more capital expenses but until you secure the pay-back period your balance sheet keep active behind the scene, your project might have been funded by free cash flow. Your fix charges and optimization of resources plays can impact your total cost with variable charges due to project activities then after you have your running cost which include MRO through out the life cycle of the product.
@ Muthukrishnan
MRO (maintenance, repair and operating supply) items are used in production and plant maintenance and can be items such as maintenance supplies, spare parts, and consumables used in the production process. So these cost of Maintenance, repair and operations (MRO) involves maintaining, repairing, and replacing if necessary devices, equipment, machinery, building infrastructure, and supporting utilities in industrial, business, governmental, and residential installations. Over time,etc this is your running cost after project complete its life cycle.
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Kevin put this very nicely.
In simple words, in construction, Operations have different budgets than Projects. A project delivers a unique output and then the operations start after handing over the buildings.
Example: You build a hospital (That is the Project) and then after it is done and handed over, you need to operate it (That is an Operation).
In simple words, in construction, Operations have different budgets than Projects. A project delivers a unique output and then the operations start after handing over the buildings.
Example: You build a hospital (That is the Project) and then after it is done and handed over, you need to operate it (That is an Operation).
@ Muthukrishnan
MRO (maintenance, repair and operating supply) items are used in production and plant maintenance and can be items such as maintenance supplies, spare parts, and consumables used in the production process. So these cost of Maintenance, repair and operations (MRO) involves maintaining, repairing, and replacing if necessary devices, equipment, machinery, building infrastructure, and supporting utilities in industrial, business, governmental, and residential installations. Over time,etc this is your running cost after project complete its life cycle.
yes got it. Thanks for valuable reply Riyadh Saving Changes...