Investor's wiki

Continuous Operations

Continuous Operations

What Are Continuous Operations?

Continuous operations are activities inside a business or organization that are progressing and supported in the event of a business disruption. Continuous operations likewise alludes to a firm running its business around the clock, with downtime just for maintenance and repair in manufacturing facilities.

Grasping Continuous Operations

In the event of an interruption of operations (natural disaster or power blackout, e.g.) or an approaching serious threat that causes an impermanent shutdown of an office or facility, a company can carry out its continuous operations plan (otherwise called a business continuity plan). Commonly, this generally includes sending back-up technology systems, enacting human resources in remote locales to carry out required works, or adding shifts at other manufacturing plants to compensate for lost production.

For instance, an aircraft parts manufacturer must close down its operations in Florida due to a hurricane. The company adds a third shift at its plant in Texas to keep completed inventories steady. In the service industry, a bank whose trading systems experience a blackout in New York City rapidly redirects customer orders to a back-up system in New Jersey, in this way protecting continuous operations.

Round the Clock Operations

Continuous operations likewise apply to day in and day out business activities. Here customers hope to have the option to address a person inhabit any time or night - an airline ticket holder, for instance, or a credit card holder who needs to ask an inquiry around midnight.

With tenacious compels on cost regulation to keep up with profit margins, additional manufacturing companies are relocating to continuous operations in production by merging facilities and running them in three eight-hour shifts rather than a couple. Food monster Nestle carried out this step in 2014 at a plant that makes frozen dinners. In a statement, Nestle said, "Doing so gives the extra space we expect for the continuous operations model."

Benefits of Continuous Operations

Higher Output: Higher volume becomes conceivable over a more limited duration due to continuous operations and taking out pointless beginning up and shutdown stages.

Lower Production Costs: Continuous operations energize increased automation and the reduction of superfluous labor, the two of which lower the cost of production.

Further developed Quality Control: Streamlined processes utilized in continuous operations means less stages to direct, allowing companies to recognize production issues rapidly. Decreased manual production additionally diminishes the potential for human mistake.

Limitations of Continuous Operations

Capital Intensive: Purchasing and introducing the important equipment to run continuous operations requires a lot of capital. Companies must likewise prepare their employees the skills required to guarantee day in and day out operations run flawlessly which increments human resources costs.

Low Flexibility: Continuous operations lays out unbending production systems. A shortcoming in one stage of the operation can upset, or halt, the whole cycle.

Illustration of Continuous Operations at Tesla

In April 2018, electric vehicle company Tesla, Inc. (TSLA) announced it would move to continuous operations of its Model 3 to meet an increased production target of 6,000 cars every week. Organizer and CEO Elon Musk said the company's previous target of 5,000 cars gave no margin to blunder across Tesla's manufacturing interaction and supply chain. To accomplish its goal, the vehicle maker overhauled its Fremont, California plant and rolled out several improvements to its automation processes to work with round the clock production.


  • Continuous operations likewise portray companies that operate all day, every day.
  • Continuous operations are activities inside a business that are progressing and supported in the event of a business disruption.
  • Limitations of continuous operations incorporate high capital expenditure and low production flexibility.
  • The benefits of continuous operations incorporate higher output, lower production costs and worked on quality control.