Operational excellence

As market environments shift and competitive pressures increase, companies have to adopt new strategies. Ultimately they need new operational models to accommodate these new plans.
But then again, rising instability and business complexity have recently made operational transformation much more difficult. In a perfect world, day-to-day operations are managed for peak performance, so that it maximizes its profits while minimizing its risks, costs and losses.

However, in the real world management must make constant compromises and adjustments in the risk-cost-loss equation, in order to keep their company’s operational infrastructure aligned with its current strategy. To hit the right balance, management must be very clear about the operational goals and develop key performance metrics that will enable them to manage those operations within well-defined tolerances.

How does this affect you?

Companies from both manufacturing and service industries are now looking to reshape their operations making them more agile, flexible and responsive to changing market conditions. And that’s not an easy task.

Many companies haven’t been able to build on these gains as they didn’t develop the systems and/or team leaders who can – continuously identify and make efficiency improvements – align corporate vision with activities on the ground – and demonstrate the technical and interpersonal skills that will help establish a lasting culture of operational excellence.

The ultimate challenge is in the service sector. Unlike in factories, where indicators are visible; idle workers and stacks of inventory – are clear signals that an operation is poorly designed. In service operations, it’s often difficult to identify waste and inefficiency – Management may be aware of operational problems but unable to define them in detail – let alone – design ways to correct them. For a service provider, failure to understand how well its operations are functioning can be fatal.