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Jan 10 2014

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Every Company’s Operational Excellence Journey Is Different

Similarities in Operational Excellence Journeys

Manufacturing organizations today need to contend with unprecedented levels of competition—the result of complex global supply chains and global competition, increasing customer demands, international regulatory issues, and the speed of new product introduction cycles. As a consequence, leading companies are being forced to accelerate their journeys toward their visions of optimized operations and realizing ongoing production improvements.

The individual strategic objectives and challenges that companies experience can vary significantly, but the initial steps in facing them do not. This is because every pursuit of Operational Excellence—effectively optimizing people, process, and supporting technology resources—first requires the adoption of a Continuous Improvement mindset, including any needed cultural adjustments fostering increased collaboration across contributing departments within the business. Any problems that need to be addressed require a team effort, with all relevant stakeholders educated on the initiatives at hand.

Furthermore, all Operational Excellence initiatives also require a target, combination of metrics, or other process maturity yardstick of some kind to evaluate progress and move goals forward. And once these people and process related initiatives have begun, Operational Excellence journeys are then typically accelerated and sustained using the appropriate supporting technology.

Put simply, every Operational Excellence initiative shares critical similarities and starting points, including:

  • Coordination across people, process and technology
  • Continuous improvement approach and mentality
  • Measurement and targets to drive action and results
  • Increased levels of team collaboration
  • Sustained and accelerated by technology

However, this is where similarities typically end. A company’s strategic objectives, challenges, and Key Performance Indicators (KPIs) are highly dependent on industry, specific business situation, and where it currently finds itself along its unique Operational Excellence journey.

Operational Responsiveness and Agility are an Important Part of Many Operational Excellence Journeys

In our most recent Manufacturing Operations Management survey, over 250 respondents were asked to choose their top 3 strategic objectives for their manufacturing operations. The survey demographic spanned a broad range of manufacturing industries, including 37.1% from discrete manufacturing, 17.0% from process manufacturing, 15.2% food & beverage/consumer packaged goods, 11.4% from life sciences, and 19.3% from all other industries. These respondents had several objectives to choose from, and below are the top five. Second only to ensuring product quality consistency was the ability to be responsive to customer demands, with 56% of responses.

 

Top 5 Strategic Objectives of Manufacturers

Given that responding to customer demands is such a high priority for so many companies, it is not surprising that a growing number of companies today are focused on adopting the right dynamic process and technology capabilities that can enable agile response to customer demands and changes in the marketplace.

According to the survey, 26% of respondents currently have both dynamic processes and supporting software in place to respond to these challenges, with an additional 10% planning to do so in the next year. Seventeen percent of respondents have the foundational processes in place, with another 10% planning to implement them in the next year. Overall, a total of 63% of respondents are either currently possess these process and software capabilities or are actively working to implement them to enable or increase operations agility. This is an important indication of how manufacturing industries are rising to meet this challenge.

 

Research Findings: Ability to Rapidly Respond to Changes in Supply and Demand 

Operational Excellence Journey Differences

It is clear that not every company approaches Operational Excellence with the same needs or goals, and this manifests itself into important differences, including:

  • Areas of focus that vary by industry and specific business situation
  • Different associated goals, objectives, and KPI targets
  • Best processes and programs to utilize in order to meet the goals and objectives
  • Organizational capabilities and available talent
  • Technology strategy dependent on existing technology infrastructure and future needs

However, once a company chooses to focus on a particular critical area for improvement like customer responsiveness and the corresponding need for production agility, it is important that the initiative is supported with the necessary people, process, and technology capabilities and resources.

In my next blog post of this series, we will examine some of the “tools of the trade” to help you achieve operational excellence, as it relates to greater agility and responsiveness, the process approaches, the technology solutions companies are leveraging, and how companies are driving improvements in customer responsiveness related KPI’s.

We will also further discuss many of these critical people, process, and technology issues in the upcoming LNS Research webcast: “How to Accelerate Your Operational Excellence Journey,” scheduled to be broadcast on January 29, 2014.

Interested to learn more? Here is a link to a manufacturing operations management infographic containing more findings from the research just completed on this topic.

 

Mark can be found on Google+.

Permanent link to this article: http://www.apriso.com/blog/2014/01/every-companys-operational-excellence-journey-is-different/

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