Operational Excellence.

In today’s competitive world, no company can prosper by standing still. Progressive organisations are constantly testing their “Operating Model” with a view towards doing things differently. Inspired companies look to transformational change rather than making many discrete incremental improvements to performance. To do this effectively needs a structured process and strong facilitation, a deep understanding of the industry dynamics and the ability to constructively challenge paradigms using insight and experiences from other companies and industry sectors.

A more creative approach to option generation but with a healthy check on feasibility often leads to break-through improvements.

Processes drive businesses and play a very important role in defining the culture of an organisation. Often processes have evolved over time with various work- arounds added to cover up the cracks.

Often companies can get by with weak processes using excess resources and non- value adding activity to cover the gaps.

Today this is no longer the case. Companies cannot carry resource over capacity and processes must be optimised to meet both the current and future needs of the business.

Taking an end-to-end value-chain approach using advanced techniques such as Lean Six Sigma allows subtle enhancements to be made that increase efficiency, optimise cycle times and reduce levels of non-value adding activity or as the Japanese would say “Muda”.

Most businesses are dependent on complex supply chains to deliver to customer requirements. This can drive up the total cost to serve, and ability to be both competitive and profitable.

Integrating and optimising the end-to-end supply chain, at a strategic, tactical and operational level is key area for focus for all businesses. This challenge is frequently over-layered by the dynamics of growth, acquisition, foot-print rationalisation – where the development of best industry practice needs to be scalable. Managing the trade-offs of service level, operational agility and cost to serve represent significant challenges.

Often we see significant organisational challenges in terms of aligning stakeholders in delivering required service levels at acceptable inventory holding costs, versus the need to optimise operational efficiency.

With constant restructuring and downsizing, organisations and people are under real pressure. Cost cutting is often done without any meaningful changes to existing inefficient processes, leaving process owners struggling to cope with day-to-day activities with reduced numbers of employees. This doesn’t have to be the case. If roles and accountabilities are clarified, and staff are given training and coaching in the tools and techniques they need, then capacity can be released to address the pressure points. For example, just look at technician productivity, which in Processes Industries runs as low as 46%.

Streamline, up-skill and give people accountability and you can look forward to a productivity surge and a more motivated workforce.

Nobody likes to do it…but everyone needs to. The key to getting it right is Strategy, Structure and Sponsorship. Too often decisions are influenced from a purely external perspective without fully understanding the on-the-ground reality. Leadership can no longer expect to dictate sweeping changes without giving organisations the framework required to make it happen. We have supported many cost reduction efforts from simple fine-tuning to full on crisis management. Whichever level of cost reduction is required, a visible and structured approach is required to look at the options in terms of financial risk, brand reputation, business exposure, implementation complexity and service / product disruption.

It’s often the case that the complex organisational structures of many companies create functional “silos” which limit the ability to optimise across the value chain. Add to this the increasing use of strategic partner / vendor relationships and the whole picture is extremely complex.

To combat this, we take an end to end process view of how an activity is performed and highlight where connection points need to be bolstered to maximise functional / geographical expertise. Often this involves dialogue with strategic service partners, who have significant influence on the efficiency and effectiveness of a company’s value chain.

CapEx projects in the industries in which we work are amongst some of the largest in the world. Bringing a project in on time and to cost therefore is a significant challenge. Too often we find that despite lengthy planning and preparation, slippage still occurs.

The reasons for this are never simple: Lead times often infringed by suppliers, poor information flows and communications, unclear progress and performance measurements are often some of the root causes. The key is to increase collaboration controls and visibility so that any slippage can be rectified at the earliest opportunity.

While Lean is most often communicated as a set of tools, it is most successful when it is considered as a comprehensive thinking and operating system. Too often, there is a clamber to train, train and train even more and then think that’s it done, that Lean will just happen.

Nothing could be further from the truth. Although the tools of Lean and OpEx are extremely important they need a structure which provides results focus and considers the human and tactical elements of the change process. Our Lean/OpEx programmes focus on targeted and practical deployment of the tools driving improvement activity in the context of the processes which staff use during their normal working activities, rather than classroom theory.

Sales organisations’ primary focus is about maximising sales volumes and values – supported by availability of product with short lead-times enabling excellent service delivery. Operational delivery in terms of manufacturing and supply chain delivery is often more focused on cost base optimisation, unit cost optimisation and working capital optimisation. Sales, Inventory and Operational Planning integrates the end-to-end process, managing the trade-offs between service level, operational agility and cost to serve enabling optimisation of the overall business.

Often there are significant organisational challenges in terms of aligning stakeholders and departments in delivering required service level and the associated inventory holding costs to support this, versus the need to optimise operational efficiency.

The old adage “what gets measured gets managed” holds true. The challenge however, is to build a set of indicators which are driven by the company’s strategic aims but are also operational enough to be meaningful at all levels of the organisation. We typically create a highly visible performance management system which includes KPI’s, meeting frameworks and formats, decision making processes and accountability matrices. This gives clear line-of-sight on actual performance levels, highlights the root cause of issues and allows meaningful trending and benchmarking across the business.

Our experience is that maintenance in many industry sectors continues to be driven by a reactive first line policy. Why has this happened? Our view is that as critical assets fail, companies created PMR after PMR until the root cause of failure is lost. Therefore as PMR backlogs increased to an un-manageable level companies focus predominately on reacting to equipment failures.

We believe there is a way to break this vicious circle by focusing on criticality and using a broader group to utilise RCM /FMEA techniques and get maintenance and its associated costs under control and balanced to business requirements. Driving efficiency execution in parallel also supports increased capacity.

Major transformation programmes are by their very nature multifaceted. Often with differing cultural dynamics due to multi-geographic locations or varying and sometimes conflicting stakeholder goals, the need to navigate these complexities is a major challenge. Add to this huge amounts of activity then there is an obvious need to get the critical path right, have communications to those involved clear and transparency of progress and any barriers to progress highlighted. One aspect which is sometimes overlooked, is the tactics involved with ensuring that stakeholder groups are aligned around a common propose and set of goals.

We bring a suite of tools and practical experience which will drive a complex change programme.