What's Your Imperative for Operational Excellence?
by Howard Coleman
This isn’t just another “what’s Amazon doing?” discussion. By all means it includes what your customary competitors are doing too.
Given the speed of change in wholesale-distribution, particularly in the business value every wholesale distributor will need to project, operational excellence (OPEX) will become more commonplace as a mission-critical objective.
It’s not new news that wholesale distributors operate in an era of frequent, if not constant and rapid, change. And the change seems to be moving faster, doesn’t it? Maybe even pushing deeper, isn’t it?
It surely opens up a raft of opportunities (and threats) that will need to be seized upon and/or mitigated. This is not just about the constant drone of Amazon you hear about, but what you can expect from your customary competitors who are already making the transition to a leaner speed-of-flow and a greater business intelligence utilization environment.
But what does the future hold? What are the trends that will drive fundamental changes to your ways of working?
Surely, this means continuing to make processes simpler, easier and better. But it also means going beyond those basics and looking at how technologies can enable new ways of delivering value, to the point of freeing up employees for more productive and creative tasks.
Successful business operations of the future won’t be driven merely by the principles of process re-engineering and function but will also incorporate design and form. It won’t be enough to have processes that merely work. Business processes will need to become engaging and more understanding of how to help people – whether employees or customers – drive the desirable outcomes. That’s the key! Those that anticipate and drive this future will most effectively deliver value to their organizations and their customers.
According to Innosight Consulting research, the average life span of an S&P 500 firm is 18 years today, down from 61 years in 1958. Maybe you are not an S&P 500 company, but by 2027, new firms will replace 75 percent of the companies that were in the index only a few years ago.
Maybe this will hold true, maybe not. But the overall message seems to be clear; it will impact the way companies approach process excellence in the near-term.
Some Predictions
- Prediction No. 1: Successful companies will manage their processes as strategic assets.
- Prediction No. 2: Flexibility will be built into processes to enable rapid business change.
- Prediction No. 3: Customers and employees will impact the design of processes.
- Prediction No. 4: Companies will (need to) dramatically increase investment in process automation capabilities.
- Prediction No. 5: Incorporating data into processes will be a key focus.
- Prediction No. 6: Getting the process basics right will be the critical foundation.
Process Capabilities of the Future
Over the next several months, we’ll be expanding upon these predictions in both of our scheduled newsletter offerings, MCA Talk and W-D Ideas@Work. Let me know if you would like to be added to our email distribution list.
For some companies though, this vision of the future is probably not substantially different from their current reality because they already view their processes as strategic assets. There are those who are already exploring new ways. There are already those who are innovating and improving processes from a customer’s perspective. And most likely, different companies will be dependent on their own market and industry forces that will affect how they design their processes.
Having a Solid Understanding of Process Change
A role that I think is sorely missing in most companies is one that I call a process facilitator. Maybe it’s in the information technology group, or maybe elsewhere.
It’s a person who looks at how all the different systems work together, understands how changes ripple through the network, and builds updates to form a more comprehensive, powerful system. It’s a process professional who leads, builds, maintains and adjusts the process framework and then calibrates the outputs to what customers want and need, those desired outcomes I speak of.
Finally . . .
Clearly it’s impossible to predict the future in its entirety, but it is possible to extrapolate how it might change in the future and how we might operate, how you come up with new ways of delivering value and improvements through processes, better, simpler, cheaper.
The trade-off of the time invested to yield cost savings and customer service advantages versus winning the battle with competitors that are trying to achieve the same goals requires enough foresight to see the value in dedicating the personnel and the investment in process improvement disciplines.
As the old saying goes, ”The only thing predictable about the future is that it will be different.”
So, start to plan now. How will you impact your organization and begin to orient the ship toward the future?
Interested in learning more about OPEX or adding your two cents? Let’s discuss.
Howard W. Coleman is principal of MCA Associates, a management consulting firm that works with wholesale distribution and manufacturing companies seeking operational excellence. MCA provides operational excellence – thought leadership – and implements continuous improvement solutions focused on business process re-engineering, inventory and supply chain management, sales development and revenue generation, information systems and technology, organizational assessment and development and family-business succession planning. Phone (203) 732-0603, or email hcoleman@mcaassociates.com.
This article originally appeared in the May/June 2017 issue of Industrial Supply magazine. Copyright 2017, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
