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New thinking in

Operational Excellence

based on real world

experience!

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“

What is Operational Excellence and why is it important?

Operational capability, performance and responsiveness can make or break any organisation, no

matter the size. Get it right and the organisation is enabled – customers want to do business with

you, staff are engaged, costs are optimised, profitability is enhanced and real competitive advantage

is enjoyed. Get it wrong or allow complacency to take hold and it can have far reaching detrimental

effects across the entire organisation, forcing an inward focus and inertia rather than meeting

market dynamics and allowing opportunities to be harnessed.

The achievement of Operational Excellence requires new thinking ... continuous improvement and

insular operational methodology are tools not the solution. Sustained peak performance lies in a

holistic yet pragmatic approach that encompasses both strategic and operational drivers,

understands the necessity of change and the importance of innovation when striving for the

competitive market advantage that Operational Excellence can deliver.

Operational Excellence defined…

Most organisations will likely never achieve their optimal level of operational capability nor realise

the advantages that can be gained. Their typical objective is an achievement of an acceptable level

of performance or an operational environment that is just ‘good enough’ to get the job done and

then park it. This mindset drives a cyclic reactive attitude to operating performance, only gaining

attention when operations critically impacts revenue, cost, the ability to function, or when the

business is under economic pressure. The objective then, is to quickly bring back performance to a

‘good enough’ or base acceptable level again.

‘Good’ is no longer ‘Good Enough’

Typically operational functions are

compartmentalised where

management is more often than not,

functionally siloed in their focus

and/or marginalised in their

influence. The mandate from the

organisation is centred on ever

reducing costs, reacting to service

issues, or on maintaining current

performance levels. This approach is

the road to mediocrity, complacency

and eventually decline.

OPERATIONAL EXCELLENCE – Is the achievement of an optimal operating environment enabling an organisation to achieve its strategic, functional and fiscal goals, while enhancing the customer experience and augmenting competitive advantage. It extends across the organisation, is contextual, dynamic, market and industry cognisant yet organisation specific. At the core of realising Operational Excellence is the ability to enact Strategic Operational Change and Renewal (SOCR).

Glen Reid - Strategic OPS Consulting

”

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We can see this across industries, sectors and organisations. Sales and distribution organisations

where revenue is king and end of month/quarter targets drives behaviour, often at the detriment to

the organisation in terms of cost and profitability.

This is equally apparent with operational and manufacturing organisations, where the focus is on the

function or product, centred on ‘continuous improvement’ and generally getting more from less.

While this has value, the issue is that it is often in isolation and to the impairment of strategic and

cross functional considerations never mind stakeholder, customer and market dynamics.

While typically this is more evident as we move through the operational performance curve, once

maturity is reached performance, capability and responsiveness plateaus. Unless there is some form

of intervention, they all ultimately decline and failure to address this will lead to eventual demise.

This decline can occur slowly over years or rapidly when the market or technology shifts or the

organisation fails to respond, or change, to meet key market drivers.

Operational Excellence changes the game!

Whatever the scenario an approach that is focused and targeted on achieving Operational

Excellence will create the opportunity to breakthrough this paradigm … a new trajectory of the

performance lifecycle will emerge.

Authentic Operational Excellence starts with the end in mind. It is contextual, situational, strategic,

organisation specific and market cognisant. It embraces the organisation’s holistic strategy and

translates it into functioning capability that supports and enables the corporate and cross functional

goals of the organisation, is responsive to internal and external stakeholders, addresses market

dynamics and enhances the customer experience.

It allows the organisation to be poised to realise and take advantage of current and potential market

initiatives. It drives increased profitability, optimises resource, minimises costs, and creates a

working environment that is confident, focused on results and enhances the customer experience.

At the core of the achievement Operational Excellence is the ability to attain dynamic optimal performance satisfying 4 key criteria. Strategic Operational Change and Renewal or SOCR is about achieving operational excellence by embracing the organisation’s holistic strategy and translating it in to tangible action.

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Strategic Operational Change and Renewal a new approach

Involves understanding the key challenges and constraints that the organisation is facing and then

taking action - aligning, enhancing and changing operational structure, process and functional

competency to dramatically transform performance and proficiency. Encouraging people

involvement, allowing for an informed workplace where expectations, targets, objectives are known

and anchored in approach, attitude and process.

Strategic Intent realised aligned | dynamic | responsive

Operational Performance optimised efficient | effective | sustainable

Change Execution mastery purpose | leadership | enacted

Renewal Evolution embedded challenge | review | renew

Strategic – Understand and encompass corporate and cross functional objectives when creating and

enacting operational strategy. The operational strategy harnesses structure, resource, people and

process to reflect a calculated, considered and purposeful approach to operational activity.

Outcomes and performance that satisfies, facilitates and aligns operational activity to these goals is

the objective

Operational – Performance optimised, efficient in cost, activity and resource while being effective in

process and function to produce the intended and required outcomes. Dynamic in response to, or

anticipation of, internal and external forces, sustainable in effort and providing consistent reliability.

Creation of an operating environment that is adaptive in resolving challenges and poised to grasp

opportunities while maintaining agility to meet shifting demand and activity. Open to advances in

technology and automation and of course measurable in terms of key drivers and KPIs.

Change – Fundamental to achieving Operational Excellence is change execution mastery. While

sound strategy, detailed planning and appropriate resourcing are required real operational change is

only truly enabled through gaining a human connection. Clarity of purpose, urgency, consistent

messaging, a results focus, stakeholder management and the resolve to see it through are vital. The

goal should be the creation of an informed workplace where the change is entrenched and

expectations, targets, and objectives are known and anchored in approach, behaviour, attitude and

process.

Renewal – Markets, customers and product offerings are like all things … they evolve, shift and

change over time, they too go through their version of the curve. The next step in Operational

Excellence mastery is renewal, focusing on operating innovation and cognisant of market and

industry opportunities. By creating an operating environment that embeds ‘Challenge - Review -

Renew’ as a mandate in operational methodology, formalised as part of the both cross functional

and corporate planning and most important of all embedded in culture and behaviour.

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Strategic Operational Change and Renewal in action

No matter your position on the curve, in practice, pursuing targeted Operational Excellence sets you apart in a crowded market. Strategic Operational Change and Renewal is the fundamental to realising the change organisations require to achieve Operational Excellence. The concepts of SOCR can be applied at any stage of your organisational evolution. Whether that be to Recover or turnaround performance, Improve capability and competence, Breakthrough outdated methodology, inertia or complacency and of course to Realise opportunity, position for growth to reset the curve’s trajectory.

Typical examples and applications

Major Operational and IT Salvage

The resolution of crippling operational, structural and staff issues experienced by $1.2b IT&T distributor as a result of a failed system implementation and automation program. The recovery saw a 20% increase in productivity, customer confidence return, major improvement in profitability, substantially reduced cost structure and self-sufficiency in system optimisation.

Turnaround and Rapid Recovery

Development and execution of turnaround strategy at major national transport company. The targeted areas included; service delivery, handling efficiencies, customer experience, cost structures and the engagement of frontline staff towards a common goal. The company achieved rapid recovery of their service capability, salvaged customer relationships, and realised planned synergies across merged business units. The bottom line impact saw significant cost reduction and a return to profit.

Supply Chain Optimisation

Achievement of significant cost savings and performance improvement across the European supply chain for a large scale NZ exporter. By consolidating storage sites at primary receiving ports, rationalising service providers, leveraging volumes, creating service level agreements and introducing performance measurement criteria.

Transport Savings

Major international organisation improve their Australian distribution and transport capability realising enhanced service levels and a 30% reduction in annualised cost.

Driving Synergies

Partnered the CEO of a venture capital initiative in developing a strategic business plan supporting the merging of two companies, driving structural and process change initiatives across customer service, IT, procurement, shipping, logistics, and transport.

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Strategic OPS Consulting

Operational Excellence A new, proven and comprehensive approach

Strategic Operational Change and Renewal www.strategicops.com.au

info@strategicops.com.au

61 2 9576 5985

Changed Business Model

Development and transitioning of a national recycling collection organisation from a fully outsourced business structure to a self-managed hybrid model supporting their continued growth and ongoing service commitment to their market and stakeholders. The client gained greater scalability and control with increased visibility of day to day operating activities and was able to realise significant cost savings, operational efficiencies and improved network relationships

Management and Frontline Staff Engaged

Led the divisional team of a major electronic consumer goods manufacturer in the development of a positive, commercially aware operational team environment where embracing change, delivering on their promise to customers and achieving revenue targets became part of the DNA

Transformational Change - Outsourcing

Outsourcing initiative from concept to completion - After 30 years operating their own logistics and regional distribution function large MNC electronics manufacturer outsources their Australian logistics operations to an external 3PL provider. Significant change leadership and project execution is required across both organisations in terms of in people, systems, process and stakeholders. A successful transition allow the organisation to leverage best practice, specialist competence and scalability while allowing management to focus on core activity, global strategic initiatives and meeting the local market dynamics.

Innovation in National Distribution

National spare parts distribution for business equipment service division, shifting from a national bricks and mortar branch network, to a dynamic field delivery model, allowing significant reductions in inventory, enhanced delivery times, and a 70% saving in fixed costs.