March 1, 2016 / benchmarking, best practices, continuous improvement, Cost Management, industry news, LIT, operations metrics, strategic planning
Today’s industrial metal-cutting executives face enormous challenges. While the goal has always been for manufacturers to do more with less, that expectation has intensified in recent years. Increased pricing pressures, global competition, and customer expectations are just a few of the current issues that are putting a strain on even the most efficient metal-cutting operations.
This has pushed many companies to look for new ways to manage their operations. In fact, a Global Operations Survey from PwC found that industry leaders are “reimagining operations” by aligning it with business strategy.
“These leaders don’t think of operations as mere utilities,” the PwC report states. “Instead, they see new opportunities to drive their company’s destiny like never before. They are cultivating a coordinated set of operational strengths based on what customers want and what fits with company strategy.”
After surveying more than 1,200 operations leaders across various industries, PwC uncovered several trends that are shaping the way companies are running their operations. Below are the report’s four key insights:
- Knowing what customers value is a real and persistent challenge for operations executives. This can make it difficult to set priorities, manage costs in a strategic way, and choose the right tradeoffs when necessary.
- Companies plan to do more than just improve existing processes. Today’s leaders are looking for ways to transform their businesses without letting day-to-day performance slip.
- Operations itself is being reimagined. Leading companies realize they need a model that aligns operations with business strategy and helps them stay resilient in the face of significant change.
- Strategically aligned companies are more confident and more likely to focus on a few differentiating capabilities. When taking this path, there are two dimensions to consider: what customers value in your chosen markets and your company’s existing operational strengths.
One of the studies most important suggestions was that companies need to design their operations around their customer. “Without this understanding, we often see operations stretched too thin,” Mark Strom, PwC’s Principal and Global Operations Leader, told Supply Chain Management Review. “When one team tries to innovate, they come in direct conflict with an operational assignment to cut costs – or they create some new complexity that’s harder to manage.”
Another takeaway from the survey was the importance of collaboration within an organization. Hyper-efficient silos, the report says, should no longer be the goal. In fact, PwC found that 61% of operations leaders believe cross-functional collaboration has the greatest potential for helping the company reach its strategic goals.
While the PwC survey was done across geographies and industries, research specific to industrial metal-cutting confirms that new approaches to operations management can offer tangible benefits. For example, data from a benchmark survey of leading fabricators, metal service centers, and other metal-cutting organizations suggests that companies with high machine uptime can gain efficiency by investing in smarter, more predictive and more agile operations management approaches.
Specifically, the survey found that 67% of industrial metal-cutting operations that follow all scheduled and planned maintenance on their machines also report that their job completion rate is trending upward year over year—a meaningful correlation. “The implication is that less disruptive, unplanned downtime and more anticipated, planned downtime translates into more jobs being completed on time,” states a summary of the survey findings.
Is it time for your organization to rethink or “reimagine” its approach to operations management? Based on the findings of the aforementioned studies, there are a few questions today’ managers should consider:
- Could you encourage better collaboration among departments?
- Could your customer play a larger role in your management decisions?
- Could you use more predictive strategies to minimize downtime?
If the answer to any of these questions is yes, then perhaps it is time for a change.