The benefits of modern technology tools are unmistakable. Enterprise systems, highly specialized software, and artificial intelligence applications can provide greater business intelligence and more efficient operations.
However, even the most advanced technology tool won’t solve operational challenges if the foundational work isn’t done. New systems can’t solve bad practices. They can actually make them worse.
Before you invest in a new technology or attempt to optimize the systems you already have in place, assess your processes, customer needs and culture. Setting the foundation for digital change will not only make the technology more effective, it will also improve adoption and cross-functional collaboration.
Assess and Improve Business Processes
A new system can bring process efficiencies and tie systems together if you take the time to assess and improve processes before you set the requirements.
Map out your production value stream to understand the processes and product bottlenecks. Start with a simple flow chart following the product from raw materials to finished goods. And get validation from key stakeholders on the differences between ideal and actual procedures.
Once you have a documented process that everyone agrees on as a baseline, you can begin to analyze it to identify ways to improve it. Keep your organization’s priorities in mind. Companies have to assess, and sometimes re-assess, what they want to prioritize: productivity vs. capacity, customer demand vs. working capital, etc.
Beyond production, identify the handoffs and interdependencies that connect processes, data, and system interactions across the supply chain. Including supply chain, production, procurement, sales, and marketing in the discussion will allow more accurate sales and operations planning and integrated business planning.
Consider Customer Needs
Encouraging collaboration among all the different functions will also ensure that customer needs are considered. Segmented service levels can be a helpful tool. For example, not all customers need 98 percent OTIF (on-time, in-full) delivery. Some may allow more variability, giving production more flexibility.
You may even find customers to retire. When Integrated Project Management (IPM) worked with a global food company to improve slipping service levels for its best customers, a root cause was an overgrown product portfolio. Observing production and analyzing historical data revealed products with minimal and even negative margins. A team that included production, commercial sales, and strategy balanced that information with overall customer profitability, strategic importance, and working relationships. Customers were segmented and some were ultimately phased out.
Considering the customers with high margins, scale, or growth potential will help build technology requirements and optimize systems.
Leadership Drives a Culture of Improvement
Leadership is paramount to creating a culture of expected behaviors, consistency and improvement. If your organization has a history of failed implementations or change initiatives, trust may need to be rebuilt. Strong leaders combine people skills (e.g., empathy, discipline, selflessness) with clearly expressed prioritized goals (e.g., health and safety, performance, personal improvement, adaptability).
The companion to leadership is a continuous improvement operating model. Methodologies such as Lean-PDCA, Six Sigma, total productive maintenance, and daily direction-setting rely on strong operational fundamentals.
Regardless of model, plans are rarely fully realized because reality always goes off script. It’s leadership and culture that determine how you respond to deviations, reap the benefits of iterative improvement, and deliver success.
A Virtuous Cycle
When you do the foundational work, advanced digital tools enable process excellence, informed decision-making, and increased visibility into and control of your operations. And because the foundation improves the technology, the technology will improve the foundational elements in a virtuous cycle.
It is these building blocks, along with a culture of improvement, that will support your company’s growth and financial success.
