Operations Excellence
Operations excellence results in the attainment of world-class quality and productivity in the production and delivery of goods and services to customers, at competitive prices. It is one of several ways that firms can establish competitive advantage, along with other abilities such as superior innovation or unusual flexibility to customer needs. Fortunately, it is also an area in which almost every firm can improve; a common example is the process of achieving the operational advantages of size as a firm grows from a start-up or niche player to a scale competitor in an industry.
Our Experience in Operations Excellence
While every industry has inherent profitability characteristics, we have found that there are almost always clear winners and losers therein. Management performance in the execution of appropriate business plans usually defines these differences in profitability. We works with clients to develop a clear understanding of their operating practices and associated costs, particularly relative to competitive firms. In conjunction, we prioritize these drivers of success to help clients achieve a superior competitive position. Vital to this process is understanding the economic advantages of scale and scope, and increasingly, the use of information technology in creating competitive advantage.
Tools for Improvement
Business Process Redesign
Business process redesign is a specific type of reengineering and, contrary to conventional wisdom, the least radical. It involves redesigning existing processes to make them more efficient, often to improve quality or service or else simply to lower costs. A process is only worth redesigning if it is still worth doing; a firm must first assess its strategic objectives and capabilities, only then setting about designing a system to accomplish its goals. Process redesign should entail analysis and optimization based on both physical product or service flows as well as financial ones.
Our Experience in Business Process Redesign
Our approach to process redesign involves assessment of present-mode operations vs. future mode, quantification of the full financial upside potential and the development of a sound, results-driven implementation plan. Specifically, we seek to analyze and quantify both the changes in the process itself (cycle times, defect rates), as well as the costs. Finally, we complete each business reengineering engagement with a detailed quantification of the real financial impact of our work, and are often involved in helping clients implement the recommended process changes.
Cost Reduction
Cost reduction possibilities come in many forms, and focusing the firm's efforts on the most value-yielding targets is often the biggest challenge for management. Rooting out non-value additive costs begins with an understanding of the underlying cost structure of a firm and its competition. Cost reduction can focus on many aspects of a firm's operation, including manufacturing, operations, distribution and selling, marketing and research and development.
Our Experience in Cost Reduction
We often approaches cost reduction efforts with an "80/20" perspective (or Pareto analysis) that is deeply rooted in our culture: a belief that 80 percent of the benefits may frequently be derived from 20 percent of the subject under consideration. We use tools such as thorough, quantitative analysis of the client firm's overall financial position, competitive market dynamics, activity-based costing and cost position relative to best demonstrated practices. We have demonstrated an ability to routinely help clients discover and correct meaningful cost inefficiencies quickly and often in the early stages of a broader case analysis. We complete every case involving cost reduction with a thorough quantification and presentation of savings realized.
Cycle Time Reduction
Cycle time is commonly used in manufacturing environments to define the period of time between the receipt of an order from a customer and the completion of the order's production and/or the delivery of the product to the customer. The reduction of cycle time has many benefits, including increased customer satisfaction, reduced work-in-progress inventory and associated costs and a more rapid cash flow cycle.
Our Experience in Cycle Time Reduction
Virtually all of our work with clients involving operational excellence involves consideration of operational metrics such as cycle time. We seek to help clients reduce cycle time through analysis of the current process and the identification of the most highly leveraged steps. We then value opportunities to reduce bottlenecks from a financial perspective. Today we are devoting considerable resources to helping clients in almost every industry understand the impact of e-commerce and the Internet on improving operational flexibility and responsiveness.
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