So what does Operational Efficiency really look like?
The past couple of months have seen businesses scrambling on how to keep their businesses afloat or possibly taking advantage of opportunities that have presented themselves during the crises. Its been quite amazing to see how in some cases, ‘operational efficiency’ has somewhat been aligned with cost cutting in different areas like slashing number of employees, reduced production activities, reduced R&D and even postponed on investments due to the uncertainties of what lay ahead. Yet in other cases, businesses approached their operational efficiency by grabbing talent that was in surplus and even made purchases in machinery leveraging on seller’s willingness to make a sale at any cost.
So, what really makes a business have the right kind of operations to steer through the waves of crises. Our take is that such decisions must include a mix of both cost cutting measures and investments that are informed by proper process analysis and data evidence on the how and when.
Cost cutting for improved operational efficiency is best achieved when an audit of business processes has been adequately reviewed against outcomes and have identified targeted areas for improvements based on data assessments. Such audits may reveal where there is an excess or redundant capacity, or it may reveal that a mix of human and technical interventions will yield more impact and performance.
In a competitive industry, businesses need to be practical about their sustainability and provide value at a price that is appreciated by the market/customers. This means your output might be great but may have been developed at such a cost that is just not acceptable to your market. So hear comes your decision: How to I make my operations efficient! Know fully well that mere incremental process automation on its own is not the answer but a rework of how the process of transforming your inputs into outputs can best be delivered; in other words, re-engineer your business processes.
Adopting a transparent assessment of your processes through Data Analysis can help address any tunnel vision probabilities, risk associations and improve the chances of identifying the most appropriate mix of cost cutting measures and investments to be made.
Once this approach is accepted, your business operations take on an image of smoothness and adaptability to the vagaries of the business environment whilst also optimized for growth and opportunities.