When life gets back to ‘normal,’ do you want to go back to being the same? Or would you like to come out the other side of this storm, a changed person or business, a little better, healthier, wiser?
Almost overnight, the game has changed for leaders and businesses. Pre-pandemic, we seemed to be in a relatively stable world where many factors were known. Growth was relatively predictable and achieving success for some was the pursuit of perfection. Our ships were merrily sailing across the oceans delivering “Made in China” products to consumers at an increasing rate and profit.
Many leaders are currently in the middle of an emergency management situation for their countries and businesses and perfectionism has been thrown out the window in some cases.
Due to the uncertainty, leaders across all industries are adjusting strategies and supply chains, rewriting the rules of operating, and sometimes making things up as they go. This kind of leadership demands mental agility. However, there is a challenge: our minds are not naturally built for agility
How does Operational Excellence come into play?
Well-run Lean organizations utilizing Operational Excellence techniques will successfully weather this pandemic because they are superb problem solvers and able to manage in a crisis. No doubt, these Lean organizations will not only conceive the means to manage through the crisis but will emerge even stronger when the world comes out of it. They are the businesses when performing their daily work that focus on eliminating wastes and maximizing value to the customers because value is what customers need and expect and are willing to pay for.
Those businesses with simpler systems, processes that are mapped and have governance alongside their culture of innovation are lighter on their feet. They are faster at making decisions, meeting customer needs, and getting value from new products and services. This will matter even more as they look to turn this crisis into recovery.
Some leaders have a natural tendency in a crisis is to hunker down and retreat. Now is not the time for this. Now is the time for laser-like focus. Follow the lead of Jack Ma, founder of Alibaba, who only looks to hire people smarter than him. Surround yourself with smart people. Create an environment for ingenuity by empowering teams to be innovative within the framework of operational excellence. This is especially important when so many people are working remotely.
What is your plan?
If your organisation has an Operational Excellence plan today, it is time to evaluate it. Leaders will need to have the willingness to make changes to this plan and potentially walk away from it and start a new plan. The two most important questions that must be asked:
1. What must we stop doing? (So, we can move our focus elsewhere)
2. What must we start doing?
A clear definition of what recovery means for each leader and organisation will make the answers to these questions easier to find.
Organisational alignment is essential
This recovery plan must be aligned to the organisation. Once developed, it will be important for leaders to step back and evaluate their organization through the lens of the plan itself.
1. Will there need to be a new structure?
2. Will additional capabilities need to be injected?
3. Are the processes outlined in the plan appropriate going forward?
To become better, faster, and cheaper, leaders need to ensure that everyone in the organization is willing and able to do well to be operationally excellent everyday. Whilst planning the deliveries on those ships sailing across stormy seas delivering their products no longer “Made in China” to consumers who purchase online and work from home.
To quote the famous Japanese author Haruki Murakami: "And once the storm is over, you won’t remember how you made it through, how you managed to survive. You won’t even be sure, whether the storm is really over. But one thing is certain. When you come out of the storm, you won’t be the same person “or business” who walked in. That’s what this storm’s all about."
Let us hope this storm blows over soon and our businesses have become a little better, healthier, and wiser.
First let’s start with the Sales and Operations Planning (S&OP) process that is focused on internal processes aligning business objectives with operations. It has been around since the 80’s however Supply Chains using S&OP have experienced gaps, recognising the growing need for more collaborative planning practices aimed at better influencing and managing demand. S&OP has evolved into Integrated Business Planning (IBP) driven by the development of more scenario planning and what-if capabilities, to allow visibility of the impact of supply and demand changes so that plans may be adjusted accordingly.
IBP offers a solution to working multi-functionally within a company rather than in silos. Using IBP a company is able to service customers more efficiently and profitably with people, processes and tools that are integrated and aligned. People in any organisation are key drivers for business success so managing their behaviours is vital to cultivate an environment for change. When people are trained and working to a common set of goals then an organisation may be fully aligned to execute their strategy more successfully a truly positive outcome from IBP.
Benefits driving the development and use of IBP are better control of costs, higher customer satisfaction and short-term changes have less impact. The result is that the actual need for changes can be effectively planned for and proposed to those customers who have fluctuating demands, in a controlled cost-effective way.
The IBP process involves plans being developed medium term, from 18 to 24 months, allowing organisations to model
- How using lean tools can deliver results
In today’s economic environment all companies are trying to cut operational costs. Achieving this goal, along with maintaining or improving customer service, is something most find out of their reach. For many hotels improved back of house or F&B service productivity remains a goal, not a reality.
There is constant pressure placed on hospitality businesses to improve their labour efficiencies, due to competitive customer demands, which are constantly challenged by dynamic changes in costs. These costs can range from food price fluctuations to increases in salaries. In fact, these operating stresses are increasing, as more efficient operations become the norm to be able to compete in the hospitality industry.
It is important therefore to take a step back and look at efficiencies and productivity in hotels from all angles. These 10 tips are written as an introduction to the benefits to be gained by applying Lean Tools to find efficiency improvement in hotels.
1. The aim of Visual Management is to make the situation easily understood merely by looking at it. The goal is to have information quickly with as little observation as possible. Visual management done well means it’s easy to understand the flow of work and how it is progressing. It can be understood if there is too much inventory in a laundry store for linen at a glance or if work is being done under normal or abnormal conditions whilst washing the cutlery and crockery.
The benefits of adopting the 5 step Lean transformation model in the hotel industry for improving customer value are not widely known. Manufacturing has, for many years, benefited from using the Lean transformation model first proposed by Womack and Jones in their book on Lean Thinking to optimise their operations.
1.Firstly Identify value from the perspective of the final customer by identifying and describing operational processes according to value added activities. By expressing value in terms of a specific product meeting the customer's needs at a specific price and at a specific time the first steps to removing waste have been taken. For example describing the complete food and beverage procurement method or how room reservations are processed will give a base in order to start mapping the value stream.
Operations Excellence starts with a clear strategy linking into a relentless passion for operational improvement that is missing today in many organisations. In order to have a successful implementation and reap the rewards, your organisation has to be ready. The move to Operational Excellence across any business requires a continuous improvement culture to be in place. This checklist will help you determine if your organisation is equipped to launch an OpEx program
1. Culture. Ensuring the organisation has a culture that will support OpEx is critical. Consistent with obstacles often found in organisations undertaking change of this nature, we have identified four major cultural barriers:
• Complacency – the belief that things are good enough as they are.
• Low expectations – the belief that things cannot get better.
• Learned helplessness – the belief that people within the business cannot influence change.
• Passive acceptance – the leadership behaviour where leaders ignore non-compliance to standards.
This requires building excitement around the program to generate buy-in. The OpEx program needs to be relatable so employees can feel they’re a part of the effort.
First let's ask What is a Supply Chain? In theory its a collection of suppliers required to create one specific product for a business that is applicable for all industries be it manufacturing or service industries like hospitality. The chain is made up of nodes or “links,” which can include multiple producers for component parts, then the completed product, followed by the location or warehouse where it is stored, then its distribution centres, and finally, the point where a consumer can purchase it.
The concept of the chain is important because each link is connected in a specific direction and order, and the next link cannot be reached without going through the previous one. Each link adds time and costs, and may involve labour, parts, and transportation. Every product a business carries may have its own supply chain, though they may use certain suppliers for multiple products.
Moving to a best practice supply chain requires alignment to the seven key supply chain principles. Think about how your supply chain is set up today. Are all the links in place? Has the waste been removed to allow an uninterrupted flow of products and information to give the customer the service they expect? If not contact us to arrange an audit of your supply chain to find the opportunities for improvement and start your journey to having a world class Supply Chain.
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