Beyond the basics: How operations executives can plan for growth

September 7, 2016

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By Albert Kent, John Ranke, Amandeep Dehal, and Michael Kinder

The bar has been raised again for operations executives. Gone are the days when an operations team’s core responsibility was to run a cost-efficient plant. Today, they are being tasked with growth.

Easier said than done.

Previous areas of focus – quality, service, inventory, and safety – remain critical, but are now seen more as bottom line requirements as opposed to indicators of success. As a result, operations executives must explore new ways to measure and increase performance. There are many ways to do this – Manufacturing’s New Imperative, PwC’s Strategy& discusses three:

  1. Create an “asset-right” production environment: A more formal analysis of what is essential to a customer in their production process can help reduce complexities, avoid unnecessary capital investment, simplify procurement and inbound logistics, among other possibilities, allowing local and regional practices to drive operations, as opposed to processes in place from operations teams back home.
  2. Implement new technology to monitor technology: Breakdowns or natural wear and tear happens, increasing overtime costs and wreaking havoc on production. With the increasing shift toward newer technologies, more and more manufacturers are looking at ways to monitor their machines through technology. Capturing data and understanding how machines are being overworked can help reduce the risk of bottlenecks, increase capacity, and maintain optimum service levels.
  3. Prioritize tax and value chain planning: Tax consequences aren’t always top-of-mind for multinational corporations when deciding where to build a plant or carry out various activities. Often, companies think about taxes only after incurring costs that could have been avoided through planning or after losing bids to more tax-savvy competitors. These operational decisions are complex, but critical to companies newly expanding into developing markets.

For operations executives, value creation is the name of the game. Our report addresses how to get started.

 

 

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