Business Alignment & Turnaround (Part 2 of 4)

QUESTION => Manufacturers – Are you achieving 500% + on Overall Equipment Efficiency?  Are you achieving the planned ROI?

This week, we will focus on the management domain criticality of FINANCIAL PERFOMRANCE and MARKET NEED.  We dive into their affect on achieving business goals and growth.

Financial performance of course is a cornerstone of why the company does what it does.  It is the end to a means of being part of the manufacturing community and contributing to push the economy forward for growth and sustainment.  All fancy words and an aspect that business owners already know.

So, what about it you may ask?  Well, our focus in Part 2 of this mini blog series is talking about some parameters of performance associated with the business objectives.  Operating income (OI) levels should be well established on every product and service you offer.  That is the life blood cash you need for sustainability, investment, strengthening, market positioning and growth.

If you have been reading our blog series over the past three months, you will see that question on ROI being repeated.  There is a reason for that and everything we discuss in our articles are linked to that level of return objective.  Everything we do on a daily work basis affects that figure.

Ask yourselves, do we have an overall equipment efficiency (OEE) process?  Does our factory workforce know what it means and what affects it?  Having a strong OEE is directly responsible for making the ROI targets leadership sets forward as part of the business model, strategy, and business plan.

Leadership needs to also ask, does the managing principles within the functions have a common understanding of OI across the organization?  If not, then the troops are likely marching in different directions getting in each others way.

Cost – cost – cost.  Management and leadership are always focused on the end game of cost.  Focus such as – How do we reduce cost, what are you doing about cost reduction, what is being done to drive cost out of the supply-chain supplied items, are we reducing head count, are we cost efficient, etc ……

Well, cost savings on production stems from a good design, good manufacturing practices, the right tool for the right job, the right cohesiveness of your workforce, solid operating processes, lean operating environment, and many others.  If you are looking for and OI improvement, the trenches are where waste lives.  Go get it, unearth it, do something about it that is in line with the business strategy and objectives.  Be clear on the organizations purpose of being.  We have mentioned this a number of times in our previous blogs.  We can go on for days on this subject.

Let’s move onto MARKET NEED.  Market need is absolutely of paramount importance for a company’s business strategy, objectives, direction, purpose of being and what it needs to do.  If an organization is not crystal clear on why they are producing what they are producing, then the product and service line needs to be realigned.

In a past blog, we cited the Blockbuster-Netflix example and failure to have clarity on the market need.  It is key to be a ‘sort of speak partner’ in what your customers are doing, working toward and providing those deliverables to the marketplace.  As in the aforementioned of Blockbuster, the failure to recognize that VHS, DVD, Blue Ray would soon become the predecessor to streaming digital entertainment was catastrophic.

Over many years of manufacturing management in a high-tech industry, one learns that if you stay in step with what your customers are doing in Research & Development, it will be a barometer for what your organization should be doing for long term market positioning, sustainability, and growth.

By doing so, the product and service roadmap of development for your organization reveals itself to feed the business planning strategy.  In the end, business planning strategy it is not all that difficult if leadership are using the information and tools that are around them.

We look forward to your thoughts on this subject and we hope you are intrigued to stay tuned over the next two weeks rounding off our miniseries on the Business Alignment and Turnaround principle.

Next week, we will tackle the associated domains of S.W.O.T analysis.  Until then, happy strategic planning.

We encourage you to reach out to us on this topic.  We are practitioners with a true passion to help manufacturers like you meet your objectives.  It costs nothing to enquire and we wager that you will be glad that you did.