Effective Operational delivery
15th of March, 2022
Somebody once asked me if I was a surgeon. I was a little bit perplexed.
I had just finished a one-minute pitch about effective operational delivery. The person had thought I meant surgical operations and was curious to know why a surgeon was at a networking meeting! But that is another story.
I do talk a lot about effective operational delivery because it is just as critical to your business as an actual operation is to a patient.
It is the critical method by which your business delivers value to your customers.
As Business Owners we are all striving to find new customers to fuel the growth of our businesses. Therefore, we mustn't be dragged into fixing operational issues that are affecting our ability to deliver value to our customers. A slick operation is a significant element of your value proposition and a source of competitive advantage; where the ability to deliver on time, to the customer's exact needs, in the quality they need, at the price they need, makes you the number one choice in your market.
Businesses must spend time improving their operational effectiveness.
What do I mean by that?
All businesses deploy a lot of resources, often expensively acquired, that they have invested in to ensure that they can deliver the products/services that they spend a great deal of time marketing and selling. But is that investment in resources being properly utilised and efficiently used? Are they delivering value to customers?
One of the core services provided by my business, Secure Business Advisors, is helping Business Owners to assess the performance of their operational delivery processes, systems, and people. Are they efficient and effective?
We look in detail at four elements of the business.
First, we look at the capacity to deliver. Does the business have the capacity that matches its sales plan? If a business sells more than what they can deliver it has a problem, and their customers will know about it very quickly. If they sell less, they may have invested cash in resources that are no longer required. That cash drain can put the business at risk.
Therefore, your business must match capacity and demand, so that you ensure that they have the right resources in place at the right time, to deliver on time, to the delight of your customer.
Second, we look at resource utilisation. Resources, also referred to as assets, could be the Business Owner themselves, it could staff, it could be an important and expensive machine, a tool, equipment, software, and/or a system. Is this resource being utilised to its maximum?
Businesses must leverage their resources to the full, making sure that they're getting the correct return on the investment they have made. Analysing and understanding whether or not a resource is being fully utilised, and why it is not, is vital. Understanding current resource utilisation before investing in new resources is vital too. Perhaps the Business should continue to insource/buy that resource for a while longer until it is the right time to acquire it and bring it in-house.
A simple rule to remember: never invest in new resources unless you know that your current resources are being utilised to the full. You will be surprised how often this rule is forgotten.
Third, we look to ensure the resource is efficient when it is being utilised. Is the resource (or person) running at 100% output? Is the person efficient, or are they getting distracted and losing focus on the task at hand? Are the resources producing right-first-time quality? Are the machines/systems running at the correct output speed?
When all resources are 100% utilised and at 100% efficiency you have reached full capacity. That is when you should bring into place your investment in new resources. Assessing this in advance to allow that resource to be brought into place is, of course, vital.
Finally, we look at the supply chain. All businesses use supplies from third parties. These could be contractors who provide expert knowledge and/or outsourced services or it could be actual raw materials. Do you have high quality, high performing suppliers providing added value to your business? Are those sources of supply secure? Are these suppliers working on continuously improving their service to you?
Your supply chain should enhance and not hamper your ability to deliver value to your customers. In the same way, as you have a well-developed customer relationship management system, communications and processes you should also have a similar well-developed supplier relationship management system, communications, and processes.
Once these four areas have been maximised you have a firm foundation upon which to invest in business growth. During that growth period, these four elements of your business will be tested and stressed so time is continuously required in measuring and monitoring these elements.
Taking your business to the "next level" will require gearing up your operational delivery to deliver more with less. That will give you a higher level of profitability and help you to be the go-to business in your marketplace.
If you want help in examining the effectiveness of your operational processes, systems, people, and resources, I'd be delighted to help you. Please DM me. Thank you.
