The plethora of business philosphies, models, methods, tools and techniques that currently exist in the world of operations has led to confusion about what world class operations capability is about in these uncertain times. The fact is that there is a lot of overlap between these schools of “operations excellence” thoughts. In my mind, the key ingredients in all these school of thoughts can be summarized into few key points.
Combining Marketing and Logistics excellence
My this article focusses on two aspects:
- It summarizes the key capabilities needed for operational excellence from my perspective
- It highlights how some of these capabilities can be categorized into Marketing, others in logistics and how combining these two excellence capabilities will yield real world class operations capabilities. There are three different orientations, shown in the illustration below, that each of the operating capabilities fall into.
The core of operations excellence in my mind is the ability to create a value. Whether you selling a product or service (Logistics Services), there is a certain “value” that your customers need to see. Companies that lose this focus can not stay competitive, despite developing world class systems and Supply Chain capabilities. So the first two principles of operational excellence are:
1. An ongoing focus on understanding what customer value represents.
2. A relentless pursuit in translating this understanding to the provision of unbeatable order-winning customer value, so end customers perceive they are the supplying chain of choice.
The marketing excellence focus of Marketing excellence needs to be complemented with Logistics excellence. The key principles that an organization need to follow in my mind to develop logistics excellence are:
3. A recognition that how the process of Supply is undertaken can provide a considerable contribution to the make up of end-customer value.
4. A belief that every effort should be directed to Supply process design and improvement.
5. A shared recognition that performance measurement and feedback should be designed to support this endeavour.
6. An understanding that leadership is required to set the course and to coordinate activities in all efforts to achieve great operational capability in the Supply process: logistics excellence.
Organizations that are winners are those that combine Marketing focus with Logistics excellence. This ensures that the overall operating capabilities of an organization is aligned with the operating strategy- which in turn is aligned with corporate strategy. Therefore, the final principle of operations excellence that falls under hybrid excellence is:
7. An appreciation that the development and control of great operational process capability requires integrating with and being an integral part of the overall business strategy.