Operational Efficiency – Power to the people.

There is an old adage in transport. You can have whatever you want, as long as you are prepared to pay for it. Truth be told it applies to most industries. If resources are unlimited, most demands can be met. But this set of circumstances rarely takes place. Perhaps an urgent order where a factory line has stopped or a sample for an important presentation. But the reality is the vast majority of operational activity is closely monitored and governed to make sure it is efficient.

But what do we mean by efficiency? Efficiency, is concerned with minimising waste or effort, whilst still delivering an effective outcome. Or more broadly managing systems and resources to deliver a product with minimum waste. This is known as operational efficiency. Where time and effort is spent monitoring reviewing and correcting performance using real time data analysis.

Technology has enabled us to utilise systems to manage this operational efficiency. Enterprise Resource Planning (ERP) systems for example are a trusted and reliable approach. Co-ordinating, calculating and then presenting the information to drive operational efficiency. The next steps are already being seen with the introduction of Artificial Intelligence (AI) to make decisions in the operational efficiency realm as part of the transition to a more digitalised workplace.

Whilst these developments are welcome, they do not guarantee that an operation is efficient. In-fact operations rely on a blend of technology and people, complementing one another to ensure that waste is minimised and customers remain fulfilled. Even in the most modern automated warehouses there are still inputs of people, whether that be co-bots (collaboration between human and robots), engineering, analysis and customer service, which can still influence how efficient an operation is.

Operations management refers to the day-to-day functions of a business that need to be run and people consist of a considerable element of this. Businesses are carefully organised and planned to ensure that the right resource is available to ensure the operation can be delivered. With systems suppliers spending considerable efforts in innovating to ensure their product continues to offer the efficiencies demanded, how have people faired?

Operations have introduced several interventions, which have impacted the people element

·?????? Off-shoring ?

·?????? Automation

·?????? Technology

·?????? Competition

·?????? Introduction of tools (lean, 6 sigma)

These trends have by and large kept operations efficient, by putting pressure on costs and benefitting from new methods and techniques. However, is there another way that operational efficiency can be achieved? Are missing hidden value, which if introduced could boost operational efficiency?

In the BBC TV comedy Little Brittan David Walliams delivers the infamous ‘computer says no’ sketch about a particularly abrupt and unhelpful travel agent. Why is it so infruitating? Mainly because the character does not seem to be able to think or question, just blindly referring to a system. Surely, humans are more capable than this? When it comes to operational efficiency people can bring 5 valuable contributions to meeting performance.

1)??? Skills of observation, information gathering and communication

The ability to look at key information, collate and ask questions is obvious, but so often underutilised. Technology will provide the information, but it needs to be interpreted, understood and in context. Only 25% of employees felt fully prepared to use data effectively according to a recent survey. (1) Training will tell you how an operation or system works, but what to do with the information is perhaps a little more subjective. Communication of these findings in both directions has to be clear and concise. Misunderstandings create confusion and waste resources.

2)??? Ability to look beyond the obvious, examine and fully understand information.

The ability to analyse something, by breaking it down, removing bias and look at the unconventional can help us spot issues, patterns and broaden general understanding on some of the operation’s features. Too often the adages of ‘it always does this’ or ‘this is how things are done’ means opportunities to identify waste and improve are lost. In addition, over-reliance on a system risks the ‘computer says no’ issue as above. Creating a level of complacency, which is hard to change.

3)??? Confidence to think ahead, remove silos and identify how resources can be used in a better way.

Operations departments can settle into a reactionary approach to problems. Often down to other pressures or underuse and examination of what the key performance information is advising them. By making time to step back and start to look at things unconventionally, to image and to be curious forms the basis of continuous improvement. Thinking differently can provide solutions to problems that have bedevilled a business. Innovation starts with thinking differently and removing pre-conceptions, allowing freedom to play with ideas and explore. “Insanity is doing the same thing over and over and expecting different results.” Observed Albert Einstein.

4)??? Confidence and ability to monitor, prioritise and plan effectively.

Once we have effective questioning, examining and understanding of key outputs we are in a much better place to build a way of working solution to constantly achieve operational efficiency. We can combine what we know from the outputs, with innovation from thinking unconventionally. We can monitor what is required to achieve business objectives and ‘think on our feet’ with unconventional solutions to solve real-time efficiency issues that are presented.

5)??? Ability to take a step back and learning lessons to achieve better outcomes.

We can draw conclusions and ask what we could have done better. This forms an integral part to an on-going commitment to operational efficiency. We can dig into outputs from operational systems and ask do they fit the brief? So, for example we may have introduce a new shift pattern, what impact does this have on minimising waste and maximising resource use? This is a key feature of learning and improvement. Without careful review of our progress how can we learn lessons and improve?

These 5 steps are where people in an operation can bring the most value for the objective of operational efficiency and (this is crucial) if used in conjunction with automation, technology etc. These are the attributes that humans are naturally more suited to. To question where things can be done better and thus boost operational efficiency. This goes to the heart of industry 5.0, which is rapidly approaching on the horizon.

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1.????? The Data Literacy Project – 2020

John Henderson – Co-founder and Director

Sara Penrose Ltd

Optimising performance through skill development

www.sarapenrose.co.uk

? Sara Penrose Ltd 2023