As market conditions shift and competitive pressures intensify, so companies have to adopt new strategies. That, in turn, means they need new operational models to accommodate these new plans.
But rising volatility and business complexity have recently made operational transformation much more difficult. And, as another three billion consumers join the global middle class in the next few decades – straining far-flung supply chains –conventional operational models will come under increasing strain.
In a perfect world, a company’s day-to-day operations are managed for peak performance, so that it maximises its profits while minimising its risks, costs and losses. But in the real world management must make constant trade-offs in the risk-cost-loss equation, if it’s to keep the company’s operational infrastructure aligned with its current strategy. To strike the right balance, management must be crystal clear about its operational goals and develop key performance metrics that will enable it to manage those operations within well-defined tolerances.
Companies in a wide range of manufacturing and service industries are reshaping their operations to make them more agile, flexible and responsive to changing market conditions. That’s no easy task.
Over the past decade, most manufacturers have generated major business benefits by reducing operational waste, variability and inflexibility. But many companies have been unable to build on these gains because they haven’t developed team leaders who can do three things: continuously identify and make efficiency improvements; align the corporate vision with activity on the shop floor; and demonstrate the technical and interpersonal skills that will help establish a lasting culture of operational excellence.
Creating an agile operation in the services sector is an even bigger challenge. In factories, idle workers and stacks of inventory provide clear signals that an operation is poorly designed. In service operations, by contrast, it’s often difficult to identify waste and inefficiency. Management may be aware of operational problems without being able to define them in detail, let alone design ways to correct them. Yet failure to understand how well its operations are functioning can be fatal to a service provider.
17 Sep 2015
PwC’s Growth Markets Centre report, ‘Bridging Growth Markets’ Voids’ analyses how companies can overcome the institutional voids of Growth Markets to achieve long term profitability.
10 Sep 2015
Evolving trends are changing the way tax functions are operating – both day-to-day and with long-term strategic planning. Are you prepared?
11 Aug 2015
Are CEOs ready for the era of automation? Find out in our CEO pulse on robotics
26 Jun 2015
The global alternative asset management industry is expected to experience a period of transformation over the coming years. Are you ready?
30 Mar 2015
The changing shift in focus of COOs in the industrial manufacturing sector based off of PwC’s 18th Annual Global CEO Survey.
02 Mar 2015
European cities hotel forecast 2015 and 2016 analyses trading trends and gives econometric forecasts for 20 cities, all national or regional capitals.
23 Feb 2015
Welcome to Metals Deals: Forging Ahead 2015 outlook and 2014 review, PwC’s annual analysis of deal activity in the metals industry and our outlook on the prospects for dealmaking in the year ahead. We also take a regional look at what is happening in the main markets around the world.
12 Feb 2015
What do thousands of shoppers around the world reveal about their purchasing preferences, use of different shopping channels and expectations of retailers and how does this impact the retail business model? Explore PwC’s Total Retail Survey.
09 Jan 2015
Growth itself is a big challenge for many airport operators as they strive to expand infrastructure capacity to match demand.
05 Jan 2015
Growing optimism and slow recovery characterize the various shipping sectors in 2013.
15 Oct 2014
The treasury function is changing, raising some pressing questions about companies’ organisational structure, treasury reporting and systems, oversight and control.