In a 2017 survey by LEA Global, 47% of all respondents identified cutting operational costs as a top priority for 2017.
The emphasis on achieving higher efficiency may be slightly higher in low-growth companies, but can also be observed in the attitudes of high-growth companies, 44% of whom identified R&D as their top priority for the coming years.
THE ROLE OF R&D IN PRODUCTIVITY GAINS
When it comes to R&D, the majority of high growth companies plan to invest between 1-5% of their revenue. This investment is expected to lead to improvements not only in product, but in people and processes, resulting in productivity gains.
In this whitepaper, we explore why increasing operational efficiency has become increasingly top-of-mind for executives across the manufacturing industry, and the steps company leaders are taking to stay competitive in an ever-innovating market.
THE BENEFIT OF INCREASED INVESTMENT IN SOFTWARE
38% of survey respondents identified plans to invest in software in the coming year. And those plans aren’t without good reason.
According to one 2015 survey by LNS, companies who invested in manufacturing operations management systems saw an improvement of Cost Per Unit of 22.5%, On Time Delivery of 22%, and Net Profit Margins of 19.4%.
“COOs are being asked to actively invest in new technologies to ensure they are getting the biggest bang for their bucks from analytics, operational improvements and enhanced innovation.”
– PWC, Industrial Manufacturing Survey
OPERATIONAL AND EXECUTIVE ALIGNMENT
In recent years, the manufacturing landscape has become increasingly competitive, resulting in CEOs becoming increasingly focused on operational performance and efficiently delivering to customers.
From an operational standpoint, this means the executive department and the operations department have never been more closely aligned. As it stands, in order to executive goals to be met, operations departments must be performing at the highest caliber.
LEVERAGING SOFTWARE TO INCREASE EFFICIENCY
As noted in one LNS survey, the benefits of implementing a manufacturing operations management solution not only result in improvements of Cost Per Unit and Net Profit Margins, but also contribute to organizational efficiency in a variety of ways, such as:
- One common user interface across the enterprise
- Elimination of duplicate input
- Integrated interdepartmental information
- Platform of interdepartmental collaboration
- Closed-loop quality management
Benefits like those listed above play a major role when helping large organizations shift from “what have traditionally been considered ‘fiefdoms’,” according to PWC ‘s 2015 survey.
FOR MANAGERS, BENEFITS BEYOND OPERATIONS
Beyond a sheer operational efficiency standpoint, technology that contributes to increased accountability and interdepartmental collaboration simplifies the day to day work of directors of operations and COOs at manufacturing companies.
By providing a “single source of truth” for departmental updates and progress reporting, user-friendly platforms like Priority Matrix save operations leaders hours of valuable personal work time per week, which can be re-invested in continuous process improvement.
On the next page, learn more about how Priority Matris supports directors of operations and COOs in the manufacturing sector.
HOW DOES PRIORITY MATRIX HELP?
Priority Matrix is a platform that provides Directors of Operations and COOs visibility of activity across departments.
As a result, operations leaders can drive process improvement by identifying inefficiencies and providing a platform that allows teams across the organization to operate more effectively.
Priority Matrix provides:
- A shared priority list across departments
- A high-level overview of project status
- A platform to track staff performance
- The ability to delegate while maintaining visibility
- A platform for more effective communication
- The ability to combat operational inefficiencies through improved knowledge of the root cause