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Nick Henderson Jan 5, 2022 4:25:22 PM 8 min read

Big plans for 2022? Time to sharpen your operational excellence tools

It’s the time of year when the crystal balls come out. Predictions for 2022 are everywhere. But how do you turn those big ideas into action? The answer lies in operational excellence. This is where operational excellence tools become crucial.

The operations function is the engine of change. It is the driving force behind successful customer interactions, sustainable activity and the ability to adapt to changing market forces.

The vital role of operations in enabling businesses to meet current challenges and achieve growth is becoming clearer. Partners at McKinsey recently summed up the importance of a new operations agenda. “The ability to execute in a complex, uncertain and rapidly evolving environment is set to become a decisive competitive differentiator in the coming years. Companies will need both the resilience to ride out shocks and disruptions and the agility to exploit emerging opportunities. They will also need to master fast, effective, coordinated, and large-scale change,” said the authors.

But they went on to say that a new focus on operations would be necessary: “These attributes can’t be bolted on to brittle, inflexible, slow-moving operating models. Instead, they must be built into the organisation’s structures, processes and people.”

So what are some of the biggest predictions for 2022 and how can operational excellence tools help organisations rise to the challenge?

Sustainability depends on better operational excellence tools

From the COP26 summit to the Don’t Look Up movie, there is mounting pressure on organisations to help reduce the impact of the climate crisis. It is not only a moral responsibility but a growing regulatory obligation, with companies facing government demands to publish details of their environmental performance.

Companies will also be aware that sustainability is increasingly influential on the choices of consumers and investors. Almost a third of consumers surveyed by Deloitte are highly engaged in adopting a more sustainable lifestyle, while 22% of investors are now integrating ESG (environmental, social and governance) considerations into at least 75% of their investment portfolios. And these figures are widely expected to rise.

Achieving ever higher sustainability standards will require companies to go beyond the obvious energy savings. A lot of that low-hanging fruit has already been picked. It’s no longer just about lightbulbs but taking a comprehensive look at sustainability across all business operations – from decarbonising the supply chain to eliminating unnecessary waste.

Sustainability has to be embraced into operational excellence. The operational excellence tools that organisations adopt must provide visibility over areas that have previously been hidden from view. At Checkit, we call these ‘dark operations’. And it’s not just about generating data but providing actionable insight that opens up new pathways to improve sustainability. For example, cleaning regimes can be based on the actual usage of facilities rather than basic hourly schedules, thus saving time and reducing the unnecessary use of products that may damage the environment.

A new age of human – machine collaboration

The world’s appetite for improving productivity, efficiency and speed means that robots and artificial intelligence (AI) are a growing presence in a range of organisations. And adoption is set to accelerate in 2022.

Gartner predicts that global AI software revenue will increase by 21% this year to hit $62.5 billion in 2022.

However, we’re a long way from people’s jobs being replaced on a major scale, particularly in sectors that depend heavily on human interaction, such as healthcare and hospitality. Indeed, many of these sectors are already facing acute staff shortages, making the at-work experience of employees an even more important area of focus.

Moving into the future, operational excellence will grow from closer interaction between humans and technology. Operational excellence tools should be designed to promote that interaction. Repetitive manual tasks, such as regular storage temperature or equipment checks, can be automated with IoT sensors that provide a constant data stream. This lifts a major burden away from employees who can refocus their time on adding value elsewhere, such as customer interaction and creativity.

At the same time, we expect to see growing use of digital assistants that guide, prompt and log essential activity, from cleaning schedules to food preparation. In this way, operational excellence tools become a supportive presence rather than a replacement.

Flexibility, hybrid working and greater job satisfaction have become higher priorities for people in the wake of the pandemic. Operational excellence tools can contribute to that.

Supply chain resilience will be boosted by operational excellence tools

Supply chains everywhere have been put under immense strain by the combined effects of the pandemic, geo-political trends and labour shortages.

In one survey of supply chain leaders, 93 percent of respondents said COVID-19 had exposed problems with their global manufacturing and supply footprints.

The challenge for those leaders is that they are managing a vast ecosystem of people and processes, spread across multiple locations and time zones. In many cases, reporting methods are outdated, creating knowledge gaps that leave organisations vulnerable to risk and unable to see opportunities for innovation. It’s another case of ‘dark operations’.

Supply chains cannot afford to operate in the dark. Outdated practices will need to be replaced with a new mindset that focuses on continuous improvement.

Leaders will need operational excellence tools to identify and address areas of risk and gain closer engagement with the deskless workers who are so crucial to effective operations. They will need operational excellence tools to coordinate resources efficiently by liberating people from administrative tasks that don’t add value. They will need accurate data to prove standards and SLAs are being met consistently.

Operational excellence tools will provide a reliable flow of data to drive better decisions, improving efficiency, speed and transparency. Analysts at Gartner report that too many organisations in the supply chain are operating with insufficient information. The future will be different. Digital adoption is set to rise. By 2025, 23% of supply chain leaders expect to have a digital ecosystem in place, up from 1% today, according to Gartner.

Applying more operational excellence tools will uncover hidden inefficiencies – duplicated tasks, paperwork that takes hours out of every day, lost or misdirected stock, employee churn that diverts productive hours into onboarding and training, obligations that are dropped during shift handovers.

Resilience is no longer a tactical response to the pandemic but a strategic imperative. Supply chain leaders will be looking to augment their workforces with digital capabilities, ensuring they can adapt more quickly to global economic forces and other forms of disruption.

 

These are just some of the 2022 trends that will require companies to leverage new operational excellence tools in pursuit of more efficient, adaptable and productive operations.

 

Picture credit: Photo by Drew Dizzy Graham on Unsplash

 

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Nick Henderson

Content & Communications Manager at Checkit

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