In our November 2012 article, Navigating Uncertainty: Planning for Growth and Success in 2013, we provided seven tips for making plans in turbulent times. Now that the New Year is in full force, we’re going to examine one critical aspect of achieving success once annual plans are developed and adopted. Specifically, responding to change.
Manufacturers are certainly no strangers to the need for agility, flexibility and speed. Since the onset of mass customization, industries have had to find ways to address the demand for variety along with the assumption of timely fulfillment – no matter what. This pressure-cooker equation requires business processes, such as planning and scheduling, to be capable of extremely short lead times. In fact, the goal is an almost real-time response.
Adding to all this is the reality that manufacturers can’t let even the most unpredictable event halt business if they want to remain competitive. While strategizing best responses to unexpected crises may not seem as imperative when the environment is relatively stable (during which “band-aid” solutions, such carrying extra inventory or padding schedules, may suffice), today’s more consistently volatile landscape requires serious pre-planning.
It’s not a stretch to say that profitability lives or dies with the manufacturer’s ability to react speedily and strategically.
So, what do manufacturers need to consider when working toward an improved change response?
Because the goal is rapid response to day-to-day changes in any variable of the manufacturing cycle – whether it’s change in demand, supply or product – the entire system needs to be examined. This means that working to assess and improve change response presents the opportunity to also scrutinize operations and performance overall and make needed improvements. Although this can be a significant undertaking, the result is often priceless in terms of the competitive advantage that comes from having deeper insight and making even small adjustments. Much simplified, here’s what the typical process generally looks like:
EXAMINE: External and Product Factors (and continue to monitor data)
- Gauge customer demand
- Ascertain supply chain conditions
- Measure overall product quality
ANALYZE: Processes and & Systems (and create greater efficiency)
- Analyze process efficiency (updating as needed)
- Analyze systems seamlessness (updating as needed)
- Determine level of collaboration between key team members and facilitate greater communication and joint problem solving
- Assess enterprise resources and make needed changes
- Address supply chain issues and brainstorm ways of increasing vendor Supplier reliability
IMAGINE: THE FUTURE (and conduct formal scenario planning)
- Analyze multiple “what if” scenarios
- Predict financial and logistical impact of each possible response to each “what if” scenario
- Weigh alternative solutions based on pre-determined criteria
- Create a “Future State” vision of your productivity and profitability improvements
While 2013 promises many speed bumps, manufacturers who are prepared for change will be able to take them at full speed, and will likely outperform the competition and perhaps earn the loyalty of new customers. However, being prepared necessitates making change response analysis a priority.
As always, we’d enjoy hearing your thoughts on improving change response (just use the comment form below). Specifically:
What is your company doing to improve agility, flexibility
and responsiveness given the current competitive landscape?
What do you think are the most effective
ways to manage changes in demand, supply and/or product?
