Attaining Lasting Operational Excellence in Industry

14 Dec 2018

Attaining Lasting Operational Excellence in Industry

Cost Management Strategies

​In the pursuit of operational excellence in any industry, effective cost management strategies are absolutely vital to the success of your endeavor. Before any company engages in evaluating or re-evaluating their operations for improvement, it is important that they assess the current business climate and industry landscape. They key however, to overall success is sustainability which relies on well planned long-term strategies that are designed to manage costs.

Some in industry today consider our current business climate to be very “cost conscious”. If you want to stay competitive long-term in the current business climate, then it is fundamental that your business align their cost management strategies with distinct measures that have bottom-line metrics and KPIs.

Excellence in industry requires a level of operational performance that is both high and sustainable. Market conditions always have an underlying effect on outcomes, however, those factors need to be taken into consideration during the analysis of the business climate and industry landscape. In order to attain this excellence it is important that these key factors be managed in an integrated fashion. Throughout industry the key factors that require integrated management are:

  • Safety

  • Reliability

  • Productivity

  • Efficiency

  • Optimization

From time-to-time of course there are drastic changes in markets or market conditions. An example of this is the economic downturn of 2009. During times like these it is imperative that the sustainable cost management practices be sufficient to keep operational companies and service companies from being forced to perform emergency realignment of cost structures, in order to keep from creating impacts on other aspects of their operational excellence. Additionally, a company’s success in handling this before negative market impacts happen, will often determine the continuation or deferment of new development projects.

Continuous implementation of cost containment strategies helps companies in industry to maintain their competitive advantage by ensuring they hold their position as a low-cost operations or service provider. If this is worked in tandem along with high achievement and greater levels of customer success, it is likely that company will triumph in their own bottom-line end game. A vibrant cost management culture which supports “sustained” operational excellence requires detailed attention to the following as well:

  • Day-to-Day operational Management

  • Data Analytics

  • Operational Leaning

  • Smart Design (technical, operational, service processes)

  • Supply Chain Management

  • Contractual Flexibility

Success in these areas, does not happen by accident. Pieces do not magically align themselves for success. In industry it requires a team commitment to do the hard, daily task of looking at all aspects of your business’s operations and services to determine the best practices, to implement in each area of your business’s practice arena. A lack of foresight, a lack of planning, or a failure to consider all aspects and options within the business cost structure for political or cultural reasons, can lead to your company not being ready when hard times come knocking. The results can be catastrophic for an unprepared organization.

Simply put, sustainability requires long-term planning and diligence. So plan your work, then work your plan.