Covid-19: Avoid wasting time and money by taking control of your operations
Managing your operations through the current crisis might seem like a daunting task. So how can entrepreneurs get started?
“Despite the survival mode in which some business owners are finding themselves, the main problem for businesses in a crisis is to realign offer to client needs; to avoid wasting effort and dollars on inappropriate offer,” says Stephane Chrusten, Senior Business Advisor, BDC Advisory Services. “Specialists will talk about sales and operations planning (SOP), which is basically to align the demand in the market with your production plan, so you are producing things that have value in time and volume.”
Focusing on your production plan while ensuring it is followed can help you protect your cash flow and deal with supply chain risks. In some cases, this may mean you need to take a step back and rethink your entire business, considering your contingency plan and adapted action plan in order to return progressively to effective production at pace and at scale.
“The crisis will reveal not just vulnerabilities, but also opportunities to improve the performance of businesses,” says Chrusten. “Let innovation go through your team, this might bring happy surprises and pay returns.”
Chrusten, who helps entrepreneurs improve their operational efficiency, offers the following tips for getting a better handle on your operations in the current crisis.
Determine the appropriate demand
Your first responsibility should be to avoid producing goods/services that currently don’t have short-term value on the market.
The impact of this crisis might change client needs and expectations permanently. Chrusten’s suggestion for entrepreneurs is to closely assess the shift in their client’s habits and to rethink their offer if necessary.
Many businesses might need to reinvent themselves as a result of the accelerated growth of online commerce, extended use of virtual technology, supply-chain mutation within globalization and uncertainty concerning the length and severity of containment rules going forward.
Entrepreneurs need to be in close relations with clients and get insights from the market to know how they need to adapt and realign their go-to-market plan and operations.
That information then needs to circulate to your team so precious cash doesn’t get tied up in unneeded inventory, finished goods or activities that can’t be immediately recovered. Production teams will also have to move quickly, in some case, to modify their processes and methods, and meet the changing needs of the market.
Ensure the production plan is followed by everyone
Strong communications and coordination between your production, finance and sales team is crucial to remaining agile and producing to the needs of the market while maintaining sustainability.
Chrusten advises holding a daily coordination meeting so information flows from management to each collaborative team. This well-structured meeting allows a joint review of the latest news, employee safety and care measures, priorities and challenges. The meeting should end by setting delivery objectives on a day-to-day basis.
Larger businesses need to pair that with a clear cascading flow of information, from the president, to department heads and team leaders, and then to employees. It’s critical, notably, that your front-line supervisors remain aware of expectations and are able to adjust production rapidly. In the current context, communication skills will become vital for leaders who manage teams. Normal pressures, which are typical to operations, will be increasing with new stress brought by the crisis.
“Operation are often at the bottom end of the process, and the pressure is on to make what we promised,” says Chrusten. “If operations are not well aligned with the rest of the business, we just won’t sustain the business.”
Measure your productivity
Surviving a time of crisis often entails cutting down expenses and maximizing output.
“Businesses need to maximize their output for every work-hour”, says Chrusten.
One of the keys to doing that is to measure your productivity. By measuring your performance in key areas, you can evaluate how you’re doing compared to internal goals or benchmarks, such as industry averages. You can then get started on improving your results by limiting delays, improving quality and cutting down on many other forms of waste.
Chrusten says entrepreneurs need to ask whether every step of their processes is necessary. “We often find that 25% to 50% of all activities don’t add value for clients.”
Challenge team members to find better ways of doing things. Especially at a time like this, when many activities are interrupted, employees can be mobilized to boost efficiency.
If you are working at a slower pace, take advantage of it to invest in workforce cross-training so you can improve your productivity while expanding your team’s core competencies.
“An emergency will often help speed up the pace,” says Chrusten. “But for businesses who want to do more than survive, it’s time to leverage the situation to improve your processes.
Double down on technology
Even before the current crisis, mechanization and basic automation projects were promising growth avenues for Canadian businesses. Many manual activities can be mechanized or partially automated, manutention for example.
At a time when work crews have been reduced to a minimum, companies that have already invested in these types of equipment and processes will benefit.
The same logic can be applied to digital technologies. Companies that invested in remote systems, cloud software and online commerce are now in a much stronger position than companies who delayed.
Even for businesses that have invested in systems, it’s important to ensure those systems are used properly. “I often see employees inputting data manually or not using the full capability of their system when they have tools at their disposal to do it with efficiency,” says Chrusten.
“It might be the time for some to invest in those technologies, but every entrepreneur should see the current crisis as an opportunity to simplify processes with an eye on greater automation once things pick up again.”