Spotlight on Operations - Sustained Growth through Operational Excellence

Sustained growth through
operational excellence
Spotlight on operations
An Economist Intelligence Unit report
sponsored by SAPSustained growth through operational excellenceSpotlight on operations
Preface
Sustained growth through operational excellence is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit's editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Ken Waldie was the author of the report and Dan Armstrong was the editor. Mike Kenny was responsible for layout and design. Our thanks are due to all of the survey respondents and interviewees for their time and insights.
March 2008
© The Economist Intelligence Unit Limited 2008 1Sustained growth through operational excellenceSpotlight on operations
Operational excellence: Spotlight on operations
perations executives are different from Integrating across the value chainOtheir counterparts in other functions. Their intimate The perspective of operations executives comes out in knowledge of the processes from start to end of two areas. First, operations have a more nuanced view the value chain gives them a perspective that other of the effects, benefits and barriers to integration. functions lack. It is no surprise that when CEOs of mid- Second, they are more agnostic in their views on the sized companies are asked which functional role they best kinds of integration technology.most identify with, they tend to choose operations. The need to integrate multiple processes across the Operations is where value is created. value chain explains small but important differences Of the 946 executives who participated in the 2008 in the perspectives of operational executives. For Economist Intelligence Unit operational excellence example, operations executives who responded to the survey sponsored by SAP, 216 (23%) come from the survey are:operations function. This paper-one of four function- ? more positive about improvements in production specific papers-is based on the operations responses processes and reductions in costs than they are and follow-up interviews with operations executives. about improved customer insights to facilitate the The other function-specific papers focus on finance, development of new products and servicesIT, and sales and marketing. ? more likely to cite lack of agility and time-to-market delays in launching new products as barriers to growth than their counterparts in other functionsAbout the survey ? more likely to cite geographical dispersion as an In a survey completed in January 2008, obstacle to achieving operational excellencethe Economist Intelligence Unit surveyed This passion for integration also colours the responses operational, financial, IT, and sales and of operations executives when asked how they marketing executives around the world on the support growth. When operations people are asked role of operational excellence in their business how they can help their companies grow, over 60% strategies. The survey yielded 946 responses from point to integrating processes in sales, marketing, mid-sized companies with annual revenues of manufacturing, product development, customer $20m-$500m. Nearly one-third of respondents service and other functional areas. This integration were from the Asia-Pacific region, followed has tangible results: Over three-quarters of operations by 28% in Western Europe and 26% in North people say that it has helped to increase revenues, America. Approximately 34% of the respondents and slightly less than three-quarters point to higher worked in finance, 24% in marketing and sales, levels of customer satisfaction.23% in operations and 19% in IT.
2 © The Economist Intelligence Unit Limited 2008Sustained growth through operational excellenceSpotlight on operations
How operations executives are supporting growth Encouraging visibility into operations Operations executives cite end-to-end visibility into What is your company doing to ensure that your operational processes as the second most important way that systems can support your organization's growth strategy? Select all that apply. operations can support growth. However, operational visibility is difficult to achieve. More ... [download for more]