Optimising Performance for Profitability

Once the turmoil of restructuring is behind and the business is settled on its new course, time comes to crank up the performance to take on the market leaders.  

 

We cannot be comparing the business to past performance, rather benchmarking against the best.

 

The revitalised organisation should be embracing a culture of continuous improvement. It's essential if they are going to successfully compete.

 

Improving the organisation means working through the entire value chain created through the business and pursuing measurable improvement. This includes the primary creation, sales, maintenance and support activites of the product or service. 

 

It also extends to the less obvious business support activities which may be draining value.

Marketing and Sales

These are the processes you use to persuade clients to purchase from you instead of your competitors. Communicating the benefits you offer, to the widest audience that will appreciate the highest perceived value increases marketing and sales performance.

 Inbound Logistics

All the processes related to receiving, storing, and distributing inputs internally are evaluated. Seeking ways to better leverage your key supplier relationships can build value for both parties

Operations

Transformation activities like manufacturing, that change inputs into outputs that are sold to customers. These operational systems create value but need to maximise affordable efficiency

Outbound Logistics 

Delivery of the product or service to your customer involves collection, storage, and distribution systems, and they may be internal or external to your organisation. In recent years there has been a revolution is using the internet to improve logistic services.

Service

All activities related to maintaining the value of your product or service to your customers, once it's been purchased can be seen as a cost. They are also opportunities to build loyalty and sell more if done right.

Technological Development

All activities related to maintaining the value of your product or service to your customers, once it's been purchased can be seen as a cost. They are also opportunities to build loyalty and sell more if done right.

Staying ahead in technological development can put a company on the 'bleeding' edge. However minimizing information technology costs, staying current with technological advances, and maintaining technical excellence are sources of value creation

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Procurement (purchasing)

Procurement is what the business does to get the resources it needs to operate, we'd expect to improve the business by finding quality vendors and negotiating best (real) cost.

Human Asset Management

People are the most significant source of value creation and performance for business.  How well a company recruits, hires, trains, motivates, rewards, and retains its people. So creating a clear advantage with good staff management practices.

Business Infrastructure

All activities related to maintaining the value of your product or service to your customers, once it's been purchased can be seen as a cost. They are also opportunities to build loyalty and sell more if done right.   

These are a company's support systems, and the functions that allow it to maintain daily operations. Accounting, legal, administrative, and general management are examples of necessary infrastructure that businesses can use to their advantage.   

Optimising performance works by breaking an organisation's activities down into strategically relevant pieces, so that we can see a fuller picture of the cost drivers and sources of differentiation, and then make measurable changes appropriately.