OpEx as a Part of Business Growth Strategy

category-badge-OPEXIt’s no secret that most companies face challenges on a daily basis. Unfortunately, without the right strategy, they often find themselves dealing with their difficulties in a way that makes it feel like all they are doing is putting out fires. Their troubles may relate to quality, costs and delivery of products, as well as to waste and customer satisfaction. While they may get their fires under control for the moment, the result of “firefighting” is a frustrated organization and a team that feels demoralized.

To be successful, a company needs to have both a good understanding of where it is now and a solid vision in place for its future. This includes establishing a standardized process to build and deliver product with predictable costs and quality. In short, developing a Business Growth Strategy that encompasses these needs is critical to operating a profitable and reputable business that is also well positioned for growth.

An effective Business Growth Strategy should include two elements:

  • A formal Operational Excellence (OpEx) program that will document, standardize and improve work processes across the organization. Standardized processes reduce waste, rework and warranty expense, which ultimately results in reduced costs and increased profitability.
  • A Strategic Growth Plan that begins with an understanding of the existing business position and the development of strategies for growth in both new and existing markets. These growth opportunities will leverage and build on the company’s existing expertise and capabilities.

Let’s walk through the steps needed to design your Business Growth Strategy.

Step 1: Identify Your Goals

No matter what your business—whether it be manufacturing, service, retail or healthcare, just to name a few—your business goals will inevitably include:

  • Improved Profitability
  • Increased Market Share & Revenue Growth
  • Reduced Waste, Rework & Variation
  • Improved Quality and Delivery
  • Reduced Inventories
  • Improved Manufacturing & Process Flexibility
  • Customer Satisfaction

Step 2: Identify the Challenges Pressuring your Organization

Your Business Growth Strategy should be tailored to your unique situation. Start by scheduling a team meeting with the purpose of taking a hard look at your operation. Encourage honesty from the team and list issues that anyone suggests. These will become part of the foundation for your OpEx initiative and Strategic Growth Plan. A few examples of issues you may need to address are:

  • Changing Market Conditions (economy, industry needs, demand)
  • Declining Markets (no one needs “Buggy Whips”)
  • Eroding Margins
  • Increased, Uncertain & Fluctuating Costs (internal or external causes)
  • Competitive Pressures
  • Customer Satisfaction
  • On-Time Delivery

Step 3: Evaluate Your Current Quality Management and Process Controls

Companies frequently have casual or informal Quality Management Systems and Process Controls, as well as undocumented work processes. These situations result in a less than desirable environment where unpredictable costs, quality issues and customer satisfaction become burdensome. Companies that operate this way typically find themselves scrambling to simultaneously deal with many issues, which results in what we previously identified as a culture of “firefighting”. Firefighting, as we determined, is counterproductive to efficiency and growth and only breeds frustration.

Design Your Business Growth Strategy

Once you have identified your issues, challenges and goals, it’s time to design your Business Growth Strategy. The most effective Strategy is one that combines both an OpEx initiative with a Strategic Growth Plan.

OpEx Initiative

When costs, quality and capabilities are well understood, it enables your organization to leverage existing capabilities, to grow sales in existing markets, and to confidently explore new markets. OpEx initiatives will solidify your understanding of costs and efficiencies and will standardize the processes across your operations. They will also identify your operation’s strengths and weaknesses. This information ultimately becomes an integral part of your Strategic Growth Plan.

Depending on the situation, OpEx work may utilize tools and methods such as:

  • Lean Practices – Provide the customer what they require
  • Formalized Process Mapping for existing procedures
  • Six Sigma DMAIC Problem Solving
  • Waste reduction – materials and work flow
  • Establishing Standard Work Practices
  • Identifying and Tracking Key Metrics/KPIs (Dashboards)
  • 5-S Visual Workplace Program

When OpEx work is combined with professional guidance from outside resources, a more robust Business Growth Strategy can be developed. An un-biased set of eyes brings with it a fresh perspective and is often necessary to catch the details to which you and your team are too close to see. Your advisor will ask the “hard questions” and be able to help in guiding the design and implementation process.

Your consulting partner’s work should:

  • Examine existing markets
  • Study industry & market trends
  • Measure competitiveness of your product line
  • Interview customers to understand needs, challenges, expectations and “pain points”
  • Identify opportunities to capitalize on existing abilities to grow in existing and new markets
  • Evaluate and advise on existing marketing strategies

Strategic Growth Plan

A Strategic Growth Plan draws from the results of OpEx work. Standard work practices, efficiencies, existing capabilities and known costs will help to guide development of the Plan. With confidence in costs, it will allow your organization to explore new business growth opportunities.

Strategic Growth Plans take a hard look at existing markets, their stability, and their potential for shrinking or expanding. Marketing strategies will examine the situation at hand and be fine-tuned. A Plan will always put importance on leveraging existing expertise, capabilities and industry reputation.

PolymerOhio’s Integrated OpEx and Strategic Growth Plan

PolymerOhio Manufacturing Solutions has the experience and expertise to help you develop and deploy a Business Growth Strategy that combines Operational Excellence initiatives and a Strategic Growth plan. This work builds on what you already do well and improves the issues that are barriers to your operation’s growth. With confidence in standardized processes, work flows and operational costs, you will be able to explore and expand into existing markets that you may not have previously considered.

Our work utilizes the right philosophies, teachings and tools that will result in improved quality, costs, customer satisfaction, and workforce effectiveness for your organization. Contact us to explore how PolymerOhio can design an integrated program to grow your business.

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Greg McMahon

Greg McMahon

Program Manager at PolymerOhio Inc.
gmcmahon@polymerohio.org

Greg brings over 30 years of manufacturing experience to PolymerOhio.He is a mechanical engineer and has run his own privately owned manufacturing business as well as helped other companies in their quest to become more effective at what they do. In his earlier career, he worked for E.I. DuPont where he gained his love for the chemical and polymer industry, machine design, automation and electrical controls. Greg is very hands-on and he brings a holistic perspective to what it takes to run a manufacturing operation in today’s challenging business environment. He understands the up-stream as well as the down-stream pressures that business operators face today and uses those skills to help clients solve manufacturing and operational problems that they face.
Greg McMahon
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