An effective industry operations leader maximise her value chain opportunities by creating innovative products, processes and services for domestic and global markets by providing minimum cost, highest quality, competitive profitability and higher customer value.
This is not simple. There are a lot of factors. It is not possible to achieve this by staying on the table.
1. Perform Innovation Management
“The fact is coming up with an idea is the least important part of creating something great. The execution and delivery are what’s key.” Sergey Grin, Co-founder of Google.
R&D, marketing, supply chain operations and manufacturing process are critical components of a thriving agri-food company.
I believe that innovation culture drives great results. Creating strategic alliances and networking provide access to resources that are greater than a single company could buy. This can greatly improve its ability to create new innovative products, bring new technologies and penetrate other global markets.
“The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.” Albert Einstein
Today, there is an increasing competition between companies. New technologies, robotics, and new services create uncertainty and problems for the survival of the some companies.
"The key to corporations’ rejuvenation, civilizations’ evolution, and human development in general is simple: innovation." HH Sheikh Mohammed bin Rashid Al Maktoum
I know that developing and implementing a long-term marketing and innovation strategy is a crucial factor to compete with domestic and global competitors. Therefore, innovation is a management process and it has to be linked with the effective change management and successfully performed by leadership to adapt to the new business conditions.
“Human were not born to extrapolate the past to the future. Our world isn't linear. We may have our own butterfly effects by making small changes that create huge possibilities. We need to expand on our imagination as a feed for our creativity so as to arrive at innovative products. What seems a stupid idea that defies logical thinking may in fact be a great one, but our lack of imagination kills it.” Dr. Ali Anani
Today, organizations must have systematic and competitive innovation management and reconfiguration for;
- Continuous morphing and changing
- Stability combined for dynamism and agility
- Recruiting, retaining and getting the most from talented people
- Stable vision and variety in the short and long-term execution
When we look at Fortune 500 after 1955, we will see that many companies had a competitive advantage trap. The only 57 companies are on the list in 2015. The others failed in dynamism and innovation management and healthy disengagement. This shows that only 12 percent of companies are successfully managed healthy disengagement and reconfiguration processes.
- They should invest in new activities such as new technologies, new services, R&D and/or international expansion.
- They should be sure that innovation is systematic, continuous, mainstream and part of everyone’s job in the organization.
2. Create Operational Excellence
I believe that operational excellence is continuous improvement and basically taking a methodical approach involving people, processes, and technology to drive a continuous and flexible improvements by delivering competitive products and business outcomes that create benefits for the customers and the business.
“I hear and I forget, I see and I remember, I do and I understand.” Unknown
Cost is very important in agri-food industry. It can be material and labor cost, packaging and shipping expenses, operational costs (including sustainability costs such as energy, water, wastewater). Therefore, operations leaders have greater pressures to achieve operational excellence.
- Reduce cost 68%
- Regulatory compliance 54%
- Ensure product quality 47%
- Maximize productivity 38%
- Reduce process variability 29%
When I was working in operations and supply chain, we have decided to supply fruits, vegetables, meat, milk and other materials from Turkish market, we searched all of the suppliers, developed and implemented a controlled agricultural program. We applied this program and supplied all of the raw materials from Turkish market (conforming to EC regulations) and saved EUR 3 million in one year.
When I lead a multi-plant diverse manufacturing operation through a comprehensive LEAN management program, we obtained a 5% increase in EBITDA.
Key Challenges in Operational Excellence
- Poor Collaboration Across Different Functions
- Poor Data, Sofware and System Processing
When I was in a factory visit, I saw that an operator is staying and waiting the maintenance staff. Because they didn't have the right to maintain the machine even if it is a small issue. The reason was the operations leader management style. They lost more than one hour. I asked him "Can you repair it?" The answer was "Yes, of course." I talked with the operations manager. Operator repaired in five minutes and they continue with the production.
"The bottom line is that complexity consumes an organization’s scarce resources; it adds little or no value little in return; it impedes the organization’s speed and agility; it affects employee morale, an ultimately it causes the organization to be unprofitable but it is silent and therefore it does not receive the attention it demands. " Doug Wilson
I know that we have to achieve customer centricity and loyalty through operational excellence. Of course, we have illustrated the complexity, problem areas, unnecessary loops and redundancies in the organisation processes to increase operational excellence and organizational agility.
Therefore, leaders must increase focus on internal complexity and minimize it.
3. Establish Organizational Agility
Organizational agility is a critical factor in efficiency, productivity, growth, creating more and more transient competitive advantages and competitive customer value.
“An organization’s ability to learn and translate that learning into action rapidly, is the ultimate competitive advantage” Jack Welch
When I was working in manufacturing operations, our boss had a phone call and requested a change in the production plan and deliver a product in 5 days (after quarantine period). We immediately changed the plan and produced that product batch and delivered on time. Because we had extra demand from the market.
I always believe that organizational agility and flexibility is important and leadership capability, experience, knowledge, and skills define its success level.
I know that operational excellence can help a company be more agile in responding to customer demands and realities of the supply chain in terms of cost and availability of raw materials and distribution for a business
A truly effective operations leader is health-conscious and provides clean labels, innovative products and transparency to drive the success in agri-food operations.
4. Create Accountability
Clearly, operational excellence makes easier to track and analyze data in different aspects of supply chain and production operations. It provides traceability and accountability.This will create transparency for the customers and low cost in quality.
"Leaders who refuse to accept responsibility and accountability are the root cause of the employee dissatisfaction and leadership distrust we observe in many organizations. The “it’s not my fault” mentality is a key characteristic of leaders who are not in their positions to serve others through high quality products and services." Doug Wilson
You know the baby food industry. It is very complex and quality standards are higher than conventional foods. We analyzed and collected all the data and provided traceability. We know what we performed. Therefore, we didn’t have quality failures and recalls from the market. Of course, the combination of pressures around rising operational costs, manufacturing efficiency, and product quality form a complex operating environment for the agri-food industry.
5. Implement Common Goals for Operational Excellence?
- Improve efficiency and productivity
- Reduce downtime
- Reduce equipment, machinery and lines maintenance or increase equipment reliability
- Improve sustainability in water, wastewater, energy and wastes.
- Provide people safety and health
- Reduce risks
- Reduce complexity
- Improve supplier quality
- Faster response times to the changes in supply and demand
- Faster new product and/or service development and launch
- Increase production capacity
- Improve processes from the field to the fork or from the supplier to the customer.
- Optimize systems and technology through regarding short and long-term marketing and innovation management strategy in a competitive way.
- Effectively delegate
- Regularly train and develop people
- Reward success always
- Regularly analyze the future of the sector
6. Balance Safety and Quality
I have to say that we have to provide healthy products to the market. We have to know the quality of our products and current regulations. They have to conform.
A truly effective operations leader knows that balancing safety and quality with cost provides a competitive optimization in the operations.
Yesterday I read a news about an employee nearly lost an arm on a conveyor in a company. This company has been fined USD ....
I have worked in multi-industrial manufacturing operations 32 years and we never has such injury. Because, we applied a safety first strategy and took all of the preventive measures against injuries. We hired right people to the right job. We trained all of the people about the safety. Of course, we inspected all of the lines, processes and equipments and identified gaps and made necessary maintenance to provide people safety.
When I was in pharmaceutical and agri-food manufacturing operations, we always calculated the risk factors from the field or supplier to the consumer.
I know that some companies have product failures in the company and/or in the market. We learn from social media. This is a big damage to the company image and customer loyalty. Calculate the financial damages in the long-term! I know that some leaders are very poor in risk calculation and making right decisions on time. They fail in the complex problem solving.
7. Reduce Cost
Leaders have to find places to reduce costs and free up the capital needed for operational investments. Of course, they have to keep quality and safety. Applying effective lean management leads to a demonstrable ROI, higher profits and better financial performance.
We have to keep in mind that automation and robotics can significantly help reduce costs and increase speed in the operations. So that we can boost employee capabilities and produce high-volume and highly transactional process functions and save money and time in the operations.
I know that digitizing various facets of operations and by collecting the right data, we can improve their productivity by at least 6 percent. This not a small value!
8. Work with the Effective Leaders
I have to define that companies have to improve their interviewing and hiring methods. They have to develop and implement an effective talent management strategy.
We are living in an era of fourth industrial revolution and the war for talent. In 5 years, 35% of the skills will have changed in some industries. Imagine the competition!
I have to advise that companies must work with well-experienced senior leaders or experts and make a tremendous amount of experimentation and innovation through developing and deploying new technologies, services, partnerships, moving into new markets in the local and global places, developing and implementing new business models, executing competitive intelligence and even entering into the new industries.
"To sustain innovation, businesses must attract and retain the most creative and productive minds. In this age of global mobility, countries, too, go head to head in the battle for talent. Global cities compete to provide an ideal life and work environment for innovators, and to harness their creativity to become stronger and more competitive still." HH Sheikh Mohammed bin Rashid Al Maktoum
According to my experience and know-how in multi-industry; passion, enthusiasm and excitement are three key emotional facets of effective and competent leadership in today’s organizations. Such effective and competent leaders have greater capability of inspiration and intuition and they bring organization alignment, operational excellence and organizational agility to the company. They are excellent in listening and valuing their people.
Companies have to amplify a disruptive people strategy and pay attention to:
- Complex problem Solving
- Critical Thinking
- People Management
- Coordinating with Others
- Emotional Intelligence
- Judgment and Decision Making
- Service Orientation
- Cognitive Flexibility
- Quality of Hire becomes a crucial factor to achieve competitive growth, profitability and customer value in operations.
- Driving for Innovation and creating more and more transient competitive advantages in new products, technologies and services.
- Going beyond the Resume and Interview and discovering the leadership capability. This requires great experience, know-how and skills in interviewers and hiring people. Look at the market!
“Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital – the world best talents and greatest ideas.” Jack Welch
9. Create Systematic and Continuous Transient Competitive Advantages
Today, we can only create transient competitive advantages. This means that effective leaders can create the waves of temporary competitive advantages. In other words, the job of orchestrating how these waves are managed and executed is mostly a crucial job of the today’s business owners, CEOs, and leaders.
“To stay ahead, they need to constantly start new strategic initiatives, building and exploiting many transient competitive advantages at once. Though individually temporary, these advantages, as a portfolio, can keep companies in the lead over the long run.” Rita Gunther McGrath
Today’s leaders should combine stability and dynamism in a continuous manner.
When I was working in a pharmaceutical company, our boss continuously launched new competitive products to the market. Now, they are global and market leader after 2002.
When I was managing manufacturing operations and supply chain, we developed new products and launched some of them to the market. It was a systematic and continuous product development process. So that our company became the market leader in certain categories.
10. Make competitive intelligence?
Many organizations don’t perform competitive intelligence and sector analyses. Normally they must do!
Competitive intelligence is the capability that captures and analyses consumer, market, trends and competitive information in a systematic and continuous process, with the focus on generating actionable insights to help the business make truly valuable decisions regarding future events to achieve a transient competitive advantage to the organization.
“Knowledge has become the key economic resource and the dominant, if not the only, source of competitive advantage." Peter F. Drucker
I have to say that organizations should have constant fast-paced change in today’s digital age and get better position faster then others and create a long and prosperous future on a global scale. They have to capture, analyse, and package the opportunities into actionable insights.
PWC conducted a global survey with 405 CEOs of different companies and concluded that companies that place a high value on competitive intelligence grew at a 20 percent faster than other companies. I have to say that extra 20 percent growth is really valuable in today's complex business world.
“Executives are so enchanted by the internal data the computer generates, that they have neither the mind nor the time for the outside. Yet all great change comes from outside the firm, not inside." Peter Drucker
How do you examine the present and future of your company’s competitive environment?
It is clear that if you don’t invest in experience, knowledge, skills, long-term risk management and competitive information, you can fail in the long-term due to the acceleration in the heavy competition for creating a sustainable competitive advantage.
11. Keep Your Effective Leaders/Managers?
I see that some companies don’t keep their well experienced leaders/managers who have excellent knowledge and highly valuable skills (including emotional intelligence) after a certain age. This age is 63 in the USA and it is 47 in Turkey. This is the short-termism. Such companies can fail in the long-term.
12. Don't Trap into "You Believe You Always Know Best?
I think that this is the biggest trap for company owners and leadership level. They need other effective people’s input. Challenged and robustly debated ideas involving many people’s views are often the strongest in today’s highly competitive business world. An effective change management can be obtained by the individuals making up the organization understanding, accepting and adopting the change.
Yusuf Tokdemir is seeking Operations Manager, Supply Chain Manager, VP of Quality R&D Position in agri-food operations.
If you are looking for a well-experienced manufacturing operations, supply chain, quality and R&D, innovation management leader to make a big impact in the world around you and in your company, then I look forward to meet you. Call me or email me at email@example.com
Yusuf Tokdemir is a high-performing senior executive with thirty-two years of experience and know-how in agri-food and pharmaceutical industries. He has proven track record of success in manufacturing operations, supply chain management, quality and R&D management, factory start up, innovation consulting, marketing, business start up, talent management and government relations to creating sustainable growth, profitability, competitive advantage and highest customer value.
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