Outperforming competitors at the 'bottom-of-the-cycle'

In ‘good times’ (when demand typically exceeds supply and consumer confidence is high), businesses can ‘get away’ with inefficient practices and waste that are hidden behind profitability generated by higher selling prices and favourable supply/demand conditions.

The best businesses outperform their competitors when the market is at its most challenging. Operations is a key area of a business that 'collects' bad habits and practices during good times.

This occurs for a variety of reasons and in a variety of ways.

When businesses get busy, management values and principles get challenged. Put under pressure, things that would regularly be unacceptable become 'allowable in the circumstances'. For example, partial deliveries may be allowed to increase and DIFOT standards eased. Damaged product may be shipped which a service/maintenance person will then go to site and rectify.

Operations staff, under pressure to 'do-the-doing', may feel compelled to cut corners or change practices as a response to the level of throughput. Partially manufacturing jobs, moving jobs off to the side, 'stealing' components off other jobs to complete 'urgent' jobs, and covering up mistakes to 'see if we can get away with it' are regular examples.

Pressure also reflects in supply chain short cuts. Materials are not ordered on-time as scheduling practices break down. The request, 'Just jump in the ute and go get some from down the road' becomes more common. As does the 'all hands on deck' war cry with supervisors, managers and even owners taking to the tools and becoming operators (mostly bad ones).

In theory these things can be justified as 'good' because they demonstrate a commitment to the cause and getting stuff done. But there is a darker side to these short-term decision making processes and near-sighted practises. There is both a financial and non-financial consequence attached.

The standard you walk past, is the standard you accept.

Once standards are lowered, it is often difficult to raise them again. If it was OK yesterday and made it easier for me to do my job, then why not today? Let's just make extra unnecessary deliveries or rectify things on-site ... it'll be OK, we might even get away with a few things that aren't completely right.

In sport there is a term 'keeping-your-shape'. It means maintaining the important formations that will deliver successful outcomes. The best businesses maintain the important values and norms that will deliver the right outcome in all conditions.

This is why they continue to outperform their competitors at the bottom of the cycle when things are tougher.

AstuteOps can help you to establish processes and habits that stand up under pressure. As the saying goes, 'Good habits, once established, are just as hard to break as are bad ones'.

has extensive practical experience in

operations management for building, construction &

light manufacturing businesses. We work closely with SME's.

We have a deep understanding of manufacturing operations, and

proven capabilities in business optimisation and change management.

We get teams working, streamline processes and position businesses for success.

Contact Us