Off Highway & Industrial
Deploying Flexible Operations in Changing Industrial Environments
In a world where technology is constantly evolving, manufacturers and service providers must adopt an agile approach to respond to internal and external changes in their industry. They must also have the ability to initiate transformation without reducing value delivered to customers.
Flexible operations provide the ability to meet customer demands while also regulating costs. For sectors that rely heavily on technology, such as industrial and heavy equipment, infrastructure, telecom, aerospace, rail, and semiconductor, the ability to operate efficiently and remain competitive is even more critical.
The Difficult Road to Achieving Operational Flexibility
Businesses seek flexible operation models to manage their internal processes more efficiently and control costs. However, there are several internal and external factors that commonly inhibit flexibility in manufacturing ecosystems and operations. These include:
- Incumbent operational processes
- Legacy thought processes
- Shifting market conditions
- Evolving competitive landscape
- Changing expectations of end customers
When an organization is slow to upgrade its production techniques, its ability to address sudden changes is degraded. Losing touch with consumer needs only serves to worsen the problem.
In order for businesses to achieve a flexible operations model, they must anticipate client demand patterns faster and more accurately than their competitors, studying consumer behavior directly instead of just relying on channel organizations. A business with flexible operations must also be able to track the broad trends in its industry, including new patent filings and regulatory updates instead of just chasing raw material availabilities and prices.
Understanding that knowledge of business cycles and headwinds is crucial, businesses should adopt a framework that can be aligned with customer processes and industry standards, as well. With the ability to track and minimize customer risks, businesses can drive flexibility in their operations. These risks can stem from finances, poor performance, lost time or opportunity, and psychological, physical, or social harm from a product.
Working with a Flexible Operations Partner
To deploy an ideal flexible operations framework, organizations should consider partnering with professional service providers offering end-to-end engineering support for their specific industries. These vendors have an understanding of strategic priorities to control costs and improve quality of production processes. They are also capable of employing a variety of methods and models to partner with businesses.
One of these is the risk-reward model, a tried-and-tested methodology for operational flexibility. In this framework, payment is linked to the success of a project. The success criteria is often defined at the start of the project and may be measured in terms of sales units, decrease in production costs or other results. The payment from the business could be flat pricing initially followed by an additional payment at the end of the project that is linked to milestone success. Alternatively, the model might include a complete payout linked to project success with no upfront payment required.
The time and materials (T&M) model, fixed-price model and contract-based maintenance agreement are other common frameworks used to collaborate with engineering companies on flexible operations. The choice depends on the nature of the industry and the benefits the business seeks from the partnership.
Vendors capable of implementing flexible business operations are not mere suppliers of technology that augment existing processes. They are valuable partners that guide businesses in handling different scenarios and enabling operational efficiency with reduced time-to-market.
A flexible operations partner helps businesses create better products that adapt to their changing environment. Businesses collaborating with end-to-end partners in this manner can redefine concepts and development processes to:
- Revolutionize what their products can accomplish
- Navigate through challenging market forces
- Reduce manufacturing costs
- Improve customer experiences
- Drive efficiencies across the production life cycle
- Increase revenue and profitability
In a volatile world, operational flexibility is a strategic priority that manufacturing industries cannot ignore. They need to capture customer insights promptly, re-engineer their value chains and employ new metrics for greater responsiveness to changes in business environments. The rewards will be improved demand fulfillment, predictable outcomes, and faster enterprise growth.
Learn how Cyient’s flexible operation solution helped a client develop a market leading industrial low-torque screwdriver which enhanced product confidence.
By Bhaskar Ramakrishnan | June 28th, 2018