Over the period, we have seen the emerging of the manufacturing sector as one of the highest growing sectors of India. Indian manufacturing sector set its foot as the 6th largest manufacturing sector amongst other countries. India is also said to achieve 5th position in the same by the end of 2020.
The manufacturing sector in India has the potential to touch US$ 1 trillion by 2025* (Source: https://www.ibef.org). There is a possibility that the sector might account for 25-30 percent of the country’s GDP and create up to 90 million domestic jobs by 2025.
This sector is a highly emerging and evolving sector. And with spurts of ups and downs, the organizations in this sector must be proactive to face numerous challenges. On a simple note, organizations can be classified into two categories, namely, proactive or reactive. Proactive companies build muscles while reactive companies build fats.
Many times, we have seen that there are a few organizations that believe in strengthening their internal processes by eliminating waste and by sustaining a structured program focused on building operational excellence. Whereas others believe in cost-cutting. But will this work?
Just imagine, if any company which is stock rich and fat rather than being fit, it loses the ability to respond to the change and in turn compulsorily has to react to the changing markets. This dynamic behavior can be related to the amount of stock lying in the supply chain.
One of the researches in the past showed that those organizations that worked hard in leaning their supply chains survived and emerged stronger in the changing market in comparison with those organizations who did not. Those organizations were capable of being flexible with delivery times, batch quantities as they were lean and agile.
Organizations that have not leaned their supply chains has witnessed more intense problems. And during change and tough times such organizations had to drive immediate change in the price and order deliveries which inevitably forced these companies to hastily alter the manufacturing and supply chain practices.
In contrast, organizations who adapted operational excellence practices were able to adapt, manage and survive the rapid changes in the market. It is also said that operational excellence is one of the cornerstones to Organizational Success and Transformation.
Operational Excellence ensures the basic stability of operation in an organization where the health of machines, continuous flow of material, reduced throughput time and encouraging quality ratios are the parameters that determine the competitiveness of the organization as well as decide the customer satisfaction index. As we have always said, the customer is the king and it is important to satisfy their expectation levels that will help the organization lead in the market.
So, identification of fats – the waste in the organization, cost-benefit and time-benefit analysis of the problem is the key. Organizations that want to cut costs should not cut the muscles, rather they should hit the fat – the waste in the system by cost management and not cost-cutting. So as Benjamin Frankly rightly said – “Watch the little things; a small leak will sink a great ship!” So, watch out for the fat in the system and start attacking it, to sail smoothly even in the tough times.
Hence, the right set of targets and systems, lean tools and techniques, skilled and motivated team – all in all, excellence in operations, business and people is the key to growth and development.