Ch 25 - Operations Consulting

Question 1

Today’s operational CEOs realize that brilliant business strategies and operational strategies are interconnected. Business strategies drive the need for new operational capabilities, and evolving operational capabilities shape the future business strategies. PRTM Consultants focus on the following six essential ingredients of operational strategy:

Answer 1

• Transform market forces into operational advantage.
• Do one thing extraordinarily well.
• Think end-to-end, continuous, real time, and horizontally.
• Think and execute globally.
• Drive innovation in your operations and business model.
• Execute relentlessly.

Question 2

What is operation consulting?

Answer 2

Assisting clients in developing operations strategies and improving production processes.

Question 3

Actions to improve processes?

Answer 3

refine/revise processes, revise activities, reconfigure flows, revise policies/procedures, change outputs, and realign structure.

Question 4

The following are some of the major strategic and tactical areas where companies typically seek operations consulting. Looking first at manufacturing consulting areas we have:

Answer 4

∙ Plant: Adding and locating new plants; expanding, contracting, or refocusing existing facilities.
∙ People: Quality improvement, setting/revising work standards, learning curve analysis.
∙ Parts: Make or buy decisions, vendor selection decisions.
∙ Processes: Technology evaluation, process improvement, reengineering.
∙ Planning and control systems: Supply chain management, ERP, MRP, shop-floor control, warehousing, distribution.

Question 5

A common consulting portfolio of specialties in services (and areas of consulting need) would include the following:

Answer 5

• Financial services (staffing, automation, quality studies) * Health care (staffing, billing, office procedures, phone answering, layout)
• Transportation (route scheduling and shipping logistics for goods haulers, reservation systems, and baggage handling for airlines)
• Hospitality (reservations, staffing, cost containment, quality programs)

Question 6

A book by Ethan M. Rasiel on the McKinsey & Company approach offers some practical guidelines for conducting consulting projects:

Answer 6

∙ Be careful what you promise in structuring an engagement. Underpromise and overdeliver is a good maxim.
∙ Get the team mix right. You can’t just throw four random people at a problem and expect them to solve it. Think about what sorts of skills and personalities work best for the project at hand, and choose your teammates accordingly.
∙ The 80–20 rule is a management truth. Eighty percent of sales come from 20 percent of the sales force; 80 percent of your time is taken up with 20 percent of your job; and so on.
∙ Don’t boil the ocean. Don’t try to analyze everything—be selective in what you investigate.
∙ Use the elevator test. If you know your solution so well that you can explain it clearly and precisely to your client in a 30-second elevator ride, you are doing well enough to sell it to the client.
∙ Pluck the low-hanging fruit. If you can make an immediate improvement even though you are in the middle of a project, do it. It boosts morale and gives credibility to your analysis.
∙ Make a chart every day. Commit your learning to paper; it will help push your thinking and assure that you won’t forget it.
∙ Hit singles. You can’t do everything, so don’t try. It’s better to get to first base consistently than to try to hit a home run and strike out 9 times out of 10.
∙ Don’t accept “I have no idea.” Clients and their staff always know something, so probe them for some educated guesses.
∙ Engage the client in the process. If the client doesn’t support you, the project will stall. Keep your clients engaged by keeping them involved.
∙ Get buy-in throughout the organization. If your solution is to have lasting impact on your client, you have to get support for it throughout the organization.
∙ Be rigorous about implementation. Making change happen takes a lot of work. Be
rigorous and thorough. Make sure someone takes responsibility for getting the job done.

Question 7

What is business process reengineering?

Answer 7

Business process reengineeringis the radically restructuring of business processes to significantly improve customer service, reduce cost, and become competitive. It uses many of the tools just discussed to achieve these goals.

Question 8

Reengineering is about achieving a significant improvement in processes so that contemporary customer requirements of quality, speed, innovation, customization, and service are met. The following are seven principles or rules for reengineering and integration that can be used to guide a process reengineering project:

Answer 8

• Organize around Outcomes, Not Tasks
• Have Those Who Use the Output of the Process Perform the Process
• Merge Information-Processing Work into the Real Work that Produces the Information
• Treat Geographically Dispersed Resources as Though They Were Centralized
• Link Parallel Activities Instead of Integrating Their Results
• Put the Decision Point Where the Work Is Performed, and Build Control into the Process
• Capture Information Once—at the Source

Question 9

The principles of business process reengineering just enumerated are based on a common platform of the innovative use of information technology. But creating a new process and sustaining the improvement requires more than a creative application of information technology. A detailed study of reengineering applications in 765 hospitals yielded the following three:

Answer 9

1. Codification of reengineering - documents etc
2. Clear goals and consistent feedback. - Goals and expectations must be clearly established, preapplication baseline data gathered, and the results monitored and fed back to employees.
3. High executive involvement in process changes. A high level of involvement by the chief executive officer in major process changes (procedure changes in hospitals, for example) improves reengineering outcomes.