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The productivity perspective: optimise operations and transform for sustainability

Transformation looks different through the lens of productivity. By embedding that perspective into an organisation, it’s possible to optimise operations and productivity while also paving the way for more efficient supply chains, resilience and long-term, sustainable growth.

This new approach is now critical. Organisations can - and must - adapt quickly to meet immediate and pressing needs if they’re to deliver sustained outcomes and solve their most important challenges.

That transformational change doesn’t require doing everything at once: it’s possible to maintain and even improve productivity, despite rapidly evolving circumstances.

But when resources and supply chains are unpredictable, it can be hard to set budgets and plan future investments. By putting a focus on productivity, organisations can transform in an integrated way that balances all their growth needs responsibly – operational and financial.

A productivity-focused framework helps optimise for today while delivering long-term success. Productivity is about ensuring the most relevant blueprint for the needs of the moment.

To transform in this way, organisations need fresh thinking. That may require questioning the very purpose of their operations: are they engaging with every component of the ecosystem? What is the optimum achievable level of sustainable productivity? What rapid, agile projects can they launch to optimise operations and drive value quickly? They will also need to look at how technology can help realise their goals.

“All organisations, big and small, in the private sector and within the machinery of government have, on the whole, shown remarkable agility in the face of a relentless barrage of unexpected events. Those that have survived, and indeed thrived, are the ones that have combined innovation, empowerment, purpose and a forensic focus on cost to drive productivity and this has set the agenda for the next generation of transformation.”

Alistair Kett, Operations Transformation Leader at PwC UK

The aim is to build a perfectly tuned ‘machine’ that works in the background to optimise operations and productivity. Whether organisations are looking to improve people productivity, reduce costs, improve profit margins or collaborate more effectively with partners across supply chains, viewing this challenge through the lens of productivity will help them transform efficiently, integrate resilience and sustainability, and deliver sustained outcomes.

Make people and functions more productive

Imagine an organisation that wants to increase employee engagement and performance. Approaching this transformation goal from a productivity perspective means working to develop the full stack of capabilities the workforce needs to produce positive, sustainable results. It also means putting data at its heart to gain valuable insights into how people work, and using automation where possible to improve efficiency and accuracy, and drive long-term, responsible growth.

One organisation that successfully transformed this way was Haringey Council. Creating a digital app to help social workers better collaborate while in the field, it freed up time for employees to focus on clients with more complex and resource-intensive needs. The result was a 53% improvement in cases authorised within five days and a 54% increase in social work closures, ensuring citizens got the help they needed, quicker. While helping to improve services and employee morale, the solution also helped the council save £1 million on third-party services.

Optimising operations

By taking a productivity lens to operational improvements, organisations can find ways to reduce costs and improve profit margins across the value chain. By doing this, they will free up money that can then be invested in further operational improvements and transformation for the long term.

Consider when supply chains were disrupted during the early days of the COVID-19 pandemic. Some companies responded by rationalising their SKUs, eliminating unprofitable or marginally profitable items to improve efficiency and reduce complexity in their distribution systems. By reducing the need for production line changeovers, inventory storage and other expenses in this way, organisations were able to generate considerable cost savings.

Building ecosystems

It’s impossible to transform and optimise productivity by ramping up every aspect of operations overnight. Organisations that don’t factor in the need for resilience – people and systems – are likely to sweat assets too hard, leading to processes and systems failing. It’s also important for organisations to be aware of their position within a wider supply chain, and to approach change with that broader perspective in mind. This means thinking about the ecosystems in which they operate and optimising those for sustainable productivity.

“The recent headlines regarding scarcity of critical components and services and the associated economic and social impact this generates has, once again, brought leadership focus onto the domain of supply chain management. Some sectors are already experiencing worrying levels of inflation and when coupled with no let-up in consumer levels of demand the only viable solution is to revisit the approach to planning. The role of new enabling technology and more innovative use of data will be critical,”

Alistair Kett, Operations Transformation Leader at PwC UK

This kind of approach is also vital for people entering the workforce. Many have expectations beyond the job – they want to contribute in ways that really matter, and to work for responsible businesses. This puts an ethical, social and moral lens on productivity. It requires collaboration and working in broad ecosystems with other organisations.

By building those ecosystems with an eye to productivity, organisations can improve resilience and sustainability, as well as that of the ecosystems they operate in. And the sooner they do this, the sooner they can reap the benefits of first-mover advantage.

Embedding net zero into operations

Climate change is accelerating the need for organisations in every sector to operate more sustainably, with expectations for responsible business and social governance growing among investors, consumers and others. Those that can optimise operations and supply chains will not only see improved performance but increased reputation and potential for investment.

Transforming for net zero will involve adopting advanced technologies such as cloud, automation, machine learning and artificial intelligence. These technologies can help organisations operate in ways that are optimised for maximum value under current conditions. Businesses can also improve sustainability in other ways, by reducing packaging, adopting green standards in procurement or decarbonising their fleets.

While all of these strategies boost an organisation’s green credentials, they can also help to improve productivity. By monitoring potential equipment failures before they happen, for example, smart sensors, predictive maintenance and the Internet of Things can reduce unexpected downtime and maintain output, keeping the business on target and driving growth.

Keeping productivity in focus

Preparing an organisation for the future means not just viewing transformation through a productivity lens, but changing the perspective on productivity itself. Where businesses might have once paid attention mostly to outputs, they’re increasingly realising the importance of inputs – such as how people spend their time and where they work.

Transformation provides an opportunity to unlock capital by optimising costs rapidly across the value chain to deliver productivity as a sustained outcome. But doing so will require leaders to transform their organisation while building resilience against future disruption, integrating agility to flex the output and consistently achieving customer service excellence.

It’s also important to recognise the challenges of working in an environment that is continually changing. The ability to optimise productivity will be critical to the survival, stabilisation and growth of organisations, with the effective triangulation of resource, process and supply being at the heart of operations.

Only by creating agility and efficiency within their operations, enhanced by technology, will organisations deliver better outcomes for their people, customers and citizens. The way to do this is by understanding future operational needs and developing a blueprint that unlocks investment and delivers productivity. By getting its productivity algorithm right, an organisation will be able to put in place all the pieces needed for success: The right people with the right skills. The right conditions at the right times. And the right resources for the right opportunities.

To discuss any points raised in this article, please get in touch.

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Alistair Kett

Alistair Kett

Partner, Operations Consulting Leader, PwC United Kingdom

Tel: +44 (0)7730 146256

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Contact us

Alistair Kett

Alistair Kett

Partner, Operations Consulting Leader, PwC United Kingdom

Tel: +44 (0)7730 146256