Overcoming the ‘black box’ in operational efficiency

These tips about reviewing your technology and the way your team work could help you improve your business’s operational efficiency

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Australian businesses are growing up and competing with the rest of the world. The land down under is still seen as a young nation in business and has often generated the perception of being behind the times compared to the rest of the world that has grown up, surpassed adolescence and embraced the clear adult thinking that is required for businesses to get ahead. Australian businesses have achieved this through their pursuit in excellence for operational efficiency. In 2015, several Australian businesses reported double-digit profit increases as a result of improvements in their business operations. Strong growth has been dominant across the warehousing and manufacturing industries where the development and storage of stock inventory has shown significant improvements year on year over the past decade.

Both warehouse managers and their staff are reaping the benefits and fruits of their labour as industries are set to gain more job openings for skilled workers. Furthermore, as more money is saved and earned by the different businesses, more money can be distributed across staff members.

Blue-collar workers can benefit from their efforts and reap white-collar wages.

Up to 25% of the blue collar workers in the industry may benefit from increased wages should the trend of operational efficiency continue as the historical patterns have show. One of Australia’s leading businesses, National Storage Solutions has observed 5 key factors in the success of businesses that have improved or are benefiting from their operational efficiency.

1. Businesses were committed to developing a dedicated goal and roadmap towards operational efficiency.

These businesses had already identified that they had inefficiencies within their organisation that was leading to wastage and extra costs. The commitment to reducing these areas of wastage and to pursue avenues that will improve efficiency has been the turning point that most businesses needed to reduce savings and to further improve revenue and profit growth.

2. Leveraging cloud technology to improve remote collaborations

The rise in cloud technology has enabled businesses to improve their operations outside of area and location restrictions. Businesses and staff can fulfil meetings and ongoing working developments rather than being restricted by the inabilities to communicate or collaborate on tasks. This means staff can meet or exceed delivery deadlines that can further positively impact business operations and efficiency.

3. Incentive pays (pick packers)

It is important to have measures in place that will motivate your staff to improve their performance. Within most warehouse environments, you will have pick packers that will make up around 50% of your working force. Some of the Woolworths warehouses in Australia offered picking and packing incentives to their staff to receive 20% bonuses in their pay over the week if they performed at 140% of their targeted performance. This saw the business become more efficient and save costs, while the employees were set to earn more. It was a win-win situation.

4. More effective supply chain management

Businesses must seek to enhance the supply chain management within their warehouses and their storage facility. Management will need to consider changes to supply scheduling in loading docks, the use of pallets, the stock rotation system, purchasing terms and conditions, packaging, labelling and shipping.

5. Saas vs. Licensed software

It is important for businesses to have the right software that will enhance their productivity and overall operations, however a licensed or internally developed software can prove to be expensive. Furthermore, the software may need to be replaced once every 5 to 10 years with the necessary updates and upgrades in between. Investing in Saas (Software as a service) gives businesses the opportunity to gain the software at a lower cost and relies on the updates or upgrades from the host company. Quite often, these Saas solutions can improve the warehousing operations and decrease the overall costs.

Australian businesses are not only on the right track, but are poised to make their mark on the domestic and international stage should they maintain the positive momentum in operational efficiency. What was once the black box in a sunburnt country has too soon become an open gift box for those willing to deal with those businesses in the pursuit of operational excellence.

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