Key Success factors in Operations

The following are mentioned by experts as the key success factors for any business:

1. Product performance
2. Technology leadership
3. New product introduction
4. Access to key decision-makers or key influencers
5. Delivery service.

For a given industry, one or more of these factors will be crucial. For instance, in a sunrise industry such as the computers industry, the key success factors will be technology leadership and new product introduction. For a routine household product such as a tube-light or bulb or a ceiling fan, the key factor is the product performance. For an industrial product such as a machine-tool, the key factors are product performance, delivery service and in some cases new product introduction. A company manufacturing and selling standard agricultural pump-sets in India found that the key success factor was the locally available village mechanic who was found to be always consulted by the farmer in making his choice of a pump-set from amongst a group of several competing brands providing almost the same level of performance. Similarly, in project marketing where complete/partial systems or large complex equipment is to be sold, installed and commissioned, the buyer companies generally go by the opinion of their technical consultants. The village mechanic and the technical consultant are the key influencers.

In government projects / contracts or in any bureaucracy the access to key decision makers is a major success factor for business. Here, the authority is concentrated in one person or in one department who may or may not understand all the nuances of technology improvements or of new designs of products. Since the sales are generally in bulk, the delivery also is usually not a problem or a key factor. Access i.e. having open channels of communication with the decision maker goes a long way as the credibility is already established.

There could be operations/manufacturing related issues with each of these key success factors. If it is product performance, then the concerned operations issues would be, the quality management system, the attitudinal aspects of the operating personnel, the process variability, etc. If it is ‘access to key decision makers’ then only these happen to be technical/operating people, the relevant manufacturing issue in a small measure could be the other success factor which is product performance; otherwise, there is no manufacturing issue or strategy to go along with that they success factor.

Whatever one may talk about the operations/manufacturing strategic issues, the relevant strategic plans cannot be implemented unless one takes a good look at the company’s internal strengths and weaknesses. For instance, a century old Indian company fluid handling devices has very old equipments and equally old less skilled people manning and managing the production facility. It is pointless to attempt at ‘technology leadership’ and/or ‘new product introduction’ as a key success factor for that company The system is ridden with inertia and the only manufacturing strategy that might work there would be to keep producing a product of consistent quality with some improvement in manufacturing lead times. Sweeping changes in manufacturing are not possible within such a set-up. The company has been attempting a complete change in the organizational structuring through a new set of strategic business units (SBUs). While bringing in focused profit-orientation through SBUs is a good thought, it fails to address the real problem. Results of such restructuring could only be quite cosmetic and frustrating. Restructuring and therefore trying to bring in enhanced adaptation and responsiveness through the profit orientation is possible only if the system had not rigid in the first place. An organization does not automatically become more flexible because of an increased profit orientation. This is wrong medicine administered, because the diagnosis is not accurate.

Opportunities are those events currently occurring or the potential events where a company may additionally exploit its strengths – strengths being those activities, resources, systems, procedures, technologies, knowledge base and skills which the company has distinctively better as compared to its competitors. For instance, if an engineering company has foundry technology as its strength, the company should chalk out its future strategy in terms of a superior product and perhaps a greater product range in a bullish market. The latter (a bullish market) is an opportunity which can be made use of by the company through its manufacturing strategic response Similarly, the company can overcome the threat of the entry of multinational competition through a positive strategic manufacturing action of providing quality and variety using the company’s own internal strengths.