Leveraging Technology to Build Operational Excellence

Have you ever wondered as to what it is that makes the Market Leaders perform so well in the market and command as well as sustain the leadership position?. Well, the answer lies in their ability to choose the right marketing value proposition and build the entire business model as well as operations aimed at delivering the said goals. Such a plan calls for strategic planning, management, investment as well as ability to sustain and continue to achieve operational excellence.

If an organization let us say an airline is committed to customer service and promises hassle free and speedy checking in process, then it has got to have an operating model that can make this happen. The entire operational process, management system as well as the IT systems would need to be equipped and geared up to deliver the promise.

The airline would need to invest into IT systems and solutions that can manage the check in process efficiently with minimum process time.

The ground operational processes would need to be streamlined with the systems and the staff trained and retrained in carrying out the processes efficiently.

Without investing into the systems, process and people, the airline cannot deliver its promised value to the customer.

When it comes to re-engineering the entire Organizational model and processes to be compliant with its offering to the customers, GE stands apart as an example. At a time when the white goods sales channel entailed inventory holding by the Stockists and dealers and the sales representatives were used to pushing the dealers to buy more and stock in order to show more billing on the part of the Organization, GE decided to work on a revolutionary business model.

Having realized the fact that holding inventory at dealers level did not contribute to a healthy profit margin for the dealer and consequent drop in demand from GE, as well as the fact that billing to the dealer did not really amount to sale of the product to the customer and the price war in the market, GE decided to re-define the entire supply chain model.

Using technology to drive a seamless process that provided visibility at each and every point of action, GE offered a direct connect system to its dealers whereby they could use the concept of virtual inventory and book orders online 24 hours basis on 365 days without having to hold inventories at their end. The system further enabled the dealers to receive the order confirmation, the actual discount they would be getting as well as the delivery scheduling etc.

Further GE tied up with its subsidiary financing company to offer 90 days credit to the dealers in return for a firm commitment on payments from the dealers on due date as well as commitment to use GE products to contribute to at least 50% of the dealer’s turnover. This was not all, GE also re-engineered and implemented systems to drive forecasting, material planning, procurement as well as production and delivery scheduling based on and linked to online customer order.

Thereby GE was able to reduce its inventory holding as well as manpower costs to a large extent while increasing the efficiency of service as well as a better value proposition to the dealer helping him to cut his costs too.

To provide the new value proposition and make things happen, GE had to change its operating model, business processes, IT and Management systems as well introduce Quality management systems as the guiding principles and build a culture throughout the organization that was conducive to meeting its goals. Brand leadership automatically followed.

❮❮   Previous Next   ❯❯

Authorship/Referencing - About the Author(s)

The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.