How to identify and capitalize on opportunities for rapid ROI

by Janice Allen
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Jay Milligan, President and CEO, CCi. Jay has more than 30 years of operational leadership experience across a variety of industries.

It appears that economic uncertainty and business disruptions are here to stay. The United Nations Department of Economic and Social Affairs notes in its mid-2023 report “World Economic Situation and Prospects”. that the current global economic situation remains highly uncertain due to an “extraordinary confluence of recent shocks”, coupled with turmoil in the banking sector and continued inflation in many countries.

In most industries, operational performance is measured by KPI targets. For example, in the manufacturing industry, typical KPIs include metrics such as production throughput, cycle time, equipment effectiveness, demand forecasting, inventory turns, changeover time, and first-pass yield.

When these metrics fall short, operational leaders must act quickly to stay competitive by identifying high-impact opportunities for performance improvement within their organization. By focusing their efforts on quickly capturing required efficiencies and KPI improvement, they can quickly drive positive change.

Where to start

Improvement projects usually start with recognizing that your company is not performing well or could do better. However, many organizations don’t know where to start when identifying the root cause of the problem, which means they can’t accurately determine the “price” (potential KPI improvement) or prioritize their targeted improvement efforts.

To address this issue, I would recommend conducting a loss and waste analysis, a streamlined process for analyzing the key performance areas that drive value chain competitiveness, then quantifying and prioritizing the scale of improvement opportunities .

It is important to note that while the loss and waste approach originated in the manufacturing sector, it can be applied in any industry to identify major losses within the company, such as excessive operating costs or lost production time, and find potential areas for improvement.

Identify the short-term opportunity catch

Once the appropriate level of detail has been gathered from the loss and waste analysis, each prioritized loss should be financially quantified and verified by your operations and finance teams.

Also consider bringing in outside experts at this stage. I’ve found that many organizations need external, objective and hands-on support to provide an unbiased perspective and help them step out of their comfort zone and jump-start their business transformation journey.

Once you’ve assembled your team of experts, I recommend guiding them to look for the following key features of a worthy short-term ROI opportunity:

1. Low initial investment required. By focusing on opportunities that require a low upfront capital investment, you can minimize risk and achieve faster returns. Examples of opportunities that require a low initial investment include optimizing inventory management or improving employee training and development.

2. High ROI potential. When considering opportunities for improvement, it’s essential to ask, “Where can we get the greatest ROI gain by applying focus and resources?” Conduct a thorough assessment of the opportunity’s potential impact on metrics such as production costs, sales revenue, and product quality to guide your decision-making process.

3. Short time frame. Searching for projects that can be implemented quickly yields faster results and allows you to adjust your strategy more quickly, so you can make further improvements if targets are not met.

4. Scalability. Find a solution that can be easily replicated in other parts of the business. To maximize ROI, start with a small initial investment, as mentioned above, then gradually expand the initiative as you begin to see results.

5. Durability. Don’t just look for quick fixes, choose projects that can be sustained over the long term through the implementation of best practices. This is key to ensuring continuous sustainable improvement and creating a real competitive advantage.

Once high-impact opportunities have been identified and management buy-in secured, build your performance improvement projects and bring in the right people with the right skills to execute on your strategy.

Sometimes it’s just not practical to hire all the necessary resources internally and you need to look externally for resources with proven experience in multiple successful projects to help achieve the needed results.

However, I’ve found that it’s also best to keep investing in your people through upskilling, leadership development, coaching, and celebrating incremental wins to inspire a culture of continuous improvement. This is vital not only to capture the desired performance acceleration and ROI in the short term, but also to ensure continuous sustainable improvement.

Fast ROI Manufacturers face triple pressure as global supply chain constraints, inflation and talent shortages put the industry under tremendous pressure. As a result, operational excellence leaders are torn between short-term recession relief and longer-term growth strategies. But what if you could do both? By identifying and leveraging high-impact improvement opportunities, I believe you can achieve a rapid ROI and stay competitive.

The key is identifying the improvement opportunities that will have maximum impact, addressing them through structured improvement projects, empowering employees to take the initiative and lead, and sustain the benefits through continued implementation of best practices.


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