The critical role of organizational scans in modern manufacturing

Navigating Through Dynamic Market Shifts

On average, industry leading enterprises have at least five strong priority areas compared to only about three areas for followers, many of which are focused on driving operational efficiency and digital transformation. When asked about the organizational performance over the past 12 months, leading companies performed much higher compared to followers in the following areas: cost avoidance, cost savings, internal stakeholder management, risk management, supplier performance, and sustainability.

Based on Deloitte’s Global Chief Procurement report¹ of 350 respondents, representing more than 40 countries, the top enterprise priorities defined in 2023 have been:

Figure 1. Top enterprise priorities in 2023¹

Based on the report –today’s leading companies continually work to pull themselves out of transactional processes and focus more on strategic ones, recognizing that while they cannot fully avoid transactional activities, the goal is to simplify and automate them as much as possible. Reduced focus on the transactional gives them more time to spend on strategic activities like business engagement or supplier collaboration as well as on transforming and digitizing their procurement function.

Leaders can achieve this through several key strategies

- Standardizing processes/policies (including systems and data) and using flexible automation tools (e.g., low-code/no-code and self-service) and methods (e.g., Agile approaches for iterative design/build/realize).

- Creating purposeful/thoughtful teams focused on efficiently and effectively executing common tasks in shared services or centers of excellence (CoEs) (e.g., business engagement, sourcing, contracting, risk management, and analytics) and composed of internal and external specialists.

- Using outside intelligence to help the highest-priority opportunities reach the target

- Formally planning/coordinating their efforts on prioritizing focused transformation that enables the greatest value, defending the high ground, and better navigating the challenges of having to chase the latest shiny object in the business.

This chart highlights key approaches leaders use to handle increasing workloads:

Figure 2. Strategies to manage workload¹

Responding to Global Market Dynamics

The external market landscape continues to evolve rapidly. It seems like only yesterday that we were trapped in our homes by the COVID-19 pandemic, yet since then, it’s hard to imagine all the events that have happened impacting the global economy.

Procurement plays a big role in helping address the top risks and issues most businesses face. Recessionary fears and increased demand by customers and regulators (especially related to ESG and the International Organization for Standardization) also prevail — areas that many are still working out how to manage and drive impact against.

Unpacking all the above reveals the top two internal issues as follows based on the report¹:

- The loss of critical talent was the top internal issue with 47% of CPOs citing it as a high or moderate impact;

- Internal complexity (e.g., organizational silos or non-standard processes) was cited by more than 32% of CPOs as a “top 3” issue.

Furthermore, a comparison of the results from 2021 to 2023 reveals significant changes in the top 10 risk scenarios, as outlined below: 

Figure 3. Top risk scenarios presenting the greatest risk¹

In the light of all these challenges, the need for organizational effectiveness and readiness has never been more pronounced. As companies navigate through fluctuating markets, technological disruptions, and increasing regulatory pressures, the ability to swiftly adapt and respond to these changes is paramount.

Embracing Operational Excellence

In today's competitive landscape, operational excellence (OPEX) is crucial for any organization aiming to thrive. The following diagram encapsulates the core benefits of enhancing operational efficiency through a structured approach. This framework not only aims to reduce costs and improve efficiency but also enhances organizational flexibility and customer centricity. Each aspect interlinks to support a holistic improvement in both internal processes and customer-facing operations, ensuring that companies can adapt swiftly to changes while maintaining or increasing value to their customers. Many of the leading companies are masters of balancing between these three drivers.²

Figure 4. “Magical Triangle” of OPEX goals

Deloitte Solution: Organizational Scan

Our Organizational Scan provides a clear, objective picture of a company's current state, offering actionable insights that lead to better decision-making for setting the balance of the OPEX triangle. For manufacturing organizations, where precision and efficiency are key, being organizationally sound might mean the difference between leading the market and lagging behind.

Utilizing the insights gained from organizational scans allows companies to fine-tune their strategies, align their resources more effectively, and  improve overall operational efficiency. In the competitive field of manufacturing, where every second and every euro counts, making informed decisions based on a comprehensive organizational scan can lead to substantial improvements in both productivity and profitability.

How Organizational Scans Address Manufacturing Challenges

The Organizational Scan meticulously assesses areas like organizational structure, planning ceremonies, leadership effectiveness, documentation standards and strategic alignment, providing a categorized action plan for improvement. For instance, a scan can reveal bottlenecks regarding critical knowledge, lack of consistency in delegation and monitoring or gaps in technology usage that, once addressed, can enhance operational agility and reduce costs and operational risk. Moreover, by fostering a better understanding of leadership and governance structures, companies can streamline decision-making processes crucial for responding quickly to market demands. The powerful Organizational Scan helps businesses identify strengths to build on and weaknesses to address, ensuring that they are not just equipped to survive but primed to thrive.

How to Access and Complete the Shortened Version

Interested in seeing how your organization measures up? Accessing and completing the short version of our tool used for Organizational Scan is straightforward and provides immediate insights that can serve as a benchmark for further analysis.

Simply visit the Organizational Scan link  to begin the assessment. The process is designed to be user-friendly and can be completed in less than 10 minutes. Once you start the survey, you'll be guided through a series of questions about various aspects of your organization.

Upon completion, we will prepare the report that outlines your companies score compared to the other participants values, highlighting the same industry scores and send it into your inbox in a couple of days. As a professional firm, we uphold strict confidentiality standards; please be assured that no specific company data will be shared or presented, only aggregated industry insights. However, this report can serve as a valuable tool for understanding your current organizational health and planning your next steps.

Call to Action

Don't wait to find out how you can improve your organizational efficiency. Take the first step today by completing our shortened Organizational Scan. Discover your strengths, pinpoint areas for improvement, and start making strategic decisions that drive real results.

For more information or to schedule a detailed consultation, please contact our organizational excellence specialists, Eszter Lukács and Péter Nyári. Our team is ready to help you translate assessment results into actionable strategies that propel your organization forward.

Endnotes

¹https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consulting/us-2023-global-chief-procurement-officer-survey.pdf

²Driving Operational Excellence at Automotive Captives - Issue 1