According to the International Monetary Fund (IMF), the world economy grew 3.6% last year and is projected to grow 3.7% this year. This has caught a lot of companies off guard and they are struggling to meet demand. Many of our clients are asking us how they can increase throughput, OEE or improve labor productivity.
One challenge for large multinational companies is to “get more” out of their labor pools and share resources across organizational units or countries. Surprisingly, this can be done quite easily.
Five critical success factors for an Effective Resource Sharing Architecture and one pitfall to avoid:
1. You need a solid Sales & Operations Planning Process which translates customer demand for your products and services into demand for your resources.
2. The output of the Sales & Operations Planning process needs to be a Resource Demand Schedule which allocates resources to activities. Depending on your type of business, these activities can be projects, or other routine-related activities. The key here is that your business has an accurate profile of the demand for resources for the weeks and months ahead.
3. You need to know who can do what. If your company runs a large call center, has large back office operations or a large pool of engineers, without some sort of skills or qualification matrix you will never be able to facilitate any sharing of resources. Most companies focus on qualifications or specific skills but the number one criteria in a multinational context is probably language. In some industries, your skills matrix may also need to reflect regulatory constraints.
4. The sharing of resources must be facilitated in a structured way. I have had very good experiences with weekly or monthly resource management meetings at different levels of the organizations. In a back-office banking environment, the first level of resource sharing takes place between groups of a department. The next level of resource sharing then is between departments and, last but not least, between departments in different countries.
Starting at the smallest organizational units, the Group Leaders must try to alleviate any resource imbalances within their group. At the next level, the Department Manager facilitates the sharing of resources across the different groups and lastly, the Divisional Head facilitates sharing of resources across departments and countries.
5. The last critical success factor is one that is often forgotten or not taken seriously enough. Simply stated, you must ensure that “discipline and follow up” are systematically anchored in your Management Operating System. The most effective tool is having a simple action log in which all actions are recorded and then followed up until completion.
A simple process can be built with simple tools!
We have seen large organizations building very sophisticated IT solutions to facilitate more effective resource sharing. In some cases, their skills matrices were linked to their HR system – “which are almost never accurate” – or the resource demand plans were built with a software tool which nobody understood or knew how to use properly.
Many clients think that Industry 4.0 means they must introduce sophisticated tools to be “digital ready.” I am not opposed to sophistication, but according to Gartner some 75% of IT projects fail to deliver their benefits.
In my view, they fail because they underestimate the human aspect of change. If you want to introduce an Effective Resource Sharing Architecture, build it with your people in mind, not with your software tools in mind.
At Proudfoot, we specialize in operational and people transformation programs. We know how to partner with organizations to solve strategically important problems that impede top-line growth, or bottom-line results.
What if you could utilize your most valuable resources in a more effective way?
With Proudfoot, you can.
Article by Tim Gaffron, VP Operations, Proudfoot UK.