In business, maintaining operational efficiency is not just a goal, but a constant and evolving effort. Companies must continually assess and improve their processes to stay ahead of the competition.
Among the crucial steps in the journey to operational excellence are implementing proper business processes and integrating technology, both of which are vital to significantly improve overall efficiency.
This article delves into why businesses struggle to maintain operational efficiency, the benefits of measuring your processes, and how supporting your people and leveraging technology can improve employee productivity.
What is operational efficiency?
Operational efficiency is a term that refers to the ability of an organization to achieve maximum output while minimizing waste and productivity.
Operational efficiency is not just about cutting costs or reducing waste. It is about optimizing an organization's ecosystem, creating an environment that fosters teamwork, collaboration, and innovation.
Reasons businesses struggle with operational efficiency
Maintaining operational efficiency is crucial for any business aiming to succeed in today's competitive market, especially those in the transportation, manufacturing, and distribution sectors. However, many organizations often need help with this aspect.
There are many reasons why businesses struggle with operational efficiency. Some of the top reasons include:
- Employee retention issues
- Inefficient processes
- Disparate data flow
- Outdated technology
Employee retention issues
Keeping team members within the transportation, manufacturing, and distribution industries has become increasingly challenging due to multiple factors, including poor management, workplace safety, salaries below industry standards, and unclear career development opportunities.
When employees leave, it takes time and resources for a company to fill the skill gaps they leave behind and for a new employee to become familiar with the company's processes.
Inefficient processes
The efficient operation of a facility is impossible without standardization and clear steps in operational processes. Lack of standardization can lead to errors and waste. Furthermore, employees may be left to manage situations they are not equipped to handle.
Some examples of inefficient processes include poor maintenance or upkeep of machinery, failure to keep employees certified and educated regularly, scheduling gaps in production, and unsustainable processes.
Disparate data flow
As businesses embrace data-driven strategies, information flows from various sources. Consolidating this data is essential for generating reports to help businesses make informed operational and strategic decisions.
Outdated technology
Outdated manufacturing equipment and technology can hinder business operations by increasing maintenance and compliance needs. Additionally, these outdated technologies can make businesses vulnerable to falling behind their competitors.
Benefits of measuring operational efficiency
Measuring operational efficiency has become a critical success factor for companies across industries, helping them identify inefficiencies and bottlenecks in their processes, prioritize areas for improvement, and ultimately increase profitability.
Some of the significant benefits of measuring operational efficiency include:
- Increased profitability
- Improved company culture
- Company growth
Increased profitability
While this may seem like an obvious benefit, many companies overlook the serious reduction in costs that measuring operational efficiency can provide. Businesses need to assess key performance indicators such as output, production time, and labor costs to identify areas of improvement, ultimately creating better profit margins.
Improved company culture
Measuring operational efficiency is an essential component in improving company culture. A culture that values operational efficiency encourages employees to work collaboratively and diligently and make a conscious effort to improve their productivity. Businesses can only improve their output if their company culture values operational efficiency, especially in laborious lines of work.
Company growth
Smooth business operations pave the way for future growth. By combining employee productivity and automation, your company can flourish and meet urgent projects while using fewer resources than before. This will help you achieve operational efficiency within your organization.
6 steps to improving operational efficiency
Improving operational efficiency requires a step-by-step approach. Here are six essential steps that every business should follow.
1. Ensure employee wellbeing
Introduce fatigue management solutions
As a transportation, manufacturing, or distribution company, you often have more significant requirements for strictly managed shift and exposure time. It's crucial to have fatigue management solutions to ensure your employees stay within their allotted time on site.
Gallagher's Command Centre provides Fatigue and Exposure Management functionality to help you manage employee attendance and ensure that your staff follow the best practice requirements for their roles.
Furthermore, Gallagher's Regulated Zones proactively identify cardholders who have been on-site for extended periods and may be at risk of fatigue or extended time in a predefined zone.
Make random selection alcohol and drug testing easy and unbiased
Another significant factor in employee wellbeing is ensuring your staff are fit to work. Gallagher's Random Selection feature supports you to comply with health and safety requirements such as CSA and OSHA by randomly selecting employees for tests or checks.
Whether drug and alcohol testing, vehicle or employee spot checks, Random Selection ensures unbiased selection that can be configured to meet most health and safety requirements. Businesses prioritizing people's wellbeing are less likely to have health and safety accidents and reap the benefits of true operational excellence.
2. Stay on top of training and certification requirements
Ensuring your employees have up-to-date training and certifications can be challenging. Whether renewing their CLD licenses or forklift training, Gallagher can help streamline your business's requirements for a wide range of regulations with competency and compliance based access management.
Gallagher's Command Centre can check personnel at the door to ensure they are capable, qualified, and compliant with a wide range of standards and regulations before entering specified areas.
Our readers can display messages that prompt the employee to address any forthcoming license or training expirations proactively. For example, if an employee's first-aid certificate is due to expire in seven days, the system can display a message such as: "Your first-aid certificate will expire in seven days. Please report to HR for renewal." The user will receive this reminder daily until they complete the renewal process. If the employee's certification lapses, they will only be granted access to the area or vehicle once they renew their certificate.
Gallagher's solutions enable you to efficiently implement, enforce, and ensure business policy and process while meeting and exceeding CSA and OSHA requirements and automating your training management and compliance expectations.
3. Leverage automation and technology
Automate building management services
In a cost-driven and energy-conscious business environment, it is essential to have confidence that building management services are running efficiently and not consuming power and resources unnecessarily.
BACnet (Building Automation and Control Network) is the global data communications standard for building automation and control networks. BACnet empowers companies to leverage data from their access control solution to achieve energy efficiency.
Integrations with BACnet enable the automated management of utilities like lighting and HVAC units in your building. For example, when the building is unoccupied, lights can be set to turn off automatically. In addition, building temperature can be set to automatically adjust based on the number of people in a particular area to ensure the environment remains comfortable. This proactive approach not only saves energy but also helps save costs.
Using BACnet protocol enables effective communication between the Command Centre and building management systems, leading to significant cost and energy savings. By employing BACnet and Command Centre software, you can simplify site operations.
Streamline parking lot allocation
Managing parking space allocation and access can be complex. Gallagher's Carpark Management solution simplifies this process and allows you to configure your parking lot according to your employee and driver needs.
This solution enables facilities managers to make the most of the available parking spaces and promptly respond to non-compliant usage from one system.
4. Improve health and safety responses
Improved health and safety responses profoundly impact the operational efficiency of the transportation, manufacturing, and distribution sectors. These industries require high precision and coordination to ensure smooth and uninterrupted operations. However, any unforeseen event, such as an accident or illness, can quickly derail the entire system, leading to lost productivity and revenue.
Track personnel movements with Tag Boards
Gallagher's Tag Boards feature is the perfect tool for improving emergency response time and evacuation management. With Tag Boards, you can track personnel movements around your site in real time, giving you complete visibility of where people are during an emergency and ensuring that all employees are accounted for.
Send emergency messages with Broadcast Notifications
Maintaining communication with employees is crucial in an emergency or lockdown. Gallagher's Broadcast Notifications Solution enable businesses to send pre-configured critical instructions to multiple recipients in one simple step. These notifications can be set to automatically transmit when triggered by an alarm.
In non-emergency situations, ad-hoc Broadcast Notifications can communicate hazards on site or notify specific groups of shutdowns in their area. With the ability to reach multiple recipients quickly and accurately, the Broadcast Notifications feature within Gallagher Command Centre is a powerful, reliable solution for any organization within the transportation, manufacturing, and distribution industries.
By implementing effective health and safety measures, companies can minimize the risks of these incidents and ensure a safe work environment for their employees.
5. Improve operational efficiency with cross-team functionality
Cross-team communication is critical in enhancing operational efficiency across manufacturing, transportation, and distribution businesses. As your organization grows, it gets harder to collaborate and share information. Each department often has different expectations, KPIs, and outcomes they are looking for when speaking with others in the company. So, it’s important to keep goals aligned when it comes to cross-team functionality.
Utilizing a project management tool like ClickUp or Asana can provide much-needed visibility and keep everyone in active communication. As technology evolves, these tools are pivotal in ensuring operational efficiency, transparency, and successful project execution.
6. Experiment with new ways of working
Companies are looking for new ways to streamline their operations and reduce costs. This can be particularly challenging in manufacturing, transportation, and distribution businesses, where the complexity of operations can lead to inefficiencies and errors. New ways of working are emerging that can help these businesses increase their operational efficiency.
From automation and robotics to data analytics and strategies such as Lean Manufacturing, Six Sigma, Kaizen, and Total Quality Management, a range of approaches can be leveraged to transform how these businesses work. By embracing these new ways of working, companies can improve their productivity, reduce waste, and ultimately increase their bottom line.
Leverage your security to increase operational efficiency and maintain it
Running a successful business means constantly assessing your processes and ensuring they are current with the latest trends and technologies. This can be difficult, especially since operational efficiency is an ever-evolving goal.
A comprehensive approach that involves measuring your processes, supporting your people, and using technology is necessary to achieve operational excellence.
By integrating security measures with operational efficiency strategies, transportation, manufacturing, and distribution businesses can create safer, more productive environments, ultimately leading to sustained growth and success.
Contact our team today to learn how you can maximize operational efficiency within your organization.