There are fundamentally three “forces” within a business which can contribute to significant changes in its products, efficiency and profitability.
- Marketing
- Manufacturing
- Research and Development
It is arguable that finance is a fourth dimension, but in this context the role of finance is often more about evaluating rather than identifying opportunity. However that department can have an important role in identifying high cost components in the business which can then be addressed elsewhere.
What is comparatively rare is these three dimensions communicating openly with a single purpose. This is because the individuals concerned generally have quite different objectives and limited understanding of the cross functional opportunities which may be present.
None of this is meant as a criticism, it is just a frequently observed situation which when resolved can give enormous opportunity.
A three dimensional co-operation with a willingness to explain and explore can release potential for many businesses at relatively modest cost.
The Issues
Marketing departments tend to be focussed on growth through existing and new products which they see as integral to brands and positioning. They rarely have an understanding of what manufacturing may be able (or unable) to produce with modest change or investment.
This can lead to projects which are high risk in terms of cost and potential redundancy but which have high apparent rewards if they are successful. There is rarely much evaluation of “how do we recover the cost if it doesn’t work out” – or what flexibility can be built into the concept.
Manufacturing departments are focussed on efficient operation and managing costs. They are rarely motivated to consider what other things they could do with their manufacturing resources – often they are just too busy “keeping things going” to be able to think more widely.
There is often a lot more capability in existing equipment and processes than is realised. Sometimes this is because the manufacturing team have not been exposed to the equipment supplier and are simply not aware of existing wider capability. There can also be “fixed” views on manning levels and operating hours which have to be challenged.
Manufacturing also have a responsibility to “push back” on the cost of factors like frequent product changes or multiplication of similar products
Research and Development departments are frequently focussed on new products, new ingredients and cost reduction, often without close links to the priorities and opportunities in manufacturing or the flexibility which may be inherent in a marketing “brief’.
They have a potential capability to draw together a fuller picture of ability and aspiration by facilitating a wider understanding of the real capabilities of a business.
How can this trio of capability but perhaps “lack of understanding” be brought together to the benefit of the business?. The answer possibly lies in “extending the question” and being willing to listen to and understand the driving forces in other areas of the business than your own.
We have a “cloud of opportunity”
This approach is similar to that promoted as “eliminating silos” – think about relationships and opportunities for the business as a whole rather than those limited to your own part of the business
The Opportunity
This approach does require some change of thinking and perhaps some changes in prioritising objectives for individuals. However the overall effect on the business should be positive.
This also needs to be led and endorsed from the “top down” with a clear understanding that there are no such things as “silly” ideas – they are often the very things which release real innovation
Another important component is the ability of an individual in any area to present, either verbally or in written form, a coherent and convincing argument. The importance of this is frequently under estimated.
Exploring this idea in a little more detail.
Marketing would normally base their programme on what they believe to be market opportunity. There is no suggestion that this is wrong and FMCG businesses in general need to be marketing lead. However by listening to other sections of the business with an open mind they may become aware of opportunities which may be realised quickly and with minimal resource input. Sometimes even a small change in the brief can greatly facilitate development, cost and ease of manufacture.
Marketing don’t need to be come experts in other functions, but they do need to be willing to listen and debate.
Manufacturing needs to understand and explore fully opportunities which they may have. This can be in terms of capability within existing equipment, capacity which can be released by planning, ingredient yield and optimising operations. Opportunities may also exist in capacity, unit sizes, pack formats and other areas which are restrained by closely defined requirements.
Manufacturing management tend, quite correctly, to be focussed on delivery and efficiency so some changes in structure may be beneficial in identifying and evaluating opportunity. “Embedding” R&D personnel into manufacturing operations can be very beneficial – manufacturing setting priorities for R&D personnel working in their area on a full time basis while those people retain their structural links with their own department.
The ways in which ideas are presented are very important, there must be a constant willingness to debate ideas and to be flexible and innovative. Equally, cases must be properly analysed and explained.
Research and Development have a key role in this dialogue as they should have knowledge about both areas of the business as well as potential benefits which might arise from changes in formulations, ingredients, process conditions etc. R&D may also be a source of ideas about how other factories or even rival businesses have improved costs and efficiency.
R&D often have a role in quality control and maintaining product quality must be a key component of discussions. However there must be open mindedness to accept opinions about issues which do not affect consumer acceptability but which may have become institutionalised internally.
It is important that marketing “briefs” to R&D and equally technical problems raised by manufacturing are considered and discussed within the concept of “but what could we all do quickly and at minimal cost to resolve this”.
Speed is in itself an opportunity, to do something quickly which has a value but which also has a degree of compromise can often be more advantageous to a business than a longer and more expensive solution aimed at achieving “perfection”