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Enterprise Operational Excellence
R.E.V.O Group provides an approach to Operational Excellence that delivers real financial returns and performance optimisation through process improvement and innovation.
Operational excellence can be defined as the outstanding performance of operational processes within the organisation which will manifest itself in high process efficiency and quality, less waste, low production costs, 'being in control' of the process flows, an innovative and agile organisation and the ability to meet client's expectations. Our aim is to bring customers to a sustainable continuous improvement organisation that delivers superior services at the lowest possible costs.
Operational Excellence involves reaching the pinnacle in the execution of business processes-allowing you to conduct business in a manner that satisfies customer demand, improves quality, generates higher yields, faster throughput, and less waste. Operational Excellence is now as relevant in commercial and service sectors as it is in traditional product manufacturing industries.
R.E.V.O Group's Enterprise Operational Excellence approach offers a proven, structured model, bringing together the main elements of performance improvement that impact people, processes and technology.
This integrated approach delivers improved benefits compared with more traditional models. Whilst Operational Excellence programmes can be costly, our method focuses on maximising return on investments. Even smaller projects can deliver rapid payback and significant benefits.
R.E.V.O Group's goal is to help clients increase shareholder value with speed and efficiency by getting closer to their customers, collaborating with suppliers, leveraging emerging trading communities, and making use of information flowing within and across company and geographic boundaries.
The Organisational Setting:
There are six areas that encompass all of the main areas that an organisation must address when striving for Operational Excellence.
- Strategy - Connecting the strategy and vision of a company to tangible operational goals, from which detailed and/or shorter term operational targets can be cascaded.
- Process - Defining the primary, priority processes of an organisation and finding ways to optimise and redesign them, whilst ensuring alignment with strategic goals.
- Assets - Investigating the best way to use fixed and variable assets (such as knowledge and resources).
- Organisational Model - Designing and structuring the governance model and the way in which it is applied to ensure organisational capability and capacity that enables effective strategy fulfilment.
- Culture - Recognising the way in which human capital is deployed in a company and how they support the agreed strategy and values. We further create the platform for sustainable change within the enterprise.
- Product/Service - Ensuring that product, service, and customer relationship matter, and are addressed in line with the agreed strategic goals.
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Identifying the challenges:
Our issue-based approach uses techniques such as root cause modeling to identify specific challenges, the focus points for action, as well as their interdependence and priority, thereby identifying the appropriate tools with which they can be tackled.
Selecting the Tools:
Our approach calls on revolutionary methods to deliver Operational Excellence. Each of these techniques is directed at a specific area for operational improvement. Together, they can be used to address a wide spectrum of potential operational challenges.
R.E.V.O Group Operational Excellence solution set consists of deep expertise in:
Productivity Optimisation
High direct labor productivity provides a solid foundation for a cost efficient operation. In order to maximize or optimize productivity it is essential to understand the current capacity and performance baselines. The elements of the R.E.V.O Group approach to improving productivity are:
- Productivity, Capacity and Mix Analysis: What is the Operational capacity versus actual performance?
- Downtime, Lost Time Analysis
- Process Readiness
- Process Downtime
- Maintenance/Equipment Downtime
- Support: Materials, WIP and Work Order related downtime
- Yield and Utilisation, Product Quality and Scrap
- Baseline of Labor hours and cost
- Productivity Improvement Opportunities Gap analysis and Work Plan
Manufacturing Optimisation
Manufacturers continue to face the unique challenges created by a rapidly changing global marketplace. Besides fulfilling the ever-growing demand for innovative, quality products, manufacturing organisations today need to increase operational efficiency and constantly reduce costs while working and partnering within a global supply chain. In response, companies are transforming - and they will need to accelerate their transformation to remain competitive.
Because of our extensive experience working with manufacturing companies, R.E.V.O Group is uniquely placed to understand and address the industry's key challenges, which can be summarised as follows:
- Product diversification
- Price pressure
- Greater customer demands
- Ongoing consolidation
- Large, outdated application portfolios
- Compliance
- Time to market
- Increasing competition from new entrants around the globe
- Globalisation and standardisation
Operating in today's network of partners and suppliers means every company will, at some stage, face some or all of these challenges. R.E.V.O Group's approach is to look for solutions that not only address the immediate problem but will also be sustainable over the longer term.
R.E.V.O Group's business and technology skills, rapid delivery, collaborative approach and ability to design business strategies from concept development to implementation to operational assistance, are assets that can help our manufacturing clients succeed in this complex environment.
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Sourcing and Procurement Optimisation
For Public, Private Enterprises and Private Equity Portfolio Companies, R.E.V.O Group focuses on producing tangible financial savings. Our Strategic Sourcing efforts are successful because we:
- Employ cross-functional, mixed client - R.E.V.O Group teams backed by a structured governance mechanism
- Primarily focus on business / stakeholder engagements at all levels
- Apply our structured and stakeholder intensive strategic sourcing and relationship management process
- Employ an advanced set of sourcing levers across all direct and indirect spend areas
- Deliver measurable savings that can be traced to the bottom line
R.E.V.O Group implements structured strategic sourcing programmes. The structured R.E.V.O Group Strategic Sourcing Programme comprises of the following steps:
Opportunity Assessment
To identify and prioritise opportunities, R.E.V.O Group conducts a thorough strategic sourcing analysis, where we:
- Gather spend data and build a structured spend tree
- Conduct diagnostic interviews to gain an understanding of current procurement practices
- Profile sourcing category opportunities
- Opportunity prioritisation
- Develop a prioritised delivery "wave chart"
- Agreement and buy-in from senior management on priority opportunities
- Launch strategic sourcing implementation to realise agreed upon ROI
Category and Supplier Strategy
- Detailed category profiling to understand needs, requirements, volumes, purchase patterns and current pricing
- Supply market analysis
- Total Cost analysis
- Development of category and supplier strategies
Category Sourcing and Supplier Value Creation
- Create and issue Requests for Proposal
- Identify and segment target suppliers
- Evaluate bids and develop negotiation strategies
- Conduct value / total cost of ownership (TCO) analysis
- Facilitate selection and negotiation with short list suppliers
- Agree targets and identify value / TCO realisation plans
Category and Supplier Management
- Implement contracts with selected suppliers
- Implement value / TCO changes
- Implement and track category, as well as supplier KPI's
Enterprise Spend Due Diligence Services
R.E.V.O Group performs analyses to identify and quantify procurement savings and make an overall recommendation with regards to potential acquisition candidates. R.E.V.O Group works with companies to review various aspects of the business. This can include:
- Collecting all relevant and available data and information related to the company's procurement process and expenditures, as well as other areas including sales, marketing and product/service offering
- Conducting research related to the client's industry, competitors and suppliers
- Executing a general strategic sourcing assessment to highlight potential opportunities to capture incremental EBITDA
- Reviewing all sales and marketing operations, organisational structure and product/service offerings to identify areas for revenue growth
Procurement EBITDA Impact
For companies in the process of being sold, R.E.V.O Group conducts a detailed analysis of the procurement landscape and generates a plan to identify and quantify procurement savings that will result in incremental EBITDA. This plan includes:
- A detailed review and analysis of each high expenditure category and supplier
- Specific next steps and action items for securing savings by category and supplier
- Identification of potential incremental EBITDA based on highlighted opportunities
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Supply Chain Management (SCM)
Managing Supply Chain Transformation
Companies have spent a lot of time understanding how they move goods through the supply chain, but now they need to understand the information sitting within it. We are moving towards an intelligent supply chain-an all encompassing view that provides a very high level of visibility, enabling you to make proactive, rather than reactive, decisions. The need to reduce costs remains, but there is a growing realisation that unlocking value within the supply chain is crucial to delivering strategy, - be that buying goods more intelligently, producing goods more efficiently, or collaborating with suppliers more effectively. Companies need to take a total cost view of the supply chain and develop mutually rewarding relationships with their suppliers and customers.
Blending consulting and industry experience, R.E.V.O Group does not just advise our clients on what suppliers they use, we can help develop the relationships for them. We have the theory and the practice that differentiates us from a lot of our competitors. Ours is a relentless pursuit of excellence in the supply chain.
Back Office Excellence
Managing Back-Office Transformation
Leading companies recognise that the back office represents a tremendous opportunity to create leverage for the business. Global and regional service centre's, both captive and outsourced, as well as stronger systems technology and telecommunications capability, are making it increasingly possible to both reduce costs and improve services to the enterprise. R.E.V.O Group brings a wealth of capability and experience to back-office transformation. We understand when it is right to invest in leading-edge or tried-and-tested technology. We help our clients get the best value out of their back-office processes.
Enterprise Asset Management
Increased regulation, tightening profit margins, and ambitious asset utilisation targets are pushing organisations to new frontiers in how they manage their asset base. The result is twofold. Firstly organisations require that ageing equipment is kept working past its original replacement date, due to the expense and complexity of procuring, installing and running the new equipment; and secondly that when new equipment is installed, it is required to deliver ever more aggressive Return on Capital Employed (ROCE) targets, due to competitive market pressures.
To meet all these challenges, and ensure the delivery of effective and efficient products and services to their customers whilst ensuring expected shareholder returns, businesses are being forced to rethink how they treat their installed asset base - from the traditional, operational view, to one where assets are considered as an integral part of the business strategy with clear plans for their investment, operation, maintenance, and ultimate disposal.
As a result Asset Management is now being viewed by many different organisations as a strategic necessity:
- Service companies see it as vital to ensure the effectiveness of their delivery infrastructure;
- Healthcare operations see it as the bedrock to ensure the correct equipment is available to be placed at a patient's bedside when needed;
- Local government see it as necessary to supply effective support to their citizens through the supply of safe council housing and other amenities such as street lamps and pavements.
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R.E.V.O Group's Enterprise Asset Management model clearly articulates these changes, containing clear elements for formulating and managing Asset Strategy, Asset Effectiveness and Asset Efficiency, with additional elements for Asset Governance and the integration of Asset Information.
R.E.V.O Group Enterprise Asset Management solution considers three operational elements-Asset Strategy, Asset Effectiveness and Asset Efficiency. These establish the business targets against which the asset will be managed, and ensure the effectiveness and efficiency of the asset management system to deliver against these targets. In addition there are two additional and equally important, elements-Asset Information and Asset Governance. These drive the consistency of the management information and knowledge required by the organisation and its associated infrastructure, and ensure the continued alignment of this entity with the enterprises strategic needs. Each of these elements is described below.
Asset strategy
This will set the overall policies within which the assets will be managed and operated. Key considerations are the establishment of an acceptable balance between the desired operating costs, the acceptable business risk and the desired operational performance, and the integration of this strategy with the delivery of the business's financial targets. One area of policy that is often considered revolves around the opportunities and risks in outsourcing all or part of the asset management capability. Development of effective asset strategies will allow competitive and regulatory challenges to be quickly faced and paths of resolution clearly identified in line with other strategic goals of the organisation. Typical strategies that are considered are the in-sourcing or out-sourcing of one or more of the asset management or maintenance capabilities.
Asset effectiveness
This is primarily about managing the asset base to ensure it effectively delivers against all expectations at the expected cost. This element sets and defines the policies for managing the assets. This will include the identification of the number and type of assets required, the key operational characteristics required and the target failure rates and turnaround time for equipment repairs. These targets will be derived directly from the strategy that has been set for the assets in question. The result will be a clear ability to meet the operational risks that will be experienced, and to deliver tangible value to the business.
Asset efficiency
Is about maintaining and developing/ improving the equipment. This is the operation that is typically outsourced to specialist companies. The key activities are around maintaining the equipment within the parameters established under the Asset Effectiveness element, to ensure that it operates to the expected level of performance when required.
Asset information
Is about capturing all asset related information, and storing it in one comprehensive database so that it can be extracted in the correct format to support all levels of decision making, from the strategy to the efficiency levels.
Asset governance
The governance element of this model is concerned with ensuring that the other four elements work together effectively and efficiently. Without effective governance the other elements will not be aligned and roles and responsibilities to deliver will become muddled. This is especially true where one or more of the elements have been outsourced, or are undertaken by a contracted third party.
Effective Asset Management will bring about significant, and sustainable, costs reductions and capacity improvements, both of which impact directly upon the profitability of the business. We know what Asset Management is about at the coal face, as well as the value that it can bring. Our client teams are wholly integrated, with both Consulting and Technology experts represented.
R.E.V.O Group offers all levels of support ranging from the creation and implementation of an Asset Management strategy to undertaking an assessment of your existing operations with a view to identifying a range of improvements designed to meet the needs of a particular business challenge.
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