Operations in times of crisis
Unfortunately, a crisis like the one we have experienced in recent weeks is giving a new boost, in case there was a skeptic in the room, to e-commerce and more specifically to the importance of operations.
It is true that without marketing it’s quite complex to raise incomes, but this “concrete mixer” is more direct to operate since it mainly consumes currency units as instant raw material to increase its production.
The operations have other inertias, other tempos and a different exploitation that make it more difficult to increase productivity and not to mention capacities.
To take care of it only under pressure and extreme difficulties goes with the human beings. But we can, and it is our responsibility as operations managers, manage the medium term as a time horizon of daily work. We have been doing it for the last decade with 25% of annual growths, but we can do more and we have to do more.
Operations cover almost everything that is not marketing: technological infrastructure (IT), procurement, warehouse, replenishment, transportation and customer service. Metrics cannot be changed substantially from one day to another, make up arrangements doesn’t work here to raise a good pic for the monthly balance scorecard, it’s build up every day, every hour, minute by minute.
Operations require professionals or external professional services with the capacity to design and implement solutions, not usually cheap, and whose return on investment is not so immediate and brilliant, only the empowerment from the top management perform excellent operations. We are noticing during these weeks where the sales push is pulling operations to the fracture in all those companies with a time horizon which doesn’t go beyond surviving Blackfriday with unscalable solutions and only sustained with the “muscle” of adding headcount. Nowadays every day of every week are Blackfriday and it is complicated, and not profitable at all, to supply with just hands what it could have been implemented with that sorter project we thought about, or that put to wall that we planned, or that integration for the CRM with the ERP to reach more autonomy to the Call Center or even tackle that live chat project based on Artificial Intelligence (AI).
The response based on smoothing the service curve up to perform deliveries in a week or even more is the lesser evil, certainly of very bad quality from a customer experience perspective but honest despite all the noise that will settle on social networks; those social networks driven by marketing teams or even sometimes directly from top management putting on top of all… a hard comment or opinion.
The good news is that we will emerge from all of this and surely reinforced, it will be time to plan future steps learning from past difficulties and there will be always operations to support what comes after marketing.
Author: Luis Perdiguero
Publication date: 31 March 2020
