Navigating the New Normal: Operations Insights for 2024
Key Drivers of Future Success
- Productivity: Organizations must focus on enhancing productivity to offset rising costs.
- Technology Enablement: Leveraging generative AI and automation in back-office and shared-service functions.
- Sustainability: Incorporating sustainability into operations to reduce carbon footprints.
Global Economic Landscape
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North America:
- Volatility: High inflation (7-10%) makes traditional productivity programs ineffective.
- Sustainability: Supply chain executives are required to address sustainability and carbon footprint reduction.
- Resilience: Building resilience post-pandemic and amid ongoing disruptions.
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Europe:
- Consumer-Facing Industries: Weak due to reduced consumer spending and high interest rates.
- Green Energy Transition: Boom in industries like green energy and battery factories.
- Automation: Increased urgency to adopt automation due to labor shortages and job openings.
Critical Trade-offs and Big Bets
- Productivity: Essential for all companies to manage cost pressures.
- Supply Chain Resilience: Critical but uncertain investment levels as the threat of future disruptions remains.
- Sustainability: Significant investments required to reduce emissions and improve environmental impact.
Emerging Trends
- Capital Intensity: Rising due to infrastructure and digital innovation needs.
- Automation: From a perceived threat to a potential solution for labor shortages.
- Lean Methodologies: Enhanced with technology for holistic operational excellence.
Conclusion
- Commitment from Top Management: Necessary for successful operational transformation.
- Focus Areas: Productivity, technology, and sustainability are crucial for future success.