Global operations networks are challenged by three global trends: the maturing of emerging markets which changes consumers’ attitudes in these countries, the current and ongoing global and regional macroeconomic instability and the inherent inability of many companies to overcome these challenges with their current operations footprint. Arthur D. Little’s latest report ‘Performance Excellence Networks’ outlines how by implementing key principles, companies can make a major step forward to tap the full potential of their global network and become significantly more flexible in reacting on changing market situations rapidly.
Three widely spread defects within companies are true around the globe:

1. In most companies, the global operations networks are complex and not focused due to the fact that their current organization is the result of historical developments.
2. They are missing transparent and consistent governance structures, competencies, processes and an open collaboration culture which leads to inefficiency.
3. Operations networks are not optimally networked internally and externally, hindering a continuous best practice exchange and flexible adaptations of the global network.

But how can companies solve the operations footprint puzzle to transform towards an open, focused and networked global setup while consistently improving local performances in practice? Arthur D. Little and St. Gallen University have developed a ‘networked operations approach’ - a set of measures to help companies with the transformation towards focused, open and networked global operations.
Open operations: This comprises leadership alignment between the different sites and corporate functions plus the enabling and mobilizing of staff.
Focused: They have a clear focus that supports the corporate strategy and alignment of businesses. Across all regions and functions core competencies are concentrated on more extensively.
Networked: The new organization is not only networked and aligned within but also with a range of external partners to create collective intelligence.
The ‘networked operations approach’ was developed in cooperation with companies who were willing to let the scientific team share their insights and have a closer look at their production networks. In this approach efficient tools were developed, for example the Operations Maturity Assessment which helps companies assess their own operations network and the Value Chain DNA Design.
Bernd Schreiber, Global Practice Leader OM Practice Arthur D. Little says: “To leverage the existing potential, companies need to clearly define the role individual sites and their interactions with internal and external partners have. Depending on the industry, if set up correctly networked operations offer further savings potential of up to 45%.”
The full report can be downloaded at
www.adl.com/Performance_Excellence_Networks