Value Driven Operations: What is it?
Value Driven Operations (VDO) is an initiative to optimize investments and maximize the use of assets while reducing non-quality costs. This methodology successfully applies to several types of industries such as manufactured goods or service companies in which investments and their exploitations are at the heart of the operational model.
VDO is an effective approach to meet the following challenges:
- Provide increased return on investments
- Drastically reduce your Capital & Operational Expenditures
- Optimize lead times & Accelerate Time-to-Market
Kusting has developed a unique methodology, customizable by type of project and industries, to get the most out of the VDO approach. This multi-business approach is based on the 3 following rules:
1. Link capital allocation to maximum value generation
In all industries, optimizing investment costs is a priority to achieve a faster ROI, an advantage over the competition and better financial results. However, too often the same patterns are reproduced, and organizations struggle to link investments to the value they generate. In the end, this results in a significant loss of profitability in the end.
The VDO enables, through systematic and in-depth analysis, to accurately assess the value generated in order to increase the performance of the invested capital. This better control of expenditure, in a volatile economic context, is a real competitiveness booster.
To achieve this, VDO methodology is based on the following 4 levers: the right necessary specificities, innovation in design, co-engineering with partners and risk control. It is also effectively completed with Design to Value and Project Value Improvement tools.
Kusting has developed a specific methodology that applies to many types of investment projects to enable them to generate maximum value.
2. Get the most out of your assets exploitation
Controlling operating costs and maximizing usage are the two main challenges of asset management. These are major concerns for operations managers, the objective being to make investments as profitable as possible by mobilizing equipment to the maximum while ensuring maintenance.
The VDO approach is a breakthrough compared to traditional asset optimization methods as it offers stronger and more sustainable improvement potential for organizations. It improves the quality of service and reduces operating costs but also investment costs.
To do this, it is based on several recognized levers: improving purchasing, accelerating production / maintenance or securing drifts. This is achieved by addressing in particular Total Cost of Ownership (TCO), logistics flows, inventory management, asset performance issues, etc.
Based on this strong analytical approach and specific tools, our interventions aim to provide a maximum asset optimization plan.
3. Secure any drift in your operations
An inefficient monitoring system with the absence of well-controlled indicators or a profusion of indicators that are not even supported by the teams are often the cause of drifts in operations which are heavily impacting the quality of service but also the Total Cost of Ownership (TCO).
After the optimization of CAPEX and OPEX, the Value Driven Operations approach focuses on the implementation of efficient management tools to secure these risks of drift. It reduces downtime, optimizes intervention costs following incidents and strengthens support processes.
The VDO is based on 3 steps to improve performance. First, on the construction of a dashboard with relevant indicators at the right level. Then, on the implementation of a management mode based on these performance indicators, which are shared and understood by all the teams. Finally, on the development and monitoring of a securisation plan inspired by the FMECA methodology.
Kusting offers a relevant approach based on these fundamentals to secure the risks of your operations.