COOs are often the unsung heroes of the businesses they work for. CEOs generally take the spotlight which is to be expected given the public-facing nature of the role. However, the COO’s daily responsibilities are what make the day-to-day operations of the company run smoothly. Especially within the manufacturing sector, little happens without the seal of the COO and his or her direction on a given project. Once upon a time, this role nearly disappeared. However, with operations and supply chains rising to the board-level in the post COVID environment, the COO is making a resurgence.
The Fall of the COO
In the early 2000s, companies faced pressure to create flatter organizational structures. As a result many companies eliminated the COO role and distributed those responsibilities among other C-suite executives with most of the responsibilities landing on the CEO. By 2018, only 32% of F500 businesses had a COO.
In 2022, just as the COVID pandemic was beginning to abate, the number of F500 companies with a COO has risen to approximately 40%. In addition to returning to a place of prominence, COO roles are also returning with a new set of responsibilities, largely inspired by COVID.
Even before the beginning of the pandemic, there was enough social, economic, and geopolitical upheaval that made forecasting supply chains difficult. Of course, COVID and the Russian invasion of Ukraine has made such a poignant illustration of this upheaval that it almost feels a little too “on-the-nose.”
Given this unpredictability, newly minted COOs must be able to prepare for the unknown and create resilient systems. Prior to 2020, many companies favored lean approaches to manufacturing. This is an excellent strategy when supply chains and floor operations are running smoothly. However, COOs must re-evaluate the risks of lean operations and are increasingly opting for creating buffers in inventory, labor force, and raw materials. COOs must also stay abreast of the most recent manufacturing trends and technological developments. Disruptions are not always negative and often come in the form of new technologies. While COOs can’t read every new article or to attend every trade show, having a system in place to identify promising technologies is crucial for long-term success and growth.
Cooperation and Collaboration with Sales and Marketing
Employees, even high level employees, often seem to forget that companies rise and fall on selling enough products to continue operations. Unfortunately, the silos surrounding operations and product development, and sales and marketing are seemingly impenetrable. Both sales and operations should have free flowing channels of communication, both for selling features as well as developing new products that the market demands. The sales team must understand what they’re selling and why it is the best solution on the market. Additionally, those manufacturing and engineering new parts must also be exposed to the feedback given by their prospects.
COOs can work together with CMOs to help inform the marketing strategy surrounding different products. The COO should have an idea of the technical specifications of different products and why buyers may find them valuable. COO should make a concerted effort to breach the silos separating these business activities. Together, the CMO and COO can help develop customer journeys and set KPIs to help increase revenue.
Build Resilience and Implement Technology
In a post-pandemic world, COOs must focus on fostering a dedication to resilience and excellence. Supply chain disruptions, regional upheaval and environmental commitments all pose potential risks for manufacturers. COOs must understand these problems and plan accordingly.
First, COOs should make a concerted effort to understand where in the world lower-tier materials are coming from. Increasingly, these materials are coming from regions of the world that are experiencing geopolitical upheaval. Understanding the origin of different materials and diversifying the supplier base can help COOs and organizations to anticipate shortages and protect against supply cascades.
In addition to recognizing potential points of failure, COOs must make sure that their plants and production are running as seamlessly and efficiently as possible. Sometimes floor-level analyses fail to reach the COO’s desk, which is where specialized consultants can fill in. Specialized consultants have expertise in identifying real solutions in a short period of time, and building long-term resilience within manufacturers.
Many businesses are turning towards new technologies to build resilience, identify future problems, and plan accordingly. The most significant of these technologies is artificial intelligence. It’s worth noting that AI is not (yet) the panacea for all supply chain woes. However, adding machine learning to supply chain management can give COOs insight into potential future production interruptions. This AI knowledge, combined with the wisdom of a seasoned COO can be quite powerful for manufacturers.
The talent available to different manufacturers has undergone two different changes. The first change happened when China was opened to free trade and the second happened during the COVID pandemic. In both cases, the quantity and quality of talent available to manufacturers suffered substantially. Much of the talent and manufacturing know-how was exported to China along with supply chains. Now that many companies are attempting to diversify their manufacturing plant base, companies are facing the difficulties of repatriating lost manufacturing knowledge and skills. Additionally, in the immediate wake of the COVID pandemic, salary expectations dramatically increased while labor availability and commitment have decreased.
While formerly the domain of a CHRO, COOs are having to evaluate new methods of talent retention and manufacturing knowledge repatriation. COOs must work in conjunction with CHROs and other high-level roles to create incentives to retain high-value labor. Additionally, COOs are faced with the challenge of teasing out forgotten manufacturing methods from an opaque government that’s loath to relinquish trade practices. COOs must become experts at motivating their workforce–a task which will require cooperation with CHROs, CFOs, and CEOs.
COOs and the companies under their charge will have to become flexible and agile to achieve the resilience demanded by the current global environment. Manufacturing as well as many other industries are experiencing a business climate that hasn’t been felt for several decades. However, with the right combination of grit, leadership, and wisdom, COOs are in for a new rise to prominence over the next several years.
Seraph, for its part, can help manufacturing firms navigate the new territory that many manufacturers find themselves in. Thanks to our team of specialized operational consultants, Seraph can come alongside a new company and act as a support structure and begin adding value from day one. Our advisors are former management at many suppliers and OEMs and are experts in production and supply chain efficiency. Contact us today to schedule a discovery call, or see our case studies for more information.