Adopting marginal gains

Posted on 9 May 2016 by The Manufacturer

Enterprise information management service provider, OpenText, reveals the power of marginal gains in improving B2B integration.

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For marginal gains, the accumulation of changes drive the performance improvements required.

At first glance, there seems little in common between your B2B integration environment and some of the world’s leading sports teams.

First impressions can be deceiving. Techniques honed in areas such as athletics, cycling and Formula 1 motor racing have dramatic effects when applied to B2B integration and supply chain performance.

Sir David Brailsford, head of the Team Sky cycling team, has become famous for coining the term ‘Marginal Gains.’ The concept is that an aggregation of small gains adds up to a large gain in overall performance.

He explained the idea to the BBC as, “How small improvements in a number of aspects of what we do can have a huge impact”.

OpenText PQ - May 2016Brailsford’s results were impressive. He took a cycling team on the verge of bankruptcy to become the leading team in the world with an almost clean sweep of gold medals at the 2012 London Olympics.

Painting the floor of the team truck white may seem like an odd way to try to improve on-track performance, but this is just one example of how the GB cycling team used the marginal gains approach.

The white truck floor exposed dust that was being transferred to the bike tires and reducing speed on the track.

It’s easy to assume that there is little of this that can be applied to your B2B integration environment and supply chain operations.

Yet, the concept is to think differently about everything you do, and to make minor changes to technologies, behaviours and processes where there is an improvement in outcomes.

Each change in isolation will have a small overall impact. The accumulation of changes drive the performance improvements required.

How does this translate into the world of supply chain operations?

Let’s take a manufacturing company with £100m in revenue. If it could achieve just a 1% improvement in total operational expenses including cost of goods sold (COGS) and days in inventory, the company would increase its long-term after-tax cash flow by 8.5%.

OpenText White Paper Link - May 2016This white paper studies how an organisation can apply the theory of marginal gains to its B2B integration environment and supply chain operations.

It examines the areas where making small improvements can yield large returns, and will help you understand if your company is ready to adopt this approach and the benefits it can bring.