As frequent readers of our blog will know, we’ve focused a lot in the past weeks on the concept of exposing Operations’ hidden inefficiencies. These are opportunities for sustainable cost reduction that often lay under the radar for most executives and can remain undetected while generating significant sources of waste for the firm.

Waste or inefficiency can come into Operations from any multitude of sources – from outdated processes, inefficient technology or systems, ineffective  relationships with business partners, need for rework, and the list goes on. But some particularly insightful conversations we’ve had with members recently have led me to consider:  When do inefficient outcomes occur as a result of Operations management, or more specifically, the goals and targets which management sets to drive Operations’ performance?

A recent survey of our members on this topic revealed some surprising results. Over 75 percent of executives believe their Operations unit generates unnecessary costs by managing against inefficient targets. What’s more, almost 6 in 10 say their firm is ineffective at measuring the costs which result from sub-optimal performance targets.