The digital disruption in manufacturing creates a dynamic landscape where Operational Excellence (OE) strives for stability, quality and efficiency while continuing to service an increasingly demanding customer. With a unique, cross-industry perspective, Kepner-Tregoe consulting and training is at home in factories, shipyards, mines and also within global IT, media and\u00a0telecommunications support operations. Some OE foundations for an increasingly digital operation are outlined below. They draw on our work in diverse, frontline operations worldwide.<\/p>\n
Operational Excellence is a broad term for improvement programs\u2014Lean, Six Sigma and myriad other initiatives\u2014that are designed to fix problems, eliminate waste and create consistent and standardized processes. Strong Operations Excellence cultures also embrace innovation and directly engage and connect employees and customers.<\/p>\n
Over time, OE will have a new name, the nature of work will change and operations will look very different; but there are critical steps every organization must take to support the OE journey to the digital future.<\/p>\n
Automation and advanced monitoring can bring new levels of stability to operations, eliminating the need for workers to run machines, make adjustments and resolve small issues. The past decades have seen this trend drive job losses. The news is not all bad however; workers who remain are now safer with less manual labor and repetitive tasks. They also have more time to study and learn on-the-job as they study the numerous sources of data now available to them. Increasingly operator capability development is a major area of investment. The complication is that within this more digital environment, when problems do occur they are bigger, more complex and may never have been experienced before. Add to this a global supply chain that is difficult to control and demanding customers who just want it now.<\/p>\n
In a world of big data and the tools to measure anything, a problem-solving approach that can quickly eliminate irrelevant data creates a solid groundwork for advanced problem solving and root cause analysis.<\/em><\/span><\/p><\/blockquote>\n
As the digital workspace evolves and becomes increasingly awash in data, problem solving and root cause analysis (RCA) capabilities that use data more efficiently provide lasting value.<\/p>\n
Support new skills with coaches and workflows that provide prompts<\/h4>\n
Successful OE programs develop\u00a0problem solving and root cause analysis skills that optimize the use of data to resolve problems efficiently and accurately. Organizations that develop problem solving and other critical thinking skills on the shop floor can eliminate wasted time and effort. Supporting workers with coaches and \u201cninjas\u201d with advanced problem-solving skills is key to tackling complex issues never\u00a0experienced before and helps to embed capabilities into sustainable, day-to-day operations. These people with advanced skills are often the Op Ex or Cont\u00a0inuous Improvement leaders who are charged to roam the sites looking for improvements and working with operators to ensure that once root causes are found, solutions are practical and sustainable. In a future zero-defect world, these will be the skills to develop\u00a0and maintain, even if only through simulations and practice. Operator control rooms now\u00a0look like an aircraft simulator where operators spend much of their time attending to alarms and practicing for when something goes wrong.\u00a0When something does go wrong, analytic thinking skills will be in high demand.<\/p>\n
The complexity of modern manufacturing operations involves a lot of pieces interacting\u00a0\u2013 a change in one place could impact the system as a whole. Here root cause analysis suggests where changes can be\u00a0applied to achieve the results and impacts you desire. Understanding root cause may require untangling complex systems and their dependencies \u2013 often including the participation of multiple parties that must be coordinated. The impacts of both the original issue and any corrective activities can be widespread. The risk of ignoring or getting the root cause wrong and not understanding the consequences of resolution can be more hazardous than the original presenting issue.<\/p>\n
Avoid project overload and sustain improvements<\/h4>\n
OE relies on a workforce that is committed to pursuing continuous improvement. Lean and Six Sigma are givens for most manufacturing organizations today and manufacturing staff have at least a broad understanding of their concepts and terms. Key to achieving results from continuous improvement efforts is embedding changes into the daily disciplines of employees.<\/p>\n
When organizations add a critical-thinking based approach for problem solving and root cause analysis to their Lean and Six Sigma toolbox, the biggest regret cited\u2014in our experience \u2013 is not having done so earlier.<\/em><\/p><\/blockquote>\n
The contradiction is that manufacturing cultures thrive on routine and consistency, and this builds a \u201cthat\u2019s the way we\u2019ve always done things\u201d mindset that is suspicious of change. Sometimes an external prompt is helpful to focus attention on the future. Front-line staff needs to be involved with improving outcomes\u00a0every day.<\/em><\/p>\n
The most powerful elements in the creation of an OE philosophy and culture are the focus and determination of a leadership team to execute the right things effectively. Leadership must communicate operational excellence aspirations and support a cultural change \u2013 with knowledge, process and behaviors all interplaying together in the context of the operating environment \u2013 by engaging the employees and creating a \u201cHigh Performance Culture.\u201d This culture is one where employees know what they are doing, why they are doing it, and are supported by goals and measures that drive improvement.<\/p>\n
Of course, this is not a new concept: the much celebrated Lean cultures focus on empowering operators on a shop floor to \u201cstop the line\u201d when alarms light and ensure that issues are addressed immediately before impacting others. In the modern digital operation, machine learning and automated control of variables may well take immediate front-line control from operators. An excellent way to get operators back and engaged in the immediate control and improvement of their plant is to position them as short-term leaders of the Continuous Improvement projects being lead by Op Ex engineers. Operators can often become overwhelmed by the numerous machine-generated alarms they now must monitor. Through directly involving them in a focused improvement project which leverages this automation to troubleshoot and improve an issue, operators will gain greater confidence in how to interpret and respond to automatically generated prompts. The more advanced teams are able to program controls to automatically scan the horizon and the data for the clues that will signal the need to sound an alarm before the potential issue occurs.<\/p>\n
Focus improvements relative to key metrics<\/h4>\n
One constant in OE is the theme of performance measurement. Digitization of operations and the encroaching IoT will continue to change the way work is done and success is measured. Measures\u00a0enable an organization to keep score and monitor the effectiveness of strategies and plans.\u00a0A precise and collaborative approach to addressing the most pressing needs, while maximizing existing assets, can take full advantage of\u00a0an organization\u2019s desire to optimize those metrics that enhance their competitive advantage.<\/p>\n
This approach selects the Six Sigma, Lean or other programs that produce improvements that can be sustained. With leadership involvement in identifying goals and helping to facilitate and embed change, project success builds employee and customer commitment. When significant improvements are realized and sustained, a more dynamic culture evolves and additional improvements are viewed as realistic and within reach.<\/p>\n
Accept that each OE journey is unique<\/h4>\n
Operational Excellence programs tend to be non-linear and fail to follow a maturity model, as tempting as it might be. Each organization needs to focus on building a program that supports their competitive advantage within the opportunities and constraints of a range of factors.<\/p>\n
In evaluating or re-evaluating your OE efforts, it is important to reflect on your organization\u2019s unique characteristics, opportunities and risks to help guide these efforts.<\/p>\n
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- What is your industry, where is it moving, who are your competitors?<\/li>\n
- How much technical capability is in place and where does your historical knowledge lie?<\/li>\n
- Where have previous investments been made in OE programs?<\/li>\n
- What is your relationship to customers?<\/li>\n
- What is holding you back and what is your competitive advantage?<\/li>\n
- What do you want your operators to be doing in ten years?<\/li>\n
- What failures could you avoid if you had predictive powers?<\/li>\n<\/ol>\n
As IoT presents new opportunities, even companies coming to OE late in the game will benefit. Just like many African and Asian nations that jumped the expensive and resource intensive \u201cpoles and wires\u201d stage of telecom, now factories can skip expensive ERP data capture and move into wireless monitoring interfaces.<\/p>\n
Today\u2019s digital advances only underscore an ongoing asset in the OE journey: humans with critical thinking skills. The value of advanced capabilities in solving problems and making decisions using logic and data remains constant, defying the disruptions of changing products, platforms, customers and technologies.<\/p>\n
About Kepner-Tregoe<\/h4>\n
Founded\u00a0 in\u00a0 1958,\u00a0 and\u00a0 based\u00a0 on\u00a0 ground-breaking\u00a0 research\u00a0 regarding\u00a0 how\u00a0 people\u00a0 think,\u00a0 solve\u00a0 problems,\u00a0 and\u00a0 make\u00a0 decisions,\u00a0 Kepner-Tregoe\u00a0 provides\u00a0 a\u00a0 unique\u00a0 combination of\u00a0 training\u00a0 and\u00a0 consulting\u00a0 services\u00a0 to\u00a0 improve\u00a0 quality and\u00a0 effectiveness\u00a0 while\u00a0 reducing\u00a0 overall\u00a0 costs.\u00a0 The\u00a0 KT methodology\u00a0 is\u00a0 used\u00a0 at\u00a0 every\u00a0 level\u00a0 of\u00a0 client\u00a0 organizations:\u00a0 to\u00a0 implement\u00a0 strategy,\u00a0 achieve\u00a0 continuous\u00a0 improvement,\u00a0 increase\u00a0 customer\u00a0 satisfaction,\u00a0 and\u00a0 drive\u00a0 effective\u00a0 issue resolution throughout the organization.<\/p>\n
Additional reading:<\/h4>\n
How to Implement Lean Manufacturing by Lonnie Wilson, \u201cCultural Change Leading Indication #3: Problem Solving,\u201d pp 93-107, McGraw-Hill Education; 2 edition (March 17, 2015).<\/p>\n
36 Operational Excellence Stats Every Manufacturing Leader Must See<\/a>, LNS Research, Jan 2014.<\/p>\n
The 10 skills you need to thrive in the Fourth Industrial Revolution;<\/a>\u00a0The Future of Jobs Report, World Economic Forum, Davos, Jan 2016.<\/p>\n