4 Basic (Often Overlooked) Steps to Operational Excellence

Achieving operational excellence is vital to ensure that your company executes and fulfills its strategic goals.

As a result, companies have spent millions of dollars and countless hours on advanced programs such as lean manufacturing, six sigma, kaizen events, ISO 9001 quality certification, etc.

In doing so, they have often overlooked the basics of process mapping, focusing on the constraint, and keeping it simple, clean, and organized.

In 2010, I worked with a high technology manufacturing company. The company had spent innumerable time and money on becoming lean six sigma, and ISO 9001 certified. I was excited to see the operation to learn what they did so well.

Alas, the facility was a mess. Their processes were convoluted. There was little organization within the facility. The housekeeping was horrific with excess raw material and finished goods inventory scattered and intermingled haphazardly throughout the plant. They had just run weekend shifts to catch up on late orders because one stamping machine could not keep up with demand and had become a bottleneck for all production. In short, they had neglected the basics.

Process Mapping

Having the right processes – the right manufacturing process, sales order process, product development process, or customer service process – is crucial. As the consultant and author Philip Delves Broughton says:

Process is important in every aspect of a business. You need to get the right outcome doing it the right way so that you could achieve the right outcome again and again.

The first step on the road to operational excellence is to map out your key processes. Go through step by step and determine the key elements in the process.

  • What is each key step?
  • Who does each step?
  • How long does each step take?
  • What are the few key metrics to determine the success or failure of the process?

Using the 80 / 20 rule, this process mapping can be done well (good enough for a first pass) within a two-hour meeting (when the right stakeholders are all involved).

Analyze the Process

Now, analyze the process.

First, does the process work?

  • Does the process achieve efficiently what it is designed to achieve?
  • Are the products and services provided with quality?
  • Is the process as simple as possible?
  • Is the process repeatable on a consistent basis?

Consider carefully what Michael Hammer, author of The Agenda: What Every Business Must Do to Dominate the Decade, says:

You don’t have the right processes if it takes exceptional people to do ordinary things or if it takes heroics to perform tasks that should be routine.

Second, analyze the process from the customer’s perspective.

  • Are you really easy to do business with?
  • What do you require of the customer to complete the process?
  • Does the customer have to jump through hoops or wait too long during the process?

Third, evaluate the time that the process takes.

  • Do you get the product or service delivered in a reasonable time that suits the customer’s needs?
  • What is the constraint or bottleneck in the process that prevents more throughput and faster execution?

Focus on the Constraint

The key element is to then focus on the constraint relentlessly in order to improve the process. In the example of the high technology manufacturing company above, the constraint was the stamping machine. Moving forward, the company needed to focus on this bottleneck in order to prevent the extra weekend shifts.

  • How can the production schedule be revised to ensure that the stamping machine is always in use?
  • How can the cycle time of the stamping machine be reduced?
  • Does a second stamping machine need to be purchased?

Often enough, the constraint is management itself as employees wait for management approval or comments that are late in coming.

When I was performing financial analysis in the early 1990’s, the average time to complete and disseminate month-end reports was 28 days. By focusing on the constraint and corralling senior managers for their analysis and approval, I was able to reduce the average time to 4 days. While certainly not “world-class”, it was an easy and significant improvement that allowed our customers (the operating executives) to get information that was much fresher and more relevant.

Keep It Simple, Keep It Clean, Keep It Intuitive

With a good process in place, it is time to simplify, eliminate, organize and clean. In manufacturing operations, this comes in the form of ‘5S’ or extreme housekeeping which has three elements:

  • Scour and eliminate everything but the absolutely necessary items.
  • Be intuitive in how you organize with everything in its most appropriate place (near where it will be used) and a place for everything.
  • Keep everything clean and well-maintained.

To date, I have visited and toured more than 250 factories in countless industries. I have never seen a well-run facility that was not also clean and superbly organized. Until the facility and process looks simple, logical, and straightforward, the process requires further refinement.

The same can be said about all processes (even Neanderthal hunting). Eliminate all the excess steps, reports, approvals, etc. Organize and arrange everything appropriate to achieving the goal of the process. And simplify ruthlessly.

Conclusion

Following these four steps may not be as sexy as bringing in six sigma black belts, conducting kaizen events, or hiring the big name consulting company. Yet, by mapping your process in one afternoon, analyzing it, determining and then focusing on the bottleneck or constraint, and uncompromisingly simplifying and organizing, you will be able to improve your process and operations significantly within just a few weeks.

 

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About David Shedd

David has eleven years of experience as President of an up to $350M group of manufacturing, distribution, retail and services companies, having led 20 different businesses from turnarounds to start-ups to fast growth companies.
This entry was posted in Improve / Turnaround, Perform / Execution and tagged , , , , . Bookmark the permalink.

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