OpEx
A TBM Consulting Group Publication
Review
March 2012 | Issue 1
Companies With Advanced CI Programs Grow Faster Achieving a principle-driven operational excellence program accelerates revenues, profits and cash.
“ Today’s global enterprises need to not only grow, but grow intelligently.” — Anand Sharma, Co-founder and CEO, TBM Consulting Group, Inc.
Executives striving for faster growth should take another look at their continuous improvement (CI) efforts. A recent survey of manufacturing leaders who are readers of IndustryWeek magazine revealed that companies in the most advanced stage of CI have the biggest boosts in year-onyear revenue, net income and cash flow. TBM Consulting Group partnered with IndustryWeek to ascertain how leaders are incorporating CI into their growth strategies. Although about 95 percent of surveyed companies use CI, many aren’t using CI programs to drive high-level growth strategies. They remain in the “tool-driven” or “system-driven” stages of the CI maturity progression.
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As depicted in Figure 1 on the following page, advancing CI programs to the principle-driven stage can significantly accelerate revenue and income growth, and ensure steady cash flow for operations and investment. Companies with fledgling or lagging CI programs aren’t yet capitalizing on opportunities for “intelligent growth,” according to TBM Co-founder and CEO Anand
Sharma. Such growth stems from transformative changes to existing processes that are driven by intimate knowledge of customer challenges and ongoing executive support of CI principles throughout the enterprise. For years, Sharma has been challenging executives to expand their thinking about CI beyond traditional cost control, which—although still
(continued)
ALSO IN THIS ISSUE: 4| Leadership: Rapid value creation at Schiff Nutrition 6| Case Study: Trail King cuts 40 weeks out of
new product development process
8| Technology: Automating the policy deployment
process
From the Publisher
CI Survey Results, continued Figure 1 – CI Companies Perform Better Midcourse or Mature
March 2012 | Issue 1
Welcome to our new newsletter featuring the latest insights from TBM Consulting Group.
61% expect operating income growth 5.1% or higher
Inspired by your voice-of-the-customer feedback, our new journal, OpEx Review, will focus on success stories and leadership experiences that you can leverage for competitive advantage and sustainable value creation.
As the stories in this issue illustrate, such growth requires coordination among different functions, geographic regions and business units. In the Trail King case study, for example, the company removed departmental barriers to reduce time-to-market from one-and-a-half years to nine months. Intelligent growth also requires tight alignment between business objectives and CI activities, which can be aided by the latest technology, as Tom Morin explains in his article about policy deployment. As more and more companies are discovering—and as we explored in our joint research project with IndustryWeek magazine that’s summarized in this issue—maintaining momentum comes down to culture. Paraphrasing the executive interview with Jon Fieldman, Senior VP for Operations of Schiff Nutrition, you need to nurture a culture that not only accepts and respects value-added change, but demands it.
50%+ expect revenue growth 3% or less 49% expect operating income
The pursuit of operational excellence has matured over the past decade. There will always be opportunities for applying the right tools to make dramatic process improvements in each department and on the plant floor. Today, many of the firms we work with are asking us to help ensure that their CI efforts are clearly aligned with their top priority: profitable and intelligent growth.
50%+ expect revenue growth 5.1% or higher
the same or down
No Program
The TBM/IndustryWeek survey results clearly show that companies with no CI program expect little or no revenue growth, flat or declining operating income, and flat or negative changes in cash flow.
important—is not enough to yield the kind of growth that manufacturers need to become market leaders. He cites modern growth challenges such as flat population and stagnant GDP growth in the developed world, rising competition in developing countries, ongoing raw materials shortages, and increasing demand from customers for more customized products and services without commensurate price increases. “Today’s global enterprises need to not only grow, but grow intelligently,” Sharma says. “When they integrate their CI efforts into their growth strategy, they achieve better and longer-lasting Figure 2 – CI Progression
Every day we are inspired by the people with whom we work. Many of the best ideas emerge from the confluence of intelligent ideas and practical needs for immediate solutions. We look forward to sharing our knowledge with you here and online at tbmcg.com. Please let us know what you think of the newsletter, and feel free to make requests for any topics that you would like us to address, opex@tbmcg.com. Keep up the good work,
Anand Sharma Co-founder and CEO, TBM Consulting Group, Inc. asharma@tbmcg.com 2 | OpEx Review | March 2012 | www.tbmcg.com
Where is your company on TBM Consulting Group’s CI Progression matrix? If your company has been practicing CI for a number of years and has not achieved the corresponding growth depicted, this could be because of a gap between your CI priorities and your strategic priorities.
CI Survey Results, continued
growth—especially if CI programs are nurtured into the most advanced stage.” According to the research findings, companies with midcourse or mature CI programs are much more successful at increasing revenues, operating income and cash flow; and, the ability to grow increases as a company’s CI program matures (see Figures 2 and 3). Additionally, the survey found that to get more from their CI programs, leaders should improve communications, speed up problem solving, and have a clearer understanding of customer demand. However, the biggest change that would dramatically boost the value that manufacturers receive from their CI programs is a fundamental shift in how leaders perceive such programs. Leaders consider CI to be most beneficial in addressing uncertainty in the market, input costs and pricing pressure—and not their organization’s strategic priorities, as shown in Figure 4.
“This is the most important disconnect that the research identified,” said Ken Koenemann, Vice President of Business Development and Marketing for TBM. “It’s imperative to their future competitiveness that manufacturing companies begin tapping established CI knowledge and other resources to achieve strategic priorities. We’ve seen leadership in the private-equity sector embrace this with great success.” (See Schiff Nutrition article on page 4.)
How would you describe your company’s operational excellence/continuous improvement programs? Mature: Continuous improvement is the basis of our company-wide culture and strategy.
26%
Moderate: We are in the process of or have implemented strategy deployment and/or are working extensively with suppliers.
26%
Midcourse: We are starting to apply operational excellence principles/programs to non-production functions such as sales, marketing, IT, finance, etc.
22%
Early: We have started using tools such as kaizen, one-piece flow, standard work, etc.
23%
Other/No reply.
2%
More than 80 percent of respondents have established CI programs that are beyond the early stage.
Figure 4 – Executive Priorities Which of these will be priorities for executives at your company during the next 12 months? First choice
Second choice
Revenue growth
25%
Improving cash flow
17%
Containing direct costs
8%
9%
New-product innovation
8%
8%
Improving productivity
7%
13%
Third choice 10%
9%
6%
13%
9%
6% 5%
12%
11%
10%
Fourth choice
Fifth choice
8%
7% 4% 10% 15%
15%
8%
While executives and their teams identified revenue growth, improving cash flow and containing direct costs as their top three priorities respectively, they did not make a connection between these goals and perceived benefits of CI. They identified the top three challenges that CI helps them to address as economic uncertainty, raw materials/ components pricing volatility, and finished-goods pricing pressure.
EXECUTIVE BRIEFING
Breakthrough Objectives and Continuous Improvement: Closing The Gap A report for manufacturing leaders on achieving intelligent growth. SPONSORED BY:
Figure 3 – CI Maturity Level
For More Information Breakthrough Objectives and Continuous Improvement: Closing The Gap, the 12-page report based on the TBM/IndustryWeek executive survey is available for download at www.tbmcg.com/closing-the-gap-report.
A one-hour webinar based on the survey is archived at www.tbmcg.com/closing-the-gap-webinar. The findings and report will be discussed in depth at an executive roundtable April 24th at the 2012 IW Best Plants Conference in Indianapolis, www.iwbestplants.com.
OpEx Review | March 2012 | www.tbmcg.com | 3
Leadership Insights — Q&A
Schiff Nutrition: Revving Up for Rapid Value Creation A supplements manufacturer trades in its traditional operation for a quickly changing, continuously improving culture under the enthusiastic leadership of Jon Fieldman, Senior VP for Operations.
Your company has an unusual ownership structure. Can you explain? Schiff Nutrition International is a public company traded on the NYSE under ticker WNI. Weider Health & Fitness owns a controlling position in the company, followed by TPG Growth, which acquired its stake in the company from the Weider family in October of 2010. Our new CEO, Tarang Amin, joined Schiff in February of 2011. I was the first new external member of his leadership team, hired in May 2011. What is your past experience? I have 20 years of experience with leading consumer packaged goods companies, starting my career with General Mills and then moving to Clorox, working in various manufacturing and supply-chain roles. Can you describe your production facilities? We are headquartered in Salt Lake City. The same site houses our capsule, tablet and bar manufacturing plants as well as packaging operations and a distribution center. There are about 300 people in the factory/distribution center. We also use contractmanufacturing sites elsewhere in the United States. What is your top priority right now? From a metrics point of view, we want to improve inventory valuation; cash management from the perspective of what we spend to get our product
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out the door; and overall equipment effectiveness. What this really is about, though, is transforming the performance of our people across the board and creating new possibilities. Our manufacturing facility was built about 16 years ago and during that time paradigms about what could be accomplished spread and solidified. Our job is to shatter that historical baseline and incent our employees to perform at a significantly higher level. How would you describe the state of the company when you were hired? The company was comfortable, competing favorably in a profitable category with high quality products. There was no incentive from the market or the economy to radically change. However, to me, there was a great opportunity to do something extraordinary with human capital and move beyond being satisfied with the ordinary. So your role is really about driving change, right? Absolutely. In my mind the job of leadership is to help make tomorrow better than today, and that means creating different pathways to help yourself and your team do things better. Ultimately I’m about driving an environment and culture that not only accept and respect value-added change but that almost demand it. And then with those possibilities, we have opportunities to drive differential results.
Leadership Insights — Q&A, continued
By differential, do you mean transformative change as opposed to incremental improvements? Yes. To me, the ultimate measure of success is for the everyday employee to look back and say, “Wow, look what we have done.” How do you do that? It’s really about tapping into what motivates people. No one wakes up and says “Boy, I’m going to go to work today and do a bad job.” So first and foremost, you need to provide the right level of leadership. It’s popular to say that you are empowering employees, but at the end of the day it’s about how do you excite people about their future so that they will give you their differential effort to create the transformation. The first part of change is focusing on your undiscovered talent. In the past, I have worked with people that appear to be unmotivated, and then you hear that they are leaders in their community, inspirational people who check their enthusiasm at the door when they come to work. When you can understand why they do that, you can tap into their hidden energy and get everyone going in the right direction. The second part of change is you need a methodology to get results. We’ve chosen the enterprise-wide application of lean.
“ Lean is the preferred methodology of a key investor, so it’s incredibly freeing to have that perspective and support.”
Where did you start? Our focus has been to create a rapidkaizen environment. We began in October 2011 and have done about 18 kaizen breakthrough events since. We started in the
manufacturing facility. Now we have moved into planning and sourcing, basically the supply chain. We expect our next areas of focus will be sales and operations planning, as well as other office processes. We started embracing our problems as opportunities so that we could rapidly solve them. First, in the plant, we started creating flow and making it visual. Next, on the main supplement side, we merged our siloed operations into virtual manufacturing cells to better optimize the whole. What has been the biggest hurdle you’ve had to clear? Everyone had been afraid of making mistakes. If you are going to change, embrace your mistakes and go after them. That’s been the cultural change.
Have you seen improvement? The improvements have been awesome. For example, during our gemba walk yesterday, we witnessed problem solving real-time. Because of the new visual cues in the plant, the team quickly identified the root cause of a flow stoppage, studied the problem, and identified standard equipment maintenance practices to resolve the issue and establish procedures to reduce or altogether avoid future occurrences. What do you do differently to achieve results rapidly? First, you have to raise your tolerance for missteps. Obviously you are not going to risk safety, compliance, quality standards, or the health of the company. However, you need to be willing to try something new without knowing if it will produce the desired results. Secondly, you have to be willing to significantly upgrade your talent. You need to fill your organization with people who like and can work in a rapid pace. Finally, you need to completely decentralize decision-making—my team should be telling me what to do, not the other way around.
“ I’m about driving an environment and culture that not only accepts and respects value-added change, but that almost demand it.” So then, what do you do all day? My role is really to be a vocal supporter and to be a servant leader. My team makes fun of me all the time because my favorite question is, “How can I help you be successful?” My second favorite question is, “What has to be true to make this happen?” And then, to continue the demand for excellence—to celebrate what we have done, but to always hunger to climb the next mountain. Do you find your team needs to “go see” the plant floor more often than in a traditional lean organization because you are in a rapid-improvement environment? My team’s work is gemba-all-the-time. The metrics are updated in real time. I don’t think about that as part of a rapid-change environment, but it works. You have to release decision making and use that gemba time to understand instead of inspect. My team needs to understand why in order to help their teams understand how there might be a better way. What’s different about the leadership in regards to this lean implementation versus others you’ve been involved in? Lean is the preferred methodology of a key investor, so it’s incredibly freeing to have that perspective and support. And many lean transformations happen out of desperation. We have a long record of profitability and stability. This is really a case of continuous improvement driving more enterprise value. Tonya Vinas, former managing editor of IndustryWeek magazine
OpEx Review | March 2012 | www.tbmcg.com | 5
Case Study
Trail King Streamlines Product Development A leading trailer manufacturer cuts 40 weeks out of its new product development process and accelerates customization of existing products.
Client Trail King Industries Inc. manufactures customized trailers to transport heavy equipment and other oversized items.
Challenge Augment sales and improve cash flow by eliminating bottlenecks in new product development process, allowing new designs and customized products to reach customers more quickly.
Solution Design for LeanSigma® (DLS) methods introduced early collaborative planning to prevent downstream disruptions in the process and implemented tollgates in the form of management reviews to make course corrections based on changing circumstances.
Results or one core product, a customized F over-the-road open trailer, Trail King reduced the design phase of the customization process by 12 weeks, cut production costs, and increased quality and customization options. Before applying LeanSigma®, product development from concept to rollout took 1½ to 2 years; after LeanSigma, the process took 9 months.
Design for LeanSigma to the Rescue Facing a sales decline of nearly 80 percent in 2009, South Dakota-based Trail King chose Design for LeanSigma (DLS) as a comeback strategy. Company leaders recognized that speeding up new and customized product rollouts (each trailer is uniquely customized) would improve cash flow and reduce costs. Achieving this would be key to recovering from the significant drop in sales due to the economic downturn. The company’s new promising product, a Modular Hydraulic Transport System (MHTS), has a 375,000-pound load capacity and is the first off-road transport system of its kind engineered and manufactured exclusively in the U.S. Customers told Trail King they would choose a U.S.-made model over an import. Getting this product to market more quickly became a priority.
A Different Approach: Studying Competition, Involving Suppliers Early In addition to the initiatives outlined above, two other activities were launched: a hands-on experience of how to surpass the competition and a concepting session that revealed the advantages of bringing supplier intelligence into the design process. The team rented a competitor’s version of the trailer and built a mocked-up version of their own in Styrofoam®. “This gave everyone an opportunity to see what the finished project might look like, and by mocking it up, we were able to see things that we wouldn’t have been able to see if we had followed our old style of just drawing it up and sending it out to the shop floor,” said Steve Jorgenson, New Product Development Leader and Project Manager at Trail King Industries.
As is the case with many companies, Trail King’s product-development process was a series of hand-offs from one discrete function A second concept event focused solely on to another. The method lacked standards and the hydraulic system of the trailer because crucial process controls, such as establishing it was exceptionally complex, and this a business case for a new design and holding regular leadership reviews (tollgates) “ Because they didn’t have a process, minor to monitor ongoing changes were taking as long as major ones.” viability. When Trail King’s parent company
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offered it the chance to implement DLS, company leaders saw a ripe improvement opportunity.
— Ashwin Badve, Senior Management Consultant, TBM Consulting Group, Inc.
Case Study, continued
“ It’s truly amazing what we were able to accomplish and what Design for LeanSigma (DLS) will do for our company if we continue to apply it.” — Steve Jorgenson, New Product Development Leader and Project Manager, Trail King Industries
brought another first for Trail King: extensive supplier involvement early in the product-design process. A hydraulics specialist from one of the company’s suppliers joined the week-long session and provided key insight into how to incorporate the hydraulic system into the design.
aren’t going through the full DLS process.”
In December, TBM’s Ashwin Badve introduced another tool to the team — Design for Manufacturability (DFMA). The four-day event included industrial engineers, welders and quality-control specialists. With DFMA, the team could identify parts that would have to be supplied, so they could line up suppliers in advance of production.
Rapid Response Redirects Value Creation
“Engineering didn’t always know the capabilities of the shop floor before, but now this is a crucial part of the process,” Jorgenson said. “We do DFMA even for projects that
In March 2010, Trail King’s first Modular Hydraulic Transport System (MHTS) rolled off the line, just in time to take photos and prepare literature for a major trade show in April.
viability of continuing with the MHTS marketing plan, Trail King leaders decided to focus on another DLS project (redesign of existing models) while waiting for conditions to improve. “We took another product line through this process in great detail,” Jorgenson said. “We are now offering a better standard trailer, more options for the customer, decreased costs, and we’re going to have a reduced [order-to-delivery] lead time from 40 weeks to 12 weeks.”
Although the MHTS was very well received, continued economic distress, currencyvalue fluctuations and Collaborative planning and other elements of DLS: a prolonged detraction in available financing > Eliminated holdups to getting products to customers followed the MHTS > Improved relationships with suppliers and customers introduction. > Accelerated responsiveness to marketplace changes
Using the tollgate concept to review the
>R emoved barriers between functions and enhanced organizational focus and efficiency
Lean Product Development Steps for Trail King Here’s how the Design for Lean Sigma (DLS) team, comprised of TBM and Trail King managers, hit the ground running: Intro for Senior Management Voice of the Customer Early Stage Collaboration Concepting
Trail King’s first event was in July of 2009 and introduced senior managers to DLS. A month later, another event focused on voice of the customer using The House of Quality and the application of tools to the hydraulic trailer product still in the concept stage. A groundbreaking, week-long event introduced both DLS and early stage collaborative planning to two of Trail King’s engineers, a shop supervisor and two sales leaders — the designated “core team” for the hydraulic trailer project. A second event focused specifically on “concepting.” Jorgenson said the goal was to determine: What do we have to do in order to build this?
OpEx Review | March 2012 | www.tbmcg.com | 7
Technology Matters
Keep It Simple
Consider automating the policy deployment process.
By Tom Morin
Whether the goal is to grow revenues, free up cash or increase margins, companies that do policy deployment well achieve their targets faster and more effectively. Policy deployment — which also goes by strategy deployment, hoshin kanri, hoshin planning and other terms — helps organizations focus on the critical few initiatives required to achieve breakthrough goals and remain focused on those initiatives every day. It forces managers to dedicate time to strategic work amidst daily crises and quarter-end financial pressures. After the leadership team has identified the critical breakthrough objectives that will move the organization forward, they can work through the policy deployment process to define and link the appropriate performance measures, list key projects and action plans, and assign responsible managers. For companies that are doing kaizen events and making clear improvements, but can’t calculate the ROI or aren’t seeing any bottom-line impact, policy deployment can help make the connections.
When I worked with Shingijutsu, the Japanese consulting firm, the sensei made us do everything manually, including policy deployment. Just as primary school kids learn math by working problems out the long way before being allowed to use calculators, manually filling in the X matrix forces managers to stay attentive, keep it simple and develop a deep understanding of the process. Twenty years ago, when we first began helping clients adopt policy deployment, we drew everything out on flip charts, and we were vehemently against anybody burying the work in any kind of system. The goals had to be readily visible to everybody. When businesses began to use Lotus Notes® and Microsoft® Excel, those tools naturally helped collect and collate the policy deployment data required to track performance. The problem with such spreadsheets is that you always end up with multiple versions of files,
Policy deployment requires discipline. In most companies everything seems important, everything requires immediate attention, and nothing really gets done.
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and therefore multiple versions of the truth. Someone has to be in charge of pulling it all together. A long-time client of ours confided in me recently that he spends 40 to 50 hours a month chasing people down, following up, collecting their forms and verifying the data. That’s more than a week per month that he could be doing more value-added work! Not only can software communicate the breakthrough goals, and maintain linkages between metrics and continuous improvement projects, it tracks performance on an ongoing basis as well as the effectiveness of any countermeasures.
Dploy Solutions converts planned targets and actual performance into a quick reference tracking chart to make it easy for everyone to see hits (in green) and misses (in red) versus plan (blue trend line).
Technology Matters, continued
In addition to reducing the administrative burden, by making it easier to capture and verify information, today’s cloud-based software for managing policy deployment offers one major advantage over manual processes: Visibility.
One of the features that our clients who are using the Dploy Solutions tool specifically like is that it allows such visibility, and forces conversations about the effectiveness of countermeasures, thereby speeding up further adjustments. It’s similar to when value-stream mapping first became popular. The tool forced people to go and look at what was actually happening in the factory instead of making pretty-looking flow charts on a computer. Then they documented the material flow and value-add time on taped-together sheets of paper hanging around the room. After people understood the concept, it made perfect sense to use software to make the
process simpler and, especially, make the maps easier to capture and share. It doesn’t matter if you’re talking about policy deployment, or any other process or information system that you may have.
Dploy Solutions can help make monthly meetings easier to manage. The “bowling” chart makes it easy for managers to see the entire year, hits and misses. Easily navigate to trends charts, pareto analysis, countermeasures and action plans to understand what actions are underway to address misses (red).
When you take all of the clutter away, focus on the few top priorities, and make those priorities easy for everyone to see, people are more apt to respond to and use the information than when it’s hard to get to, invisible, or they don’t trust it.
In our experience, clients who simultaneously commit to a sound process and embrace technology can implement faster and achieve a higher percentage of their breakthrough objectives.
Beyond Spreadsheets
Automating Policy Deployment Started at Danaher TBM Consulting Group, Inc. (TBM) acquired the technology for Dploy® Solutions from Sheri Nemeth and Mike Heath in 2007. Prior to joining TBM, Sheri was Corporate Director for the Danaher Business System and Mike worked as President of the Danaher Tool Group in Asia where they both focused on rapidly integrating new acquisitions. Together, they developed a cloud-based software system for automating the policy deployment process that has now evolved into a full suite of web-based software for managing policy deployment, tracking KPIs and aligning CI initiatives to strategic objectives. Today, several multi-site, global organizations are using Dploy Solutions to more easily manage resources, improve accountability and visibility across the enterprise, and achieve critical breakthrough objectives.
Tom Morin has over 20 years of global experience leading business-wide LeanSigma® transformations and driving cultural change in manufacturing and service organizations. Before joining TBM, Tom was an operations and continuous improvement manager at Otis Elevator. He also taught Flexible Manufacturing for UTC Corp. in its divisions around the world.
OpEx Review | March 2012 | www.tbmcg.com | 9
TBM Online
Best of the Blogs
Pseudo-Value Streams, Lean Assessment, Policy Deployment
While everyone has an opinion about what makes for a good blog, TBM’s blog-writing consultants have one rule: Don’t waste anyone’s time. If you’re looking for worthwhile continuousimprovement-focused blogs that spur both thought and action, sign up via RSS to receive our blog posts at www.tbmcg.com/blog. You can also follow us on Twitter @TBMTalks and @dploysolutions. Here’s a sampling of excerpts from some of the best blogs recently posted by TBM consultants. The full blogs are available at the TBM website.
Does Your Company Have Pseudo-Value Streams? When lean process improvement activities Feb. 8, 2012 Posted by Ku Ho (Jonathan) Chong move beyond production and distribution
operations, and into transactional areas, it’s a great time for companies to abandon artificial market segments and set up end-toend value streams that encompass all aspects of an enterprise. Organized according to the specific set of values being sought by a group of customers, end-to-end value streams should include product development and commercialization, marketing and sales, fulfillment, and after-market service. When set up this way each value stream is more tuned in to customer needs than a functional or product-oriented sales and fulfillment organization. The company will then be able to develop, commercialize and
deliver new products and services to each customer segment in a short period of time with greatest efficiency. Many companies have pseudo-value streams based on functional hierarchies, how products are made or artificial market segments. An electronics manufacturing company, for example, may be organized based on technology level. Lower-level technology products may move through a consumer channel, and higher level products will be sold through a commercial channel. Many companies have separate organizations that serve the public sector and the private sector. Such structures don’t provide optimum service levels for customers.
“ The company will then be able to develop, commercialize and deliver new products and services to each customer segment in a short period of time with greatest efficiency.”
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TBM Online, continued
Mirror, Mirror on the Wall — Who’s the Leanest After All Feb. 13, 2012 Posted by Gary Rascoe TBM recently launched a web-based, online lean assessment tool. If you haven’t had the chance to take the assessment yet, I hope you’ll consider doing so. You can take this online assessment at www.tbmleanassessment.com.
I recently had the opportunity to conduct a lean assessment at a well-known consumer products company. This company has been on a lean journey for over 10 years. As you might expect, they made significant progress over the years. The fact that they are still manufacturing a product in the U.S. when most competitors have outsourced manufacturing to low-cost regions is a tribute to their success. They started with an
outside consulting firm but later decided to continue the journey on their own. The company asked us to assess their lean progress with “outside eyes.” We found that they failed to make lean or continuous improvement a part of their everyday culture.
“ The fact that they are still manufacturing a product in the U.S. when most competitors have outsourced manufacturing to low-cost regions is a tribute to their success.”
Strategy Deployment Can Keep Leaders Focused On Systems Thinking Feb. 22, 2012 Posted by David Pate
Business activity moves much faster than it did even five years ago. Technology and globalization have accelerated every business process and function and will continue to do so. In terms of business leadership, this escalating velocity is as big a leap as horseto-car and train-to-airplane. It can be a dangerous environment for unprepared leaders because unforeseen challenges can cause them to overreact and jump off of their strategic paths and fight fires. That’s why effectively leading organizations today requires Systems Thinking.
Systems Thinking is all about organizational alignment and leveraging that alignment to achieve strategic breakthroughs in a total team effort. An analogy is a boat’s crew: Everyone has to work together with one objective, or the boat won’t move. A leader’s job is to fill the boat with the right people, orient the boat the right way, and then provide a compass. If you can do these successfully, you’re already 80 percent to your destination. Recruitment and training are a different challenge, but providing the compass and getting resources pulling in the right direction result from Systems Thinking.
“ An analogy is a boat’s crew: Everyone has to work together with one objective, or the boat won’t move. A leader’s job is to fill the boat with the right people, orient the boat the right way, and then provide a compass.”
OpEx Review | March 2012 | www.tbmcg.com | 11
Updates and Events
How Much Progress Have You Made? New LeanSigma® Progress Assessment tool from TBM Consulting Group scores business practices in four key areas: culture, tool usage, customer and supplier relationships, and growth. An online progress assessment tool released by TBM in January scores companies based on 1) cultural attributes, 2) knowledge of which tools to use and when to use them, 3) how well they use lean tools to serve customers and suppliers, and 4) ability to leverage improvements to achieve and support growth initiatives. It’s painless! The assessment takes about 15 minutes to complete and produce individual assessment results. To participate, visit www.tbmleanassessment.com.
Tune In to TBM Applying Lean Principles to Innovation 20/20 Pharma and Pfizer recently hosted a podcast featuring TBM CEO and Co-Founder Anand Sharma, and Richard Holland, Vice President, Europe. They participated in a panel discussion about how pharmaceutical companies are using Lean and Six Sigma to streamline and improve R&D processes. Listen to the podcast at tbmcg.com. Go to the resource center and select “podcasts.”
2012 LeanSigma Global Summit: Call for Speakers Atlanta, GA, September 19–20, 2012 We are working on the agenda for the LeanSigma Global Summit. Contact TBM Event Coordinator Dara Shoemake (919-313-1820, dshoemake@tbmcg.com) with suggestions or to submit a speaking proposal. Topic suggestions and a submission form are also available at www.tbmcg.com/LSGS.
Publisher: Anand Sharma: asharma@tbmcg.com Executive Editor: Angela Scenna: ascenna@tbmcg.com Featured Columnists: Anand Sharma, Tom Morin Contributors: David Drickhamer, Tonya Vinas, Jonathan Chong, Gary Rascoe, David Pate, Ashwin Badve, Ken Koenemann, Keith Yeater Art Direction and Design: Crossbow Group, crossbowgroup.com Printing: Carter Printing & Graphics, Inc., carterprintingnc.com
OpEx Review is a publication of TBM Consulting Group 4400 Ben Franklin Boulevard Durham, North Carolina 27704 800.438.5535 www.tbmcg.com
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TBM, the TBM logo, and LeanSigma® are registered trademarks of TBM Consulting Group, Inc.
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