Part 2: Continuing the Journey of 7 Steps
As discused in "Part 1: Beginning a Journey of 7 Steps," we all aspire to have a state of operational excellence in our organizations, which is easier said than done. Operational excellence is about more than simply adjusting the current way of doing things, although that is how it is often perceived. For component manufactures, LBMs, and millwork companies, operational excellence is about setting up a systematic operational structure to identify and capitalize on improvement opportunities, and it is equally reliant on harnessing non-technical elements like organizational culture or advanced processes or automation.
7 Steps to Operational Excellence
As mentioned last month, there are not just 7 Steps nor are these written in stone. The 7 steps represent a general roadmap that our industry can follow toward the goal of operational excellence, independent of any allegiance to a particular improvement methodology.
The first three steps were:
Step 1: Discover & Solicit Ideas
Step 2: Benchmark & Validate
Step 3: Evaluate & Quantify
Here are the final four steps.
Step 4: Simplify & Standardize
Having worked out what you’re going to change and why, I sometimes see many companies jump straight in and start to create new processes or automate existing ones. However, sometimes this just results in delivering the wrong things faster! Instead, the first implementation stage of improving the way you work is to consider how to simplify the work by asking if there are steps and activities that you don’t actually need to do – classic waste elimination. Once you have identified your preferred processes and practices and simplified them as appropriate, then you can consider standardization.
What Success at this Step Looks Like:
You have a clear idea of processes and practices you need in your operation and wasteful activities have been reduced.
Step 5: Generate & Automate
Having worked out which parts of LBM/Component/Millwork operations, processes, and practices to focus your improvement efforts on, you can now think about streamlining the work. Often this will include some sort of workflow or process automation. For more complex processes, it is quite common for people to consider automating them in a business process management tool, however, typically this automation will only address 70% of the cases going through the automated system. Many will then look at using a less sophisticated workflow system to assist our teams in dealing with the other 30%, but again life is more complex, and in the end 10% of those cases may wind up being handled manually. This exercise is something our industry sometimes does not handle well. We look at a new automated piece of equipment (a saw, gantry, material handling, etc.), but we have not taken the time to map out the process/opportunity that exists and what our real expectation would be.
What Success at this Step Looks Like:
When thinking about automation, don’t assume that everything needs to be heavily specified, planned, and implemented. In some cases, if you provide your teams with the ability to process map, review the current metrics being achieved in the process, etc., they will create the systems they need to improve productivity.
Step 6: Share & Govern
Simplifying, standardizing, and automating are all useful steps to take, but only if people know about it! Many times I see where companies have implemented great new ideas, processes, or systems, but they fail to deliver the expected results. When I drill down to discover why, most of the time it occurs because the people who needed to know about the new processes either did not fully understand them or had no knowledge of them.
People are not machines – if you want people to act in a prescribed manner, they need to understand why they are being asked to do an activity a certain way, and also to be involved in the decision making process. As a part of your overall operational excellence initiative, you should consider how you will push accurate information to people in a way they can easily access and consume. By ensuring that the right information is available to the right people at the right time, it is possible to deploy practical governance. How often have you heard, “it wasn’t my fault, I didn’t know we did it that way” or “nobody told me things changed?”
What Success at this Step Looks Like:
In our companies, you need to be sure that certain things are known by all, the risks understood, and that as an organization you have taken all reasonable steps to document and train your teams on these new procedures or new pieces of automated equipment so they produce the results we expect.
Step 7: Monitor & Measure
Improvement and excellence projects are only effective when they deliver the expected results. To this end, you need to ensure that, while you may implement new metrics for measuring results, you retain some of the old measures, too. It is when you compare the results of now vs. then that you can see the differences. Beware not to retain all of the old metrics as many will no longer be relevant. You also need to ensure that you have appropriate monitoring mechanisms in place. Frequently, success occurs only when people see that management is watching, and as management’s attention wanders, people go back to the old ways of working.
What Success at this Step Looks Like:
Success in this step can be thought of as “Maintaining the Gains.”
These seven steps are meant to serve as a practical guide for any operational excellence initiative. Although they’re broad, they’re applicable to our industry because you can adapt the principles to fit the needs specific to your current situation.
Remember that operational excellence is no longer the exception, it’s the expectation for our advancing companies. To remain competitive in your market, you need to take a considered and intentional look at your business and make changes where appropriate. These seven steps will set you on the right path to achieving operational excellence. And if you need assistance here, contact 4Ward Consulting. We have helped numerous companies put new plans for operational excellence into place. Our success has been measured in how companies have grown their lumber, component, and millwork business, and in the substantial increase in profitability.
There is still time to register for BCMC and I encourage you to stop by the 4Ward Consulting Group booth #623 to talk about how we have helped hundreds of companies in their journey to Operational Excellence!
Ben Hershey is CEO of 4Ward Consulting Group, LLC. When the industry needs an ACTUAL expert, they turn to 4Ward Consulting Group. 4Ward Consulting Group is the leading provider of Management and Manufacturing Consulting to the Structural Component and Lumber Industry. A Past President of SBCA, Ben has owned and managed several manufacturing and distribution companies and is Six Sigma Black Belt Certified. Ben has provided consulting to hundreds of Component Manufacturers, Lumber Dealers, and Millwork Operations in the past seven years. You can reach Ben at ben@4WardConsult.com or 623-512-6770.
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