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Five steps to excellence.

EXECUTIVE SUMMARY

No one ever said excellence was painless. More than anything else, keep in mind that achieving excellence is largely a human resources issue. Begin by aligning expectations (easier said than done), then allow people to make mistakes. Measurement and commitment to success are essential, of course. And finally, support continued success.

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The drive for excellence has become a ubiquitous quest in manufacturing. While there are almost as many definitions of manufacturing excellence as there are organizations trying to achieve it, standards to which all should aspire do exist. Manufacturing excellence is the process of achieving benchmark performance that includes:

* Minimum 1.33 Cpk first-time quality

* 100 percent on-time customer service

* Year-over-year process cost reduction

* A zero-harm commitment to safety

While presenting the critical few elements of manufacturing excellence, the above list also challenges the concept of continuous improvement. Organizations have been working on these four performance areas for years without achieving these levels of performance. Excellence is not a matter of getting better each year. It is about setting expectations and taking specific steps required to achieve them. Simply put, excellence is a relentless commitment to an in-control process ethos. Establishing and maintaining all processes in statistical control is the minimum first step.

To identify and personalize the need to set benchmark results as minimum standards of excellence, all one has to do is listen to the constant media reports of outsourcing and competitive job loss or, in many cases, simply visit and talk with one's unemployed neighbor. The need for excellence is without a doubt the most pressing issue facing U.S. management.

For those who are not there, achieving a 1.33 Cpk first-time quality level and 100 percent on-time customer service reduces product cost and increases profitability to unimagined and unexpected levels. In many cases, margins can and do improve to such a degree that outsourcing becomes impractical and domestic competition is dwarfed. Operations and quality experts who have achieved such performance levels have witnessed 20 percent to 30 percent overall cost reductions.

Add to this the power of year-over-year actual product cost reduction and the creation of a caring safety environment, and the odds of survival begin to shift. Excellence is about protecting jobs from foreign and domestic competition. It is about growing the business and providing balance to all stakeholders. It is about acknowledging that the past efforts of employees are the only reason current opportunities exist.

Without such performance excellence there is no way employees will ever be able to enjoy their rightful place in a balanced reward system. In today's market, manufacturing excellence is a survival mandate and a management imperative. Understanding this reality and accepting direct responsibility for its achievement are the foundation of excellence.

Like so many other seemingly complex challenges, the process of achieving excellence can be synthesized down to five easy-to-understand sequential steps.

1. Establish clearly understood and aligned needs and expectations

"Clearly understood and aligned"--simple words, yet establishing mutually agreed-to expectations is one of the most difficult of all performance elements.

"There was no doubt in my mind that we agreed that the primary emphasis this month would be on improving first-time quality. We had a long and intense meeting late last month. All the division managers were there. We all agreed that we just had to do something to reduce our reject rates. Now look, not only did we not improve, but June's performance was lower than May's. It's just plain unacceptable."

While there are few managers who would disagree that clear and unambiguous expectations are the first step on any journey, few understand and accept the concept that verbal agreement does not indicate clear and aligned expectations.

Time and time again, we face the disappointment of less than optimal performance when we were absolutely sure there was a common understanding, the skills to do the job, and a willingness to perform. Yet managers often seem to be caught off guard. The reason is simple: In most cases of performance shortfall, there never was a common understanding of expectations.

It is tough for many managers to accept the fact that verbal agreement without proven experience reflects a willingness to try, and at worst is a means of ending the conversation and moving on. A yes can mean I'll try or I don't know how to do it and you won't listen, so let's move on or I'm not going to do it since in this organization, everything is optional anyway. It might even mean Yes, we have a mutual agreement and commitment to the objective.

There are many elements required to ensure truly robust and meaningful expectation agreement, starting with a clear acceptance that the performance is both achievable and relevant and including a commitment to give the required time and resources. But above all else, to achieve expectation alignment and understanding, it is imperative that we understand that it is extremely difficult if not impossible for people to understand and agree to do something they have never done before. They might well agree with the need for the outcome--stop lost-time accidents or increase quality performance, for example--but how?

Understanding this is important in setting expectations for excellence. Excellence means many different things to different people. The base expectation for manufacturing excellence means nothing less than achieving a 1.33 Cpk first-time quality Easy to say, yet its achievement requires in-depth knowledge of the process, statistical measurement, and an ability to identify process variation. It requires experience and competence in variation reduction. It requires what quality guru W Edwards Deming would call profound process knowledge and it requires full-time people and resources, without which there is little chance of success.

2. Ensure performance capability and organizational priority

If someone has never done something before, chances are he or she will not be able to do it right the first time or maybe even the second or third time. People cannot agree to do something they have never done before. They can agree to try, but people simply don't know what they don't know.

One of the most interesting of all organizational misconceptions is the belief that good people can do anything. I once sat in utter amazement listening to a group of executives chastise a project team that had failed at its first two tries at establishing Six Sigma product quality. I can still hear the exact words: "Whole divisions at GE can do this, why can't you get even one process in Six Sigma control?"

The reality was that neither the challenging managers nor the beaten engineers had ever taken an out-of-control process to an in-control state. While the engineers knew the meaning of Cpk, neither the managers nor the process team could even imagine what a true 2.0 Cpk might look like. It is producing at a level of variation that is confined to a centered, in-control distribution that is only one-half the spread of the product or process specification. In other words, a 2.0 Cpk (Six Sigma) performance requires such profound knowledge and experience that every step of the process is fully understood, maintained in an absolute in-control state, and constantly monitored to identify the slightest variation to lead and guide sustained excellence.

So too does achieving 100 percent on-time customer service start with a need for in-depth understanding of the processes. It starts with the need for the same in-depth process knowledge as required to achieve 1.33 Cpk first-time quality To this, one must add profound knowledge of the customer's business, the customer's and one's own supply chain, and an organization ethos of excellence and customer service.

In all areas of performance, the engine of excellence is knowledge.

On reflection, it becomes only too obvious why so many initial accomplishments do not hold. Manufacturing excellence is not just an extension of what we are already doing. Manufacturing excellence is built around an organization's ability to set the highest of variation reduction goals and then dedicate the resources to both achieve and sustain those objectives.

3. Monitor alignment of performance and expectations

In our reach for excellence we are reminded of one of the most time-tested management tenets: You get what you measure. Robustly monitoring output and output variation is the only way to anticipate and maintain performance. It is what control charts were created to do--once in control, to measure performance to allow early identification of performance movement or process deviation.

Measuring both results and actions taken in a statistically defined manner is a vital key to sustainability. Process and output measurement also provide the opportunity to develop a constant discrepancy check between expectation agreement and performer capability. If each time a result falls short of expectations there is an honest, joint effort to identify what additional knowledge, resources, time, or expectation clarity is required to ensure success, result monitoring becomes the catalyst that ensures organizational focus and commitment. If the desired results are achieved, it becomes the focus of celebration and encouragement. In either case, constant variation monitoring is the only real tool managers have to encourage and support continued focus and results sustainability. Without it, over time, all things will drift off center.

4. Maintain focus on a joint commitment to success

Unlike individual performance and individual achievement, manufacturing excellence cannot be achieved without a complete, cross-organizational commitment. Excellence requires the best effort from all employees. Like any team achievement, the base ability is determined by individual skills, attitudes, and experience. Excellence can only be achieved by a team of highly skilled and experienced practitioners, each making a high-value individual contribution. The overall result, however, will be determined by the degree of teamwork, mutual support, and coordination of effort.

For example, something as simple as reaching the first step of performance excellence, that of achieving a 1.33 Cpk first-time quality level, requires integration of effort among the line, engineering, logistics, customer service, and quality employees. A single decision to ask the line to produce-to-order will have far-reaching effects on cost, product quality, and the organization's ability to serve the customer. Setups increase, lot sizes decrease, receiving and shipping configurations all change, and in the end a very simple-sounding decision affects almost everything an organization does.

Another essential key to excellence is the degree to which the performer and the leader link their mutual success. Excellence is not about determining who did what. It is all about mutual success. It requires an ongoing joint commitment to do whatever is necessary You fail, I fail is a key leadership attitude of all excellence.

Excellence is achieved only if there is a commitment to joint success at every level of supervision and only if an organization can get the very best each employee has to offer. The driver of this joint commitment can be found in the values of the organization and individual supervisors. If, within the heart of each supervisor and leader, employee skills and knowledge are seen as the linchpin to performance, excellence has a chance. If the journey begins with a personal commitment to each employee's success, then excellence is possible.

Stated another way, excellence can only result from a value-driven ethos of respect and mutual dependence. The concepts of respect and mutual dependence circle us back to the earlier steps of setting clear and aligned expectations, ensuring performer capability, and putting in place the constant monitoring required to provide early and verifiable performance trend indicators. In studying broad-based performance, shortfalls are seldom caused by a lack of initial effort. Performance shortfalls are caused by an unaligned expectation agreement, limited capabilities, and the lack of an organization's commitment to excel.

5. Design and instill sustainable process discipline

The final step in achieving excellence is to establish and sustain robust process support.

There are two things that must be acknowledged both early and forever in the performance cycle if an organization is to achieve and sustain such performance. First and foremost is an understanding and acceptance that management discipline is the imperative. Variation of any kind is the enemy of excellence, and changes in direction, emphasis, or priorities are changes of the worst kind. When accepting the four measures of excellence, one is truly embracing their last program-of-the-month.

There is little need for grand quality programs and cost reduction initiatives when an organization is consistently producing at or above a 1.33 Cpk. There is little need for a customer service program when there is 100 percent on-time customer service. And with a caring, respectful, and mutually dependent ethos comes a true zero-harm culture.

I once heard that the central goal of all manufacturing is to make things boring. Stated another way, the process of excellence is to provide such discipline and consistency that performance deviations are anticipated and prevented. Managers know the details of how to establish an in-control process and live and breathe the fact that, once achieved, there must be single-minded sustainability passion. This, however, is not about leaving things alone. It is about understanding that the great challenge is variation control and sustainability in the midst of constant change--change in people, change in process life cycle, change in the market, change in product, change in processes, and constant change in the lives and priorities of each employee.

Managers, coaches, mentors, and leaders must understand the factors that lead to variation and put in place processes to ensure that each operator, supervisor, quality and project engineer, and staff member is repeatedly taken through the learning required to achieve and sustain performance excellence. It means we can assume nothing. We must, each morning, be willing to compete for the attention of each individual. We must be willing to accept that the memory of the human mind has a half life, that if left unattended, it will forget and replace past priorities with whatever is most recent and urgent at the time. While many do not believe, it is purely and simply a matter of accepting two truisms of life: Use it or lose it, and Practice makes perfect.

Excellence means never letting up.

Cpk DEFINED

"The process capability index, or Cpk, measures a process's ability to create product within specification limits. Cpk represents the difference between the actual process average and the closest specification limit over the standard deviation, times three.

"By convention, when the Cpk is less than one, the process is referred to as incapable. When the Cpk is greater than or equal to one, the process is considered capable of producing a product within specification limits. In a Six Sigma process, the Cpk equals 2.0.

"The Cpk is inversely proportional to the standard deviation, or variability, of a process. The higher the Cpk, the narrower the process distribution as compared with the specification limits and the more uniform the product. As the standard deviation increases, the Cpk index decreases. At the same time, the potential to create product outside the specification limits increases."

Source: Quality Digest, December 1997

A wait-and-see approach to COOPERATION

Human beings are among the few creatures able to work well cooperatively, According to University of Pennsylvania evolutionary psychologist Robert Kurzban, our success at cooperation results from three personality types:

* Cooperators, who do the most work

* Free Riders, who do as little work as possible

* Reciprocators, who hold back to determine the chances of a project's success before devoting their full energy

"We found that these traits remained fairly stable among people, and you could reliably predict how a group might perform if you know the percentage of each type of person in that group," said Kurzban.

He also noted that most of us (about 63 percent) are Reciprocators. "The simplest way to make use of Reciprocator potential is to keep everyone apprised with information about the successful contribution of others within the group," he said. "This way, you show them that there is something to gain from their efforts."

Cooperators make up about 17 percent of the population and Free Riders, 20 percent.

INCLUSION = PRODUCTIVITY

While many organizations strive for a culture of inclusivity, a lot of people still perceive themselves as outsiders, and that's bad for productivity.

Ultimately, organizations that thrive will be those that divest themselves of prejudicial attitudes and unleash the potential for a diverse work force, according to Mor Barak of the University of Southern California.

In addition to her own research, Barak draws on findings from a Rockefeller Foundation-funded international think tank.

"Invariably, the employees who were more included in the organization's decision making and information networks were more satisfied, more committed to the organization, and felt more productive than those who were not," said Barak, the Lenor Stein-Wood and William S. Wood Professor in Social Work and Business in a Global Society.

Barak advocates strategies for instilling inclusive policies and practices, especially for corporations struggling with the effects of discrimination and exclusion on their moral reputation, legal standing, and bottom line.

She believes that inclusive workplaces value the perspectives and contributions of individuals and groups of employees. The payoff is higher employee retention, enhanced company stock price, and more goodwill from customers, Barak says.

Speed vital to SUCCESS

Speed, flexibility, and adaptability are the keys to competitiveness, according to CEOs who were polled in a Conference Board survey. In fact, 88 percent of those surveyed cited those factors as a top priority for their companies.

"Developing an agile, adaptable work force that embraces change and aligns itself quickly will be tomorrow's competitive differentiator," said Carl Steffen, vice president, HCM marketing, PeopleSoft Human Capital Management, and co-sponsor of the survey. "CEOs who are willing to invest in the people, processes, and technologies that promote these objectives will De the ones who will reap the future benefits."
COPYRIGHT 2005 Institute of Industrial Engineers, Inc. (IIE)
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2005 Gale, Cengage Learning. All rights reserved.

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Author:Elliott, George
Publication:Industrial Management
Geographic Code:1USA
Date:May 1, 2005
Words:2946
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