In an increasingly competitive marketplace the current organisational models for supply chains will no longer be effective A process excellence culture will enable an organisations resiliency and provide a competitive advantage to it in the future
A key question for business leaders focused on improving their results: What is process excellence and why is developing a process excellence (PE) culture important to them and their organisation? This question is critical irrespective of whether the organisation is a service provider or a product manufacturer. Process excellence is engaging the entire workforce in the relentless, ruthless pursuit and elimination of process variation and its sources. It involves driving a culture where all levels of the organisation are committed to continually improving the total value stream. Developing a PE culture is critical in an organisation’s effort to dramatically improve its current business performance.
First, organisations must realise that whether their current level of performance is “World Class” or “Worst in Class”, there is always room for improvement. When an organisation stops learning and improving, the competition will surpass it and gain an advantage. When organisations fail to be competitive, they become irrelevant and their right to exist is at stake.
Examining the business case for developing a PE culture, reveals many documented benefits which can be categorised broadly as improved productivity, top and bottom line growth and the organisation’s evolution from function-centered thinking to process-centered action.
Focusing on experiences in developing a PE culture in a pharmaceutical manufacturing environment are the specific examples of process excellence deployments at various manufacturing sites of Johnson & Johnson in the Americas and Europe. By systematically deploying process excellence, the company’s sites were able to achieve significant improvement in key areas. An example of these results at Johnson & Johnson is provided in the table below.
Johnson & Johnson’s pharmaceutical manufacturing network encompasses multiple countries, unique national cultures, different languages, and various technologies. Establishing a PE culture is dependent on several key factors such as Leadership, Improvement Methodologies, Culture and Performance Measures.
Leadership is the single most critical element in driving improvement. The leadership must create a vision of the future and engage the people of an organisation in understanding their role in driving the organisation towards its future. The vision should be a simple but powerful statement, preferably one sentence or phrase that serves as a focusing mechanism for all levels of the organisation. The vision and mission must be broadly communicated utilising a variety of mediums.
In addition to verbally articulating the vision, leaders must model the behaviours they desire in their associates. Highly visible, authentic leadership is essential. They must “walk the talk”. Less than authentic leadership results in zero credibility and the associates will not take the change management efforts seriously.
Leaders need to clearly articulate that process excellence is important to the business—it is the way things should be done. An expectation of continuous improvement must be set. Leading by example is the key. A minimum of 50 percent of the leadership team should be trained and/or certified belts. This increases credibility throughout the organisation and underscores the level of change management that will be required to drive improvement initiatives. Adults learn best by doing and PE culture is a learned behaviour.
Leaders are also accountable for putting in place the organisational infrastructure necessary to create and support a PE culture. Leadership must create the environment for success. A PE leader must be appointed to provide the organisation both direction and process management expertise. Failure on the part of leadership to create the infrastructure for success will hamper efforts towards improvement. An organisation will not be able to achieve or sustain improvement outcomes in case its leaders are not engaged, adequate infrastructure is not provided, and there is minimal commitment to the effort. An expectation of achieving different outcomes while utilising the same old approaches and doing the same things is extremely unrealistic. In order to achieve organisational improvement, the organisation should change its approach and utilise different tactics.
Another key role of the leadership team is to identify, prioritise and sponsor improvement efforts. Creating forums can help systematically track and review improvement projects and activities on a 3-4 week cycle. This relentless review process will create the environment of process execution and accountability.
The appropriate deployment and use of improvement methodologies is an important component of creating a PE culture. Lean thinking, Six Sigma and Design Excellence concepts appropriately deployed are key drivers of improved performance. Organisations must invest in developing core competencies in these methodologies. Developing a core group of people who are certified green belts, black belts and master black belts can become internal consulting resources to site and functional leadership teams. Certified belts can help provide various teams with just-in-time training to approach and resolve their business issues.
Each organisation starting down the path of continuous improvement should perform Value Stream Mapping (VSM) of each of their critical work streams and/or processes. VSMs enable leadership teams, process owners and trained belts to visualise the improvement opportunities associated with reducing Non-Value Added (NVA) work, mistake-proofing, waste reduction, process-variation reduction, etc. The leadership team, under the direction of the PE leader, should prioritise the improvement opportunities, assign resources to the various improvement tasks and review progress on a regular basis.
One of the most important activities in manufacturing sites is to identify their constrained work centres. Once the constrained work centre has been identified, a ‘rhythm wheel’ can be easily established. Rhythm is a product sequence that encompasses production frequency, optimised changeovers, and preventive maintenance and calibration schedules. By deploying rhythm wheels in constrained work centres, some Johnson & Johnson manufacturing sites were able to quickly achieve more than 25 percent increase in sustainable throughput.
5S—sort, set in order, shine, standardise, and sustain—is a simple methodology Johnson & Johnson has consistently used to engage its workforce in introducing Lean deployment efforts. 5S helps to create an orderly workplace, optimise material flows, improve the safety profile and compliance profile but most importantly, empowers people at Johnson & Johnson to take an active role in creating the environment in which they work.
An engaged workforce is critical to driving a PE culture. Site-wide Kaizen teams were deployed at Johnson & Johnson to serve as a forum to both engage and empower all of its associates. PE resources were assigned to each team to provide basic training in improvement methodologies. Armed with common terminologies, tools and the vision modelled by the leadership team, the associates were able drive tangible improvements in their work areas. These early wins proved to be contagious in the organisation and the Kaizen concept grew organically. Employee morale increased and improved scores on the Credo index. The associates closest to the processes came forward with their ideas and achieved significant cycle-time and cost improvements. An engaged workforce will convert their discretionary efforts into increased productivity.
But how much time does it take to create a PE culture? The answer is, “It depends”. Based on Johnson & Johnson’s experience, ideally an 18–36 month time frame is required to create a PE culture. As mentioned earlier, PE culture is a learned behaviour. Beginning slowly and by training 5–10 percent of the workforce in tools that are appropriate for their work centre is more effective in creating a PE culture. Appropriate tools are methodologies that teams can learn and apply immediately. The target training workforce comprise not just exempts and professionals, but the total workforce. Johnson & Johnson achieved great success with people in clerical, maintenance, craft, operator and technician roles. Appropriately focused and executed training is a key step in creating the critical mass required to achieve the necessary culture shift.
Once the initial 5–10 percent of the workforce is trained and engaged in continuous improvement activities, they must be recognised and rewarded for their successful efforts. Recognition and reward are critical to building upon the successes and achieving “quick wins”. Achieving critical mass will take 3-4 cycles of continuous improvement activities.
What percent of the workforce is required to achieve critical mass? To illustrate the challenge, we can utilise a story very loosely based on research conducted in the 1950s on monkeys inhabiting Koshimo Island. There are numerous versions of this story, most taking significant license with the data, but here is a version that is used to articulate the challenge in creating a PE culture. It demonstrates that when enough individuals in the organisation adopt a new behaviour, breakthrough results can be realised.
On the island of Koshimo in the 1950s, scientists conducted research on the behaviours of group of macaque monkeys. The scientists observed that a very limited sub-group of the monkey population began to wash off the sand of the sweet potatoes before they ate them. By 1958, the sweet potato washing practice grew to 57 percent of the population. Over the next four years the practice spread and by 1962, sweet potato washers became 73 percent of the population. Why? The yam washers had achieved critical mass by deploying the “each one can teach one” process. Just like sweet potato washing, PE is a learned behaviour and achieving a culture shift is dependent upon building sufficient critical mass to translate ideas and concepts into action. The PE deployment plan requires tactics to influence and convert critical leaders at every level in the organisation, from the manufacturing floor to functional leadership team. Engagement of seventy percent of the workforce results in transformational change versus simply incremental improvement. The PE adoption rate for one of Johnson & Johnson’s manufacturing sites is demonstrated in the
Metrics are the quantitative expression of business goals such as service levels, cost, cycle time attainment, compliance, safety performance yield improvements and other relevant measures of organisation performance. These metrics must be systematically collected, analysed and utilised by the organisation to drive the continuous improvement effort. The organisation’s performance on these critical measures must be constantly communicated to all associates. As an organisation develops and evolves, metrics need to be developed at each individual work centre level. Causal measures such as overall equipment efficiency, changeover cycle time, plan attainment, product yield and others must be collected, analysed and linked to the higher-level metrics so that everyone has a clear line of site between their day-to-day work centre activities and the site business metrics. It helps to communicate the metrics to the relevant people in the organisation.
It is important to measure performance in order to know the improvement. To improve, an organisation must develop the discipline to identify opportunities using data, prioritise these opportunities based on their impact to the business, resource the opportunities appropriately and review team progress on a regular basis. It is critical for leaders to communicate business performance at routine intervals.
As business performance improves, the metrics of the organisation must also change. The metrics utilised as baseline performance must be evaluated and modified as appropriate. Metrics and the performance thresholds should be revisited on a 9–12 month cycle to ensure that the organisation remains current against any changes in the internal or external business environment. The performance should not be evaluated against obsolete metrics, this measurement system may be out of step with a world that constantly changes and moves on.
The organisation’s culture, in order to be transformed, must begin with the leadership’s vision. That vision must be clear and simple to be understood by all associates. There are various diagnostic tools available to assess the organisation’s readiness for change.
The relative PE maturity of an organisation can also be diagnosed in a similar fashion. transformation involves changing from a traditional business model where each department works separately, to a process-focused model where everyone works toward the same goal. Transformation may require modifying the organisational structure or co-location of cross functional teams to assure focus on those core processes that enable flawless business execution. This creates an environment where the organisation is focused on problem and process improvement.
Leadership, Improvement Methodologies, Culture and Performance Metrics are the critical components in achieving a PE culture. Once an organisation optimises its core processes, it can begin to extend its PE culture to its suppliers and customers. This extended process focus will enable the creation of a value chain that extends from supplier to customer. A PE culture plays a huge part in creating this benchmark level of performance.