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Posted 15 November 2016 by
Ben Van Lancker
VP for Binocs Technology

The number 1 reason why your operational excellence project might fail

At a given moment in time, almost all successful manufacturing plants and warehouses indulge themselves in an operational excellence program. Whether it be a formal, consultant-guided lean journey or a self-conducted action plan toward more efficiency, companies feel the urge to improve and innovate to keep up with an ever-changing world.

Studies have shown, however, that over 70% of operational excellence programs fail. This means that in almost three-quarters of all cases, the targeted results were not met. Often, quick wins were offset by a lack of sustainable long-term change

The number one reason for the failure of an operational excellence program is not a shortfall of knowledge but the inability of the company to install a culture of continuous improvement and alter the mindset of the workforce. Too often, a transformation program is imposed by upper management, setting strict KPIs, budgets and deadlines. Lean or QRM is, in this case, seen as a quick-win, cost-saving program in which operational excellence must be installed in a few weeks by a small project team. However, when the workforce does not feel included in the change—and when they lack the knowledge or lack support to include continuous improvement in their daily job—all the quick wins will eventually go south.

It is of vital importance that a company’s focus during a transformation program is not only on operations but also on people. For effective improvements, in the long run, change agents should be mobilized, an extensive training program needs to be available and your workforce must be involved in the project. This, in combination with management handing the right tools for continuous improvement to their employees, leads to great results.

In the summer, Bluecrux performed an operational excellence project at an international transport and tank storage group. In the past, the group had already taken many actions toward more efficiency, but sustainable change was never achieved. During the project, our focus was not on the operational actions but on standardization, communication and increasing the workforce’s problem-solving abilities. By guiding rather than imposing, we could trigger a continuous improvement culture within the company. Although it has been weeks since the closure of the project, the company’s operational performance keeps improving. To give a few examples: throughput time has decreased by almost 30% (which is now within target) and administrative and operational errors have dropped drastically.

This case proved again that only a culture of excellence would lead to excellence. Interested in learning more? Reach out to talk to one of our experts!