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 towards 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. Which means that in almost three quarter 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 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, budget and deadlines. Lean or QRM is in this case seen as a quick-win, as a cost saving program where 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 the support to include continuous improvement in their daily job, all the quick wins will eventually go west.
It is therefore 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 towards 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 with 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 will lead to excellence.