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Leadership’s role in operational performance improvement has changed

Leadership’s role in operational performance improvement has changed
Executive Summary
In this article, David Verble illustrates how management’s role in operational performance improvement has changed from problem-solving to people empowerment. When management involve their people in thinking and working through improvements, these people are much more likely to understand the changes and take ownership to make these changes work.

 

In my early days at Toyota in North America, we were handed a world class facility with Toyota Production System instructions and Japanese trainers. But we had to learn to solve any problems ourselves.

When trying to implement operations based on world class practices, we often fail to make the line teams responsible for problem-solving and we don’t entrench continuous improvement as part of management and operations.

Core practices of the Toyota Way

When Toyota defined “the Toyota Way”, they identified two fundamentals: continuous improvement and respect for people.

When Toyota decided which practices were core to its way of doing business, two of the three aspects identified were:

  • Toyota problem-solving
  • People development through the job
Toyota solves problems through its continuous improvement process, and by recognizing people’s ability to think and developing their problem-solving capability.

These aspects indicate that Toyota solves problems through its continuous improvement process, and by recognizing people’s ability to think and developing their problem-solving capability.

Plant operators participate in an improvement project

operational performance improvementUsing this developmental approach, I’ll share an experience at a multisite company I supported in its transition to lean. The regional director organized an improvement project involving four plants with similar processing operations. Operators from the four plants met for a value stream improvement workshop conducted by the regional continuous improvement facilitator and a lean consultant. The team mapped the state of the common process flow and identified bottlenecks, quality issues and other problems. They designed a future work flow state with major changes.

The new process flow showed a 30% inventory reduction, an improved fill rate and a 6% productivity increase. Similar results were achieved when team members implemented the improvements at their base sites.

A consulting firm directs improvement changes

A few months later, a consulting firm was hired to conduct rapid improvement projects at all the plants. They did more than 50 five-day spot improvements. Pilot projects were selected based on identified opportunities for significant performance improvements. The consultants decided the solutions for each location and directed improvement changes. Their improvements often replaced or discontinued the operator teams’ earlier work. Changes were pilot-tested and once the desired results were achieved, they documented the improvements. They then moved to other sites.

The new process flow showed a 30% inventory reduction, an improved fill rate and a 6% productivity increase.

However, within about three months, plants went from showing no further productivity improvement to an average 2% productivity loss. The consulting firm attributed this to poor plant management.

An informal follow-up by the regional continuous improvement leader found that where the spot improvements were made, operators had little understanding of what changed and why. They also didn’t really understand how to troubleshoot changes when problems occurred. In addition, the changes made by the consultants increased process outputs initially, but then inventory soon built up and created line flow bottlenecks.

Some key insights

This story illustrates two points:

  1. People involved in thinking and working through improvements in their work are much more likely to understand changes and take ownership to make them work.
  2. A processing operation is an integrated work system, and improvements that may optimize performance in one part of the flow don’t necessarily improve overall system performance.
New thinking recognizes that no one is better positioned to address an operation’s problems than the people who do the work.

I believe we set up manufacturing, processing or service operations to provide a product or service effectively and efficiently. Whether these operations are engineered or evolved from individual processes and practices, there are always problems that prevent operations from performing as intended.

Old management thinking gives managers and specialists the role of determining how to resolve an operation’s problems. But there are never enough managers and specialists to deal with problems. New thinking recognizes that no one is better positioned to address an operation’s problems than the people who do the work. So, what then is the role of the manager and specialist?

The new role of managers and specialists is to ensure that those doing the work see the problems at their level; recognize the importance of addressing them; and respect the thinking abilities of the people doing the work, while coaching them to develop their problem-solving skills. With those requirements, the new role of leaders and coaches may be the hardest job of all.

 

BIOGRAPHY
David Verble has been a performance improvement consultant and leadership coach since 2000. Prior to that, he worked for Toyota in North America for 14 years, first as an internal change agent and later as a manager of human resource development at the plant and North American levels. He has been on the workshop faculty of the Lean Enterprise Institute for eight years, and has done presentations and workshops to support a number of the LEI affiliates in the Lean Global Network.
David is a partner in the Lean Transformations Group and is based in Lexington, KY, where he works through Verble, Worth & Verble.

 

Disclaimer
This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCi) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.

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