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Three key factors for continuously improving your supply chain

Supply chain

Executive Summary
Speaking at the European Manufacturing Strategies (EMS) Summit in Germany, former Procter & Gamble Supply Network Operations Transformation Manager, Paul Bittinger, shared insights about succeeding with an integrative improvement system. This article, adapted from his presentation, discusses what Paul believes are three critical factors for success: maturity-based capability, sustainability and integration.

 

Integrative improvement* systems should be based on the principles of Total Productive Maintenance (TPM), High Performance Work Systems (HPWS), and the Toyota Production System (TPS). The system should seek to eliminate loss and waste by targeting improvements in quality, costs, productivity, employee morale, safety and customer service.

Furthermore, Paul Bittinger feels that there are three key ingredients that make up a recipe for continuous improvement success.

An integrative improvement system should seek to eliminate loss and waste by targeting improvements in quality, costs, productivity, employee morale, safety and customer service. 

Success Factor 1: Maturity-based capabilitySupply chain
“The name intimates exactly what we mean when we talk about maturity,” says Paul. “The organization’s, plant’s or site’s integrative improvement journey should be mature or at the very least — if it’s in its infancy — should be showing signs that it is maturing. The ultimate state of continuous improvement maturity — the end state — is one where the organization has the capability to run the strategic business in the daily business.” Mature organizations have a strong culture of innovation and sharing of production know-how. In essence, the organization will have become a learning network where improvement capability and know-how are shared and embedded across the entire value chain.

Success Factor 2: Sustainability 
Organizations need to ensure that the culture of continuous improvement is sustainable in the long run. Why? In Jim Collins’ book entitled Good to Great, he wrote that after a two-year period, two-thirds of continuous improvement (CI) initiatives will have faded or disappeared entirely. This is because people come and go. Leaders come and go, and with them, sometimes their best efforts and intentions walk out the door when they leave. Integrative improvement needs to be embedded inside organizational processes so that when leaders leave, their legacy stays behind. One way to ensure this level of sustainability is to ensure standard work is in place. For instance, you should be able to know that 95% of changeover work is standard work. Another precursor for sustainability is codification. Job roles should be specified, learning paths should be documented, work processes should be standardized, where possible, and documented so that they are readily available for any new team members stepping into the role.

Jim Collins wrote that after a two-year period, two-thirds of continuous improvement (CI) initiatives will have faded or disappeared entirely.

Success Factor 3: Integration 
Paul illustrated this last point by way of a question to the audience: “How many of you can answer Yes to this question: Has every defect that occurred in your end-to-end supply chain in the last 24 hours been identified, logged and fixed or has it been assigned for resolution with a daily process in place to check for resolution?”

Supply chainThis is the level of integration that a good integrative improvement system should ensure. Instead of assessing defects or errors at site or line level, the entire end-to-end supply chain should be analyzed. “When we say end-to-end,” Paul contends, “we mean all the way back from the customer, through your distribution, storage, your plant, all the way through to raw material suppliers and back to their suppliers. We look at it in this way because, for example, the defect might be presenting itself in the plant, but the recovery might be in making improvements in various other links in the supply chain.”

Conclusion
To succeed at integrative improvement, the organization’s base capability must be in place in order to drive continuous improvement. Once the base capability is in place, the organization can concern itself with moving through the various stages of integrative improvement maturity toward a sustainable and integrated learning network.

*Integrative improvement is the sustainable approach to continuous improvement. It seeks to achieve best-in-class operational capability across the entire end-to-end supply chain. It does this by integrating continuous improvement approaches such as Lean, Six Sigma, WCO, TPM, TQM and SCO across all business functions and levels as well as into the maturity-based transformation process to create a single, codified integrative improvement system to ensure CI efforts are holistic, ongoing and sustainable.

 

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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