Manufacturing Excellence: When Continuous Improvement Falls Short
While continuous Improvement (CI) is a fundamental requirement for survival in today’s manufacturing world, CI programs rarely provide a source of competitive advantage. This is because 99% of organizations already have CI programs; so CI efforts merely maintain a competitive status quo. In addition, CI often results in too many improvement projects and unfocused projects with costs that exceed any bottom-line value. Without an effort to ensure sustainability, performance often reverts back to the previous norm. In today’s lean organizations, CI benefits are easily negated by their costs.
CI is an evolutionary process. But extraordinary threats and opportunities require a revolutionary, targeted response. CI is ineffective in response to:
- A sudden and severe economic downturn
- Increased market demand that requires rapid increases in throughput/capacity
- Commoditization of products that require cost reductions to remain competitive
- Increased segment competition that demands higher quality products to maintain competitive advantage
- Organizationally “self-induced” events (e.g., M&A, stretch goals resulting from strategic imperatives, strategy reformulations, etc.)
- An internal desire to effect quantum changes to the capabilities of the manufacturing operations (e.g., management insists that costs be cut by “x” percent, improve yield by “y” percent, etc.)
To successfully meet challenges presented by such events, an organization needs step-change improvements. This requires a process-based approach that helps to identify and bridge performance gaps in a way that ensures performance will be sustained within a time scale that meets the needs of the business.
Kepner-Tregoe (KT) has developed both a philosophy and practical project model to enable organizations to address extraordinary threats and opportunities. This is achieved by moving beyond CI with an intervention that focuses on extraordinary, sustainable change. KT Step Change is a robust three phase model (Diagnose — Implement — Sustain) which guides an organization through assessing the potential for improvement, selecting and scheduling the optimal project mix, and then making sustainable changes to operational practices, processes, procedures and performance expectations.
There is no argument that Continuous Improvement programs are vital to a manufacturing organization’s ability to stay competitive on a day-to-day basis. But they are often limited in their ability to quickly and effectively respond to extraordinary events and challenges that organizations often face. In these situations, a more appropriate response is an event-based approach that provides a temporary influx of effort. This helps the organization to focus on high-priority opportunities that directly respond to what is happening, yet ensures that improvements that are achieved are not temporary, but will remain in place moving forward.
Learn more in our next blog post, or...