An effective transformation to world-class operations requires a shift in the organization’s culture, writes Ed Koch, Digital Strategy Director at continuous improvement specialists, Competitive Capabilities International (CCi).
All manufacturing and supply chain leaders understand the power of operational excellence, and the necessity of digital transformation.
However, there are challenges and obstacles, and many manufacturing and supply chain leaders are seeking ways to simultaneously catalyze progress in both. Two particularly interesting data points emerged from CCi’s recent Digital Transformation in Manufacturing survey. First, 52% of respondents will prioritize culture and change management in the year ahead. Second, 40% confirmed that their digital progression was being accelerated by having a strong culture of continuous improvement in place.
These findings confirm one of the fundamentals of a successful digital transformation as well as the quest for operational distinction. Strategies, new technologies, and data-centricity as important drivers of digital transformation cannot succeed without one critical piece of the puzzle: a continuous improvement culture.
A continuous improvement culture delivers results
A leading global soft drink producer was battling to reduce setup times at a bottling plant serving one of its largest regional markets. The breakthrough happened when frontline operators engaged with the challenge. Their active participation and ideas led to a 66% improvement in setup times, with a significant cost-saving impact. An effective culture shift had occurred, and the company’s leadership took the opportunity to deepen continuous improvement programs and widen their remit.
The power of engagement and capability building is also evidenced by a global food systems company. CCi’s Rapid Best Practice Deployment program helped transform leadership behaviors, refine KPIs, and instill initiative and problem-solving capabilities among frontline employees. Within six months, the rejuvenated continuous improvement culture helped to realize over $700,000 in cost savings at one of the company’s US sites. The program has now evolved into a sustained continuous improvement initiative, and has been expanded to other areas of operations, with identified targeted savings of $7 million.
These sorts of impacts and results prove that continuous improvement practices remain a foundation for leading-edge, world-class operations. To inspire a continuous improvement culture that will underpin operational excellence and digital transformation, companies should implement six actions:
1. Lead by example. Leaders who are seen to embrace transformation, and who visibly pursue excellence, motivate and inspire their employees to do the same. Push for kaizen’s small but regular improvements. Consistently communicate the importance of digital transformation – progress may stall without solid understanding and buy-in among all employees.
2. Streamline processes, simplify methodologies. Implement systems that enable people to work to the best of their abilities. Employees are more likely to be energized when initiatives are clear and woven into their everyday work.
3. Upskill everybody. Manufacturers wishing to encourage a growth mindset among the workforce must prioritize new capabilities, especially digital skills.
4. Challenge people to improve business performance. The two examples above show the importance of constructive challenge to engage frontline teams. Employees feel valued when participating in positive improvement that benefits their work environment Constructive challenge demonstrates an organisazation’s belief in its employees.
5. Share information and ideas. In larger organizations, successful improvements in one operational area – whether big or small – may not be effectively dispersed across all relevant areas of operations. Increase transparency by using digital dashboards and other knoweledge management tools to share learnings.
6. Recognize improvements and celebrate results. Acknowledging gains and rewarding people accordingly helps to motivate the entire company. This also boosts levels of employee engagement, which is fundamental to driving high performance and any form of change.
Culture unlocks value
A dynamic continuous improvement culture encompasses leadership commitment, employee enablement and engagement, and a dedication to results. It is a prerequisite for operational excellence, digital progression, and the future success of any business.