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Achieving Operational Excellence - A better approach for a complex world

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Traditional approaches to achieving Operational Excellence have largely failed to meet expectations. Contrary to popular opinion, the root cause of this is not a lack of leadership commitment, but rather their failure to deal with growing complexity and the Vicious Complexity Cycle. Wilson Perumal & Company has developed an alternative approach and offers a Leadership Workshop to companies that want to tackle complexity and achieve Operational Excellence.

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Achieving Operational Excellence - A better approach for a complex world

  1. 1. Achieving Operational ExcellenceA better approach for a complex world
  2. 2. Wilson Perumal & Company, Inc.Source: 1) 2010 Accenture Survey2Growing complexity has limited the effectiveness oftraditional Operational Excellence methodologies• The environment in which companies operate isincreasingly complex, causing execution…and achievinggreat results…to become more difficult• Traditional process improvement methodologies like Leanand Six Sigma are ill equipped for attacking complexity– 58% of executives report their continuous improvementprograms produced minimal financial impact1– Lean and Six Sigma typically have a narrow scope and arefocused on improving individual processes.Complexity, however, results from the numerous interactionsbetween processes, organization and productsIncreasedcomplexityPoorexecutionLoss ofprocesscontrolPoorbusinessresultsProcesses& peopleare addedto improveVicious Complexity Cycle• Are you in the vicious complexity cycle?– Do you make plans to improve but find yourself unable to executethem because you are firefighting?– Have you invested substantial resources in your process improvementinitiatives but feel like you aren’t getting the results you expected?• Wilson Perumal & Company has a simple, repeatable, systematic process to achieveOperational Excellence and break free of that vicious cycle– Achieves a performance step change in a much shorter timeframe– Requires significantly fewer resources than traditional methods– Is customized to fit your organization
  3. 3. Wilson Perumal & Company, Inc. 3The Operational Excellence Management System (OEMS)provides a simple, systematic process to achieve OEKey ValueDriversFourSources ofRiskCommonCauses ofFailureSpecific KeyControlsOEMSElementsOE is defined bymeasurable businessperformance acrossspecific value driversThere are only foursources of risk for failureto perform against thevalue driversThe four sources of risktend to fail for the samereasons regardless ofthe type of operationSpecific key controlsexist to prevent thesecauses of failuresKey controls areorganized intoElements to facilitateimplementation andmanagementExamplesVision/ProceduresTraining/CertificationPerformance MgmtEngineering DisciplinesPlanning/SchedulingDesign for Six SigmaMOC ProcessCultureOrganization StructureProcess Control PlanFMEAExamplesExpectations don’texistLack of knowledgeWrong incentivesEquipment not capablePersonnel not allocatedProcess not capableMOC inadequateLeadershipEmployee OwnershipRisk IDRisk MitigationTrainingChange ManagementSustainSafetyEnvironmentComplianceQualityProductivityYieldCostPeopleProcessesEquipmentChange
  4. 4. Wilson Perumal & Company, Inc. 4Our integrated approach delivers transformative resultsthroughout the organization with less resources & timeTraditional Approach - Lean & Six Sigma WP&C Approach - Operational ExcellenceObjectives• Focused on individual processes – bottom-up- Eliminate process waste- Reduce cost and lead time- Improve quality• Focused on overall business – top-down• Excellence in execution and control of processes• Address product/service and organizational issuestogether with process performanceTools /Activities• Analysis led approach• Continuous flow, standardized work• Value stream mapping, error proofing, 5S, SPC, DMAIC• Experience-driven insight informed by analysis• OE Framework, Management System, and Key Controls• Focused use of LSS tools for greatest value creationPros• Disciplined and well-known process• Wide variety of tools available• Great results in well-bounded, tightly scoped issues• Transformative results with impact throughout thebusiness• Holistic view drives quick alignment on key issues• Broad-based approach yields dramatic results with fewerresources and less timeCons• Focus on individual processes does not takeorganizational and process interactions in to account –sub-optimization often results• Effort often diluted across multiple bottom-up projects;reductionist & piecemeal approach - can get lost in data• Significant resources and time to address many projects• Not appropriate for single processes or narrowly-scopedissues• High-level of organizational commitment required tochange the way business is doneDrives incremental improvement in tightlyscoped, well-bounded issues of individualprocessesCuts through complex, dynamic process &organizational issues driving transformative results
  5. 5. Wilson Perumal & Company, Inc.We have a track record of delivering dramaticimprovement in operational performanceDoes your operation feel out ofcontrol?Are you unsatisfied with your currentefforts to achieve Operational Excellence?Situation: A leading manufacturer of building productshad a plant that was performing well belowits expectations and industry averages.Productivity had declined by 15% over thepast year.Approach: The 7 Element Operational ExcellenceManagement System was installed, and ourtop-down approach was used to develop anOE Plan in 6 weeks time. We mentored plantleadership and put processes in place toensure successful execution of the plan.Results: • Achieved 380+ days without a recordableinjury• 20%+ increase in productivity in less than 6months• 15%+ increase in production scheduleattainment in less than 2 months• 20%+ increase in maintenance scheduleattainment in less than 2 monthsSituation: A $35B integrated energy company wasstruggling to implement a company wideOperational Excellence Management System,and had gained little traction in more than 2years.Approach: WP&C worked with key leadership to alignthem on a common understanding of OE, therole of the OEMS, and the best approach forachieving it. We redesigned theirimplementation process and helped guideexecution of the OE plan.Results: • Time to implement the OE Plandevelopment process was reduced by morethan 40%, shifting resources from planningactivities, to executing activities that willcreate tangible results• Critical key leaders who had passivelyopposed the implementation are nowactive supporters because they see thevalue being created.
  6. 6. Contact Information:On the Web: www.wilsonperumal.comEmail: contact@wilsonperumal.comTwitter: @Wilson_PerumalLinkedIn: http://linkd.in/10BnH1iUnited States: (972) 716-3930Europe: +44(0)203 206 1496Contact us for more information about our Operational Excellence ManagementSystem and to schedule a workshop for your Leadership TeamWe will customize a workshop to provideyour team with a strong foundation toimplement OEMS:• Alignment on what Operational Excellence(OE) means to your company and the valueit can create• Understanding the OEMS role in achievingOperational Excellence• Step-by-step, practical guidance onimplementing the OEMS• Clarity on Operational Discipline andcultural requirements to achieve OELearn more by following our Operational Excellence Blog at www.wilsonperumal.com/blog
  7. 7. Wilson Perumal & Company, Inc. 7Our team has deep, hands-on operational experienceStephen Wilson, Managing Partner• More than a decade of experience advising senior executives globally on issues relating to cost-competitiveness, operations and strategy• Recognized as a thought-leader on the topics of complexity, cost-reduction, operating models andinnovation; co-author of Waging War on Complexity Costs• MBA from the Wharton School in Strategy and Finance• Deep experience in several industries including manufacturing, consumer goods and retailAndrei Perumal, Managing Partner• Thought leader on complex systems and integrating strategy, operations, and organization• Formerly with George Group Consulting (Engagement Director of the Year) and Bain & Company(winner of Best of Bain Award); co-author of Waging War on Complexity Costs• Developed the Joint Munitions Command Integrated Logistics Strategy for the US Army• Aerospace, nuclear, and chemical engineer; prior aerospace industry experience• BS Aeronautical & Astronautical Engineering, Massachusetts Institute of TechnologyTim Collins, Manager• Strong background in business and operations transformations. Experience includes supply chainmanagement, logistics, manufacturing, sales & marketing, product management and finance• Former senior product manager & plant manager at ABB for it’s pulp & paper automation line• Adjunct Lecturer for Supply Chain Strategy and Operations Management, The Ohio State University• MBA, concentration in Finance, The Ohio State University, BS in Computer Science, NorthwesternUniversity
  8. 8. Wilson Perumal & Company, Inc. 8Our team has deep, hands-on operational experienceBrian Flis, Case Team Leader• Expertise in manufacturing, operational excellence, and LEAN implementation• Developed complexity reduction plan for a U.S. manufacturer; identified cost savings of $140 million• Supplier Quality Manager, Eaton Corp. - Handpicked by Senior VP of Supply Chain, OperationalExcellence and Quality to launch urgent business performance initiatives across the business• Acquisitions Officer, U.S. Air Force - Led process improvement team that successfully increased ballisticmissile booster production from 1 booster a month to 8 boosters a month• MBA, Ohio State University; MS Mech. Engineering; BS Mech. Engineering, U.S. Air Force AcademyChris Seifert, Consultant• Expertise in manufacturing, operational excellence, and management system design andimplementation• Former Operations Leader, Owens Corning (increased plant productivity by 25% in just 9 months)• Former Plant Manager and Manager of Business Strategy & Analysis, George Pacific (Koch Industries)• Top-ranked submarine officer, US Navy (ranked #1 of 9 submarine junior officers)• MBA, Summa Cum Laude, University of Georgia; BS Business Administration, St. Louis UniversitySoundStrategyOperationalExcellenceLeadingPerformance

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