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Op Ex Review 0812

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Op Ex Review 0812

  1. 1. August 2012 | Issue 3 OpEx Review A TBM Consulting Group Publication Pactiv’s Perfect Engine: Turning Improved Productivity into Cash and GrowthPactiv’s CI journey is Many lean companies Far from running out of “The company went from describe their continuous steam, Pactiv’s 12,000 being capital-orientedless like the colloquial, improvement efforts as long, employees get stronger as the to being working-capitalambling lean journey purposeful journeys down race continues. From 2007 oriented — it’s gone fromand more like a cross- a never-ending road. This to 2011, the company grew worrying about productivitycountry relay race with hasn’t been the case at food- revenues by more than $1.6 to worrying about cash,”no finish line.   packaging giant Pactiv. Since billion through acquisitions said TBM Consultant, Glenn its first kaizen event in the funded by freed up cash. In Kubisiak, who worked at food service segment in April 2010 alone, employees at one of Pactiv’s Hefty plants 2007, Pactiv has pursued Pactiv’s 55 sites collectively in 2007 and 2008. “That’s a a CI strategy more like a freed up $250 million in cash whole different attitude as far cross-country relay race with and drew the attention of as running the company.” no finish line: Train, stick to Auckland private-investment the path, execute the crucial company, Rank Group, hand-offs, and if the weather which purchased it in 2011. (continued on page 4) changes suddenly—don’t get distracted—keep moving and push harder than you think ALSO IN THIS ISSUE: you can. 2| Leadership: Seaman Co-President John Crum “I ask for 130 percent of 6| Maintenance: A TPM system approach goal,” says Greg Noethlich, formerly Pactiv’s VP of 8| Case Study: Quality improvement for medical implants Operations and now President 10| Strategy: Beyond operational excellence at Apple of Prestone, a sister company. www.tbmcg.com
  2. 2. Leading Thoughts Leadership Insights – Q&A OpEx Review 2012 Perfect Engine August 2012 | Issue 3 Award Co-Winner: Alignment Feeds Pactiv’s Success When I made my first visit to Pactiv Seaman Corporation in 2006, it was made clear to me Seaman Co-President John Crum shares that this would be the company’s last attempt to make lean work. They had his insights on the coated fabric company’s tried two other times, and TBM would ongoing pursuit of operational excellence. have the last at bat. Fortunately, we became a team, and After six years, how ingrained is Seaman’s together we hit a home run. LeanSigma® program?Today, Pactiv is applying operational excellence across the Participation is driven from the top to the bottom.enterprise to improve profitability, asset utilization, supplier Approximately 90% of our associates participate inperformance, and to successfully integrate new products into LeanSigma events, including the senior management.its manufacturing processes. It’s all about leading by example. Our owner andThe organization continuously achieves best-in-class CEO, Dick Seaman, constantly reminds our associatesperformance because of this effort. Pactiv’s results include: of the gains that we’ve made and that this is an• 38 percent EBITDA improvement in just one year ongoing journey• 8 percent reduction in plant conversion costs • 11 percent improvement in productivity To address the quality issues I understand that• 12.6 percent improvement in sales per employee you started with standard work and shortening since 2009. changeover times to reduce lot sizes. When did you start to focus on inventory?Performance has earned Pactiv TBM’s The Perfect EngineAward for operational excellence this year, along with Seaman We deliberately decided to build our LeanSigmaCorp., which also is using the LeanSigma® approach as part capability first, before tackling our inventory. A lot ofof a strategic roadmap for value creation and growth. companies start by reducing inventory to get the cashI’m still involved in Pactiv’s LeanSigma work, and two men flow impact right out of the gate, and it actually makeshave provided a common thread during the six years of the sales force and the customer cringe. We made sureincredible change: John T. McGrath, now Pactiv CEO but we had quality processes in place, and had reducedformerly VP of Sales, and Kevin Quinn, VP of Manufacturingand Engineering. Their cooperative work is a testament tohow crucial alignment is to achieving success through lean. About Seaman Corp.From the beginning they had a unified vision: One invoice.One order. One truck. Today, that vision has become one Headquartered in Wooster, Ohio, Seamanof a company that can achieve exceptional growth with Corporation has two additional productionremarkable efficiency. In other words, a perfect engine. facilities in Bristol, Tenn. using advanced weaving and coating technology. The plants manufacture coated fabrics for commercial roof systems, architectural structures, geomembrane liners, truck tarps,Dan Sullivan is Executive Vice President of TBM. and many other applications. Founded inHe can be reached at dsullivan@tbmcg.com. 1949, the privately held company employs approximately 310 people. Send OpEx newsletter feedback and story ideas to opex@tbmcg.com. 2 | OpEx Review | August 2012 | www.tbmcg.com
  3. 3. Leadership Insights – QA, continued 20 percent and, because of the cross-training and the standard work and how we do things here, we can take that in stride. It’s not a big deal. We have really created a lot of flexibility and agility in our business. We’ve also been able to reinvest in new capabilities. We recently made a $5 million capital equipment investment. Some of that money comes from our LeanSigma savings. When we put in the new equipment, we didn’t have to build a new building because we had freed up enough space in our existing operations. In addition, using TBM’s 2P process, we were able to optimize the design of the equipment so that it will not only produce a superior product, but have a highly efficient operation. Culturally, is there anything about being a private, family-owned company that has made the LeanSigma implementation easier or more difficult?our changeover times, from four hours to one hour in Our owner, Richard Seaman, has always been progressivesome cases. Once people saw that we could produce in his approach to the business. Dick has always hadand deliver any order within a week, they realized tremendous passion for innovative ideas for both products and processes. Once Dick Seaman startedthat we didn’t need six or eight weeks of supply. Then, seeing results and fully understood the process, hewith the support of sales, we’ve been able to increase our pressed us to institutionalize the LeanSigma principlesannual finished good turns from 4 turns to 11 turns. as part of our culture.Can you describe what your quality and Due to the family culture here everyone is engaged inproductivity improvements, and enhanced the business. It’s like having 300 owners. They all wantresponsiveness to customers, have enabled to see the business do well. I think we are a “Can Do”Seaman to achieve in your markets? company. We are not a company that resists change. TheOur quality and productivity improvements have people here are willing to stretch and to reinvent thingsallowed us to remain competitive in the industrial fabrics and commit to breakthrough performance versus justand roofing industry. The raw materials for industrial being satisfied with small, incremental changes.fabrics come from petro-chemicals. As I’m sure youknow, chemicals have had significant raw material priceincreases over the last couple of years. Our LeanSigma For more information about the early years of the company’scost improvements have allowed us to partially outset LeanSigma journey, see the case study, “Seaman Corporationmany of the raw material cost increases. Is On the Transformation Fast Track,” at tbmcg.com. As part of our recognition of the TBM 2012 Perfect Engine AwardBecause of our fast response times, we’re able to deliver co-winners, we will feature an updated report on Seaman’sour product to customers faster, driving the top line LeanSigma efforts in the next issue of OpEx.by getting new customers, while maintaining our high John Crum was interviewed by businessmarket share. With our LeanSigma environment, we journalist David Drickhamer.can flex our capacity quickly. Our demand can fluctuate OpEx Review | August 2012 | www.tbmcg.com | 3
  4. 4. Pactiv’s Perfect Engine, continued from page 1 teams were able to improve productivity beyond the 2005 level by November. CI efforts at other plants in Frankfurt, Ill., and elsewhere, produced similar results. The CI work that year and into 2008 focused on manufacturing, involved much one-on-one teaching about how to identify waste, and laid the foundation for what would later become the Pactiv Production System. Largely, it was about learning to see waste where no one could see it before. “We talked about vibrancy, we talked about 5S, and we talked about some of the fundamentals of lean,” says Mike Hatto, a TBM consultant who worked with the Canandaigua teams. “Within a week’s time we put in place a plan to do one kaizen event a month.” Before the year ended, the kaizens at Canandaigua and other plants had Greg Noethlich, President, Prestone; Kevin Quinn, Vice President of Manufacturing and Engineering, demonstrated significant opportunity Pactiv Corporation; and Anand Sharma, Chairman CEO, TBM Consulting Group, Inc. for improved productivity and decreased costs. For example, in the Pactiv has sustained and expanded CI 2007: Laying The Foundation thermoforming area at Canandaigua, gains using workbooks that are the cases produced per man-hour Pactiv’s lean relay had a traditional increased 67 percent post-kaizen, and outcome of annual strategy deployment start. The company’s Canandaigua, planning and are used by four levels throughput per machine-hour improved N.Y., thermoforming plant wanted to 25 percent. At Frankfurt, kaizen of the company—each with its own reverse a trend of lagging productivity, workbook designed for that level— teams demonstrated an 83 percent which started in 2005. Using traditional improvement in machine setup time. to guide and document daily CI assessment of the plant followed by a work. Company leaders provide the series of rapid-improvement events, workbooks and ample war room space for supervisors, managers and teams to use to choose, plan and implement CI projects that enable the sites to Pactiv Acquisitions 2002-2011 meet financial goals set during Year Company Revenue ($ millions) No. of Plants strategy deployment. 2002 Winkler Forming 120 3 Getting to this stage took time, though, 2003 Jaguar (Mexico) 95 1 to train and hone lean fundamentals. 2003 Rock Tenn 60 2 2005 Newspring 110 2 “Throughout all the different endeavors, 2007 Prairie Packaging 500 4 the bottom line kept improving because 2010 Reynolds 520 6 the fundamentals were there,” Kubisiak 2010 PWP 175 4 said. “As far as sustainment goes, once 2011 Dopaco 465 6 you educate people, they look at $2,045 28 things differently.”4 | OpEx Review | August 2012 | www.tbmcg.com
  5. 5. Pactiv’s Perfect Engine, continuedWhile the results of these and the The Process – Strategy Deploymentother front-line improvements wereimpressive, Pactiv leaders knew that LEVEL I Growththey couldn’t stop there. Enterprise- • E xecutive Team (AIP) Productivitywide problems that could block growth • S WOT Analysis Talent Managementpotential persisted: • A nnual Improvement Priorities• lants were working independently, P • M onthly Update Countermeasures without networked strategic alignment. LEVEL II MANUFACTURING• uccess stories were insular, S • V alue Streams ENGINEERING MARKETING and progress spotty. • S WOT Analysis LOGISTICS/PIC FINANCE • B ottom-up Plan Development• ustaining gains was tenuous. S • A nnual Improvement Priorities (AIP)• I work was not clearly tied C • M onthly Update Countermeasures to the corporate bottom line. LEVEL III/IV“There was also a dawning awareness that • lants, Warehouses, Sales Teams Pthey were going about this in a disjointed • orkbooks – Specific Projects – Time Bound Weffort and so weren’t leveraging what they • onthly Update M Countermeasurescould,” Hatto says. According to Hatto and Kubisiak, they Kubisiak says. “When other companies2008: Value Streams Elevate installed the system by introducing it were doing badly, Pactiv was out buyingLearning, CI Work to multiple plants within a value stream its competition. In 2008 they were notThis drove Pactiv leaders to start with a single event at one plant. In the even acknowledging that there was aorganizing work by product line so they foam value stream, for example, three to recession. There’s no question that theweren’t duplicating efforts: Building five people from each of the sites would work they did in those years helpedon the knowledge the company gained come for a kaizen event at one plant, them to make important acquisitions.”in 2007, Pactiv reorganized into value and then would set up a calendar withstreams in 2008. the regional CI leaders for each plant to 2010–11: Strategy Deployment conduct a replication event because they Improves Alignment, PerformancePart of the reorganization was all have similar equipment and processes.building the early company-wide As Pactiv grew through acquisition,CI infrastructure, which included CI leaders gave each plant time-specific the need to replicate its processes andcorporate-level regional CI leaders and performance goals scaled up to the practices became a critical need, aswidening deployment of the Pactiv kaizen-demonstrated capabilities. About did the need to do a better job ofProduction System, the company’s a month later, CI leaders would audit sustaining gains and tracking progressunique interpretation of lean systems the project to make sure the team was toward high-level strategic goals. Themanagement. using PPS standard work and tracking time had come to introduce strategy to meet expectations. deployment, and this is when Pactiv “ hen other companies were W As this was happening, the Pactiv CI leaders created the four-level approach effort was being elevated to the systems to achieve alignment. doing badly, Pactiv was out and philosophy level, and knowledge Today, lean CI is embedded in the buying its competition. In was rapidly building throughout company’s go-forward strategy, although 2008 they were not even the organization. with an increased emphasis on wringing acknowledging that there out costs and freeing up cash. Additionally, as more costs were taken was a recession.” out of the business, the company had Editor’s Note: Pactiv and Seaman Corp. — ­ Glenn Kubisiak, more cash for acquisitions and to weather each received TBM Consulting Group’s TBM Consultant the 2008 and 2009 global recession. Perfect Engine Award in June 2012. “All of the work that we were doing See page 2 for an interview with with them was allowing them to buy Seaman Co-President John Crum. other companies during the recession,” OpEx Review | August 2012 | www.tbmcg.com | 5
  6. 6. Management BriefingTPM: Achieving Maintenance Excellence8 Steps to Better Equipment Reliability,More Capacity and Sustained ImprovementBy Doug KissYou’ve launched your continuousimprovement (CI) initiative. Productlines have replaced process villages.There’s more floor space. Supervisorsand executives are closer to the gembaafter experiencing 5S, visual factoryand managing for daily improvement.Standard work has made abnormalitiesmore visible, and Six Sigmamethodology has corrected problemsthat have plagued the operationfor years.The results are showing on the bottomline, and Accounting has credited yourCI effort as a large contributor. Fair Equipment-Maintenance workarounds and special tricks andskies and smooth sailing, right? Well, Challenges tools to limp things along. Some ofpartially right. Momentum like this— these are good ideas but are seldomeffectiveness like this—needs growth Let’s look at equipment-maintenance shared as best practices.to sustain. challenges that are common among manufacturers and cause problems such • omputerized Maintenance CBut many organizations are hesitating as downtime, reduced speed, product Management Systems often are notto make investments needed for yield and the unknown costs/availability in place or poorly used. No usefulgrowth. Often the roadblock is of parts and time associated with data is available quickly—equipmentfinding, preserving and expanding restoration of lost capacity: history or spare parts inventory/cost.manufacturing capacity. Good data and history are essential • usterity has forced a general A for making good decisions aboutThe tenuous global economy has held degradation of equipment condition modifying preventive maintenance,back some capital investment, but some in the past decade. The maintenance stocking or ordering spare parts, andcompany leaders could also be cautious skills base has eroded due to attrition, upgrading or purchasing equipment.because they have been dissatisfied with a decline of technical school graduateequipment lifespan and/or lifecycle availability, and a tendency among • aintenance and Production don’t Mcosts despite using Total Productive companies to drop maintenance partner and share ownership of theMaintenance (TPM) as part of an mentoring/apprenticeships. equipment. If maintenance skillsoperational excellence program. Maintenance departments often are below par and spare parts are lack basic and specific skills, and not tracked or managed, preventiveIf TPM did not produce results few have taken the time to quantify maintenance likely takes too longor sustainment at your company, the gap, let alone plan to bridge it. and causes significant equipmentperhaps it was because you took a downtime. The other result is thattools approach rather than a systems • roduction departments are focused P everyone sees that Production doesapproach. Instead of being viewed as a only on “making the numbers.” Basic not value equipment maintenance.fixit (or fixit-prevention) measure, TPM daily care and equipment monitoringshould become the foundation of a are not performed by the person A TPM event is a start to fix problems.larger maintenance vision that supports who is operating or tending the However, a long-term plan is needed tostrategic high-level goals. equipment. We find operators using create manufacturing capacity necessary for growth.6 | OpEx Review | August 2012 | www.tbmcg.com
  7. 7. Management Briefing, continuedThe benefits of TBM’s system approachto TPM are that you create a roadmap Creating TPM Systems for Long-Term Benefitsof what needs to be done and so havea vehicle for enhancements, course TPM events often don’t show is the enormity of the scope—andcorrections and communication; know payback or sustain because they are therefore the scarcity of—resourceshow you are going to do it; and know one-offs: The systems that support to get the work done. Using ahow to measure the effects and returns. the equipment effectiveness are not criticality matrix and numerical put into place; the measures that scoring criteria, we take theAny lean organization could find itself support the effort are not created; or “emotional noise” out of theup against equipment effectiveness and the wrong measures are forced. identification and let the data tellmachine capacity as a barrier to bringing us what equipment is truly critical.the benefits of operational excellence to TBM’s methodology for helpingbear. This may be the result of less-than- clients move beyond the TPM “tool” 4. etermining the condition of each Dsuccessful efforts in the past or simply stage to the systems stage includes piece of critical equipment.the last part of the puzzle to be put these eight steps: Looking at each sub-systemtogether. In either case, it’s important on the equipment (hydraulics,to understand that the end goal is not 1. nowing the current state. K pneumatics, controls, etc.), weTPM, but maintenance excellence. We start by examining the can code the condition based on production floor, the maintenance the current state. This not only department(s) and the equipment. helps with the planning of TPM Area owners and operators provide improvement events, but also input for an assessment, which helps organizations plan and is a systems view of where the prioritize upgrades, overhauls, factory is from a standpoint of rebuilds and purchases. maintenance excellence. We use a progression benchmark, often 5. onducting a maintenance skills C in the structure of bronze/silver/ assessment, implementing a gold to determine the level of lean skills matrix. Gaps in skills must progression. The output provides be addressed. The first step is to parameters for priority and scope, identify what basic skills are in as well as a solid reference in need of enhancement and what structuring a get-well plan. machine/process-specific expertise needs to be upgraded. 2. stablishing a steering committee E or ownership structure. While 6. reating a communications C TPM can be described as a plan and determining initial “bottom-up” effort (meaning metrics/measures. It is necessary without support from the top), that both maintenance and it still requires a team to set goals production organizations knowDoug Kiss is a Senior Management and identify good measures for full the why/how/when, and thatConsultant at TBM. He can be implementation and sustainment. changes are in store.reached at dkiss@tbmcg.com. These are set as the organization establishes a “maintenance vision.” 7. rioritizing and planning PThis Management Briefing has been workshops/events/training.modified for OpEx. For the complete 3. dentifying critical equipment. I One of the causes of less-than- 8. mplementing, assessing Iversion, go to the Resource Center at optimum TPM implementation and improving.www.tbmcg.com. OpEx Review | August 2012 | www.tbmcg.com | 7
  8. 8. Case StudyProactive Defect Resolution: Medical Device Maker AvoidsShutdown, Achieves Full FDA Clearance with No FailuresA basic tool continuous-improvement teams use to discover“hidden” quality problems is process mapping. Often, theroot causes of long-entrenched problems become so obviousduring mapping that it stuns and—well—embarrasses thosewho’ve been overlooking the problems day in and day out.But when the product is a highly engineered implantablemedical device with an extremely complex supply chain(multiple lots of raw materials) and production processes(both process and discrete manufacturing; and a highfrequency of production-machinery component changes),the sources of defects are not as obvious and can takemonths to identify.This was the case with a TBM client company that makesimplanted medical devices.Despite the inherent complexities of the product andproduction processes, a CI team was able to identify thesources of the defects using common LeanSigma mappingand statistical tools, and the company resolved the problemsand returned to full production with full clearance from theFDA and no reported failures in the field. During the subsequent multi-month process, two uniqueIn-house researchers had discovered one defect during design- challenges presented themselves. First, the inspection methodof-experiments testing on an unrelated product-design issue. that had identified the surface irregularity had never beenThe researchers discovered that during implant, a crack would used before, and team members believed that the irregularityform in the device. The team tested several more devices and was not a “new” defect, but simply one that had never beenobserved the same outcome. noticed before. Once the defect became apparent, though, it was impossible to “un notice” it to try to replicate previousDuring these tests, the researchers uncovered a second inspection techniques. A second challenge was that althoughpreviously unnoticed defect—a surface irregularity. the defect rate was extremely low, many of the expensiveUltimately, the team concluded that the surface irregularity units had to be deployed for testing while production—andwas cosmetic and did not affect product performance or hence sales—were suspended. So financial considerations putpatient experience; however, the company’s high quality additional pressure on the team to resolve the issue as quicklystandards required correction. and efficiently as possible.The crack defect could have been more problematic: Had any Testing of process-related variables was an obvious path todefective devices been shipped and discovered as defective pursue for root-cause analysis. But because it was not knownafter a surgery, a surgeon would have had to remove the how long the defects had existed before they were detected,defective device and replace it. This additional surgery could and because of the high number of variables, parameters forcause scarring and other complications for patients. testing (where to begin and which changes to consider) were not obvious.The company expanded the investigation to include bothdefects after already suspending production and partnering with According to TBM Senior Management Consultant, BethTBM to facilitate a kaizen to find the root causes of the crack. Morrison, the team started with a simple process-mapping8 | OpEx Review | August 2012 | www.tbmcg.com
  9. 9. Case Study, continuedactivity that ultimately provided invaluable insight into been an ‘aha’ tool, but it did make visible to everyone howwhich variables to consider, where to focus experimentation, changes that had been considered small could potentiallyand how seemingly small changes were having a big impact have a major impact on production performance, especiallyon processes. “We drew a chart on the wall that showed in combination with other changes.”successful past production leading into when the defect wasdetected, and then started writing on the wall—to scale— With insight from the timeline, the team conductedall of the things that had changed over time.” research to see if there was some combination of parts and materials that had led to the defects. Additionally, the team conducted experiments on different ways of using the device in the field, i.e., how it would be implanted, as well as changes to how the device’s “ timeline may not have been an ‘aha’ The materials were manufactured. tool, but it did make visible to everyone how The team also tested inspection methods for consistency changes that had been considered small using standard measurement systems analysis tools could potentially have a major impact on (attribute agreement analysis and expert re-inspection production performance, especially in techniques). Also important was the use of the external resources (SEM technology) to validate what the internal combination with other changes.” team had found. The problem-solving tools the team used led to discovering the root causes of both defects. Both of these issues were corrected, one defect being addressed through an improved assemblyAs team members gathered information for each research method and the other through a new finishing method.assignment (i.e., When did we change the raw materialslots? When did the new lots go into production? When didwe change the lots of the device-application tool? Whendid we put in a new water-filtration system? When didwe start a new cleaning procedure?), all of the activity—regardless of who performed the assignment—wasdocumented and made visible to the team.The resulting timeline stood 30 inches tall, 10 feet long andcovered about 18 months of process changes. At first, ithung in a conference room, but someone had been given thejob of capturing it electronically, so it was moved from theconference room out into the hall so the person could workon it without disturbing people in the conference room.This serendipitous move elevated the timeline from a simplekaizen-team mapping tool to a method of providing deeperand wider visibility into end-to-end manufacturing processes.“Other people in the company—not just those on theteam—were also able to comment on things that hadchanged,” Morrison said. “The timeline may not have OpEx Review | August 2012 | www.tbmcg.com | 9
  10. 10. Strategic VisionAs Apple’s Success Attests, Operational ExcellenceIsn’t Everything, But It Is EssentialBy Anand SharmaOperational excellence isn’t everything. Strategic GrowthYou might be surprised to hear sucha statement coming from me. After Strategic Growthall, for more than two decades nowwe’ve helped clients become more Modeloperationally effective—by manyorders of magnitude—and achievevastly superior financial performance. Disciplined ExecutionBut operational excellence is only onepath to superior market performance.Another path is probably best illustratedby a company that’s never far from Operational Valuetoday’s business headlines: Apple. Excellence InnovationThe death of Apple’s co-founder and LeadershipCEO, Steve Jobs, and release of hisbiography last year gave business ownersand managers many opportunities toreflect on the life and accomplishmentsof an incredible business leader. Jobs’remarkable and successful resurrectionof Apple can’t help but make us thinkabout the performance potential of ourown companies, and the legacy that wewant to leave behind.Very secretive on the supply chainside of its business, Apple isn’t knownfor operational excellence or leanproduction methods, mostly because Organizational Mission Core Valuesit subcontracts manufacturingand assembly of its products andcomponents. Still, it repeatedly managesto meet dramatic demand spikes with subject of endless fascination. Still, Connect that which youevery new product launch. But from a there are elements of its value-creation VALUE to that which you DOvalue perspective—as in recognizing, model that other business leaders The mission and core values of ancreating and providing value that its can learn from and build upon. organization empower people bycustomers are willing to pay for, a.k.a., The Strategic Growth Model that defining behaviors and clarifying rules ofinnovation—very few companies in I will explore here begins with an engagement. Our core values at TBM—history have been so successful. organization’s mission and core values, which I won’t recite here—reflect our and combines operational excellence focus on providing clear economicIf it were easy to replicate Apple’s with value innovation through value to our customers and treating oursuccess, the company wouldn’t be a disciplined execution. employees with the utmost respect.10 | OpEx Review | August 2012 | www.tbmcg.com
  11. 11. Strategic Vision, continued • hat factors could be raised well W countermeasures when expectations Apple’s Core Values beyond the industry standard? are not being met, and hold people Connect to Leaders, accountable. It incorporates buy-in from • hat services could be created that W your leadership team and makes everyone Employees and Consumers the industry has never offered? focus on the most important areas for the “ e believe that people with W future of the organization. The mindset of the leadership team must passion can change the world for also change. You have to think less about the better... And that those people Watering the Soil your customers as companies that buy The final component of the strategic who are crazy enough to think your products, and more as people who growth model is leadership. The they can change the world, are the you want to help be more successful. business leaders who I have worked ones who actually do.” Think less about building on what you’ve with personally share some common —Steve Jobs,1997 always done, and more about what personality characteristics. They are great could be done. Think less about current communicators who can clearly convey industry conditions, and more about their vision for the future. They realize how those conditions can be shaped and we have two ears and one mouth for aA company’s mission and values should transformed. Think less about doingmake it clear for everyone what is reason, and therefore prize the inputs of more with less, and more about doing others. They are zealots whose passion isexpected and accepted. Ideally, for such something that’s never been done before.values to have resonance, they will contagious and who can be deliberatelyconnect personally with leadership, A Vision Without unsettling when necessary in order toemployees and customers. Of course, release pent-up creativity. Finally, they a Plan Is a Dreammanagement behavior and decisions are servants who derive their greatest The loftiest and most visionary strategymust always reflect the company’s values. satisfaction from putting their skills, means nothing if it can’t be executed. position and experience in service to others. According to one research study, onlyBecome a Market Maker half of companies report some success In closing I’d like to leave you with twoTo avoid becoming a commodity executing their strategic plans, and questions to consider. What do you needproducer, manufacturers must regularly only one out of three report significant to be “more of ” or “less of ” as a leaderdevelop and offer forward leaps in success when it comes to execution. to transform your business for strategiccustomer value. By gathering relevant growth? And, how do you want to becustomer insights and unarticulated The Japanese quality expert, Ryuji remembered? This strategic growthneeds, and applying proven analytical Fukuda, noted that most business model can help get you there.tools, companies can uncover new, strategies and transformations failexclusive knowledge about their markets primarily because of a lack of direction,and customers. Following this value resources, time and cooperation. He This article is based oninnovation approach, they can then created the X-matrix to monitor and TBM President andtranslate this knowledge into unique address such issues as part of the strategy CEO Anand Sharma’sproducts and services. deployment framework. The strategy leadership presentation deployment process makes it possible at the TBM ExecutiveFor example, consider the key for managers to align an organization’s Exchange in June 2012.competitive issues and factors in your energy at all levels, implementmarkets. Do the answers to any of thefollowing questions reveal any new Blue Oceans: The Value Innovation Metaphorpaths to customer value? If a company limits its innovation efforts to increments of what already exists, trying• hat product or service factors that W to outperform rivals to grab a bigger share of the market, it’s swimming in waters the industry takes for granted can be bloodied by competition, a red ocean. But if your company can identify an eliminated? unfulfilled need and respond with a unique solution, it creates its own blue ocean free of competition where demand is created rather than fought over.• hat factors could be reduced well W below the industry standard? — Paraphrased from Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne, 2005 OpEx Review | August 2012 | www.tbmcg.com | 11
  12. 12. Updates and EventsNew TBM VP to Focus on Growing Drug, Medical Device Markets Continuing the application of traditional lean As a TBM leader, much of his focus will TBM’s tradition manufacturing methods, but to help be on new-product development, which of fostering those industries understand that he sees as the greatest opportunity for mutual education operational excellence can accelerate operational excellence in these industries. through its client time-to-market for new healthcare relationships, Mark products and speed the achievement “The cycle of both drug discovery and Pope has stepped of firms’ internal goals.” drug development on the pharmaceutical into the role of side of the house is extensive. TheVice President for the Pharmaceutical Prior to joining TBM, Pope was the average drug takes eight to 10 yearsand Medical Products Practice. These Vice President of Business Excellence from the time the new molecular entityindustries will explode over the next for Pfizer Pharmaceuticals. He led is developed through human clinical30 years, as developing countries grow an internal consulting group of 30- trials, and the registration processes witheconomically and healthcare spending plus people focused on operational regulatory authorities. Devices have ain industrialized nations tilts drastically improvement within Pfizer’s global shorter cycle than drugs, but have a lottoward older citizens with more operations focused on material revenue of room for improvement as well.healthcare needs. increases, new capabilities development and cost efficiency. In two years, his “Compressing these cycle times and“My goal is to help TBM serve leadership delivered $200 million in bringing new technology to the market forpharmaceutical and medical incremental revenue and $1 billion in the betterment of the disease state and theproducts markets not only through SGA cost reductions. human experience is absolutely critical.” AIM for OPERATIONAL EXCELLENCE Publisher: Anand Sharma: asharma@tbmcg.com ® Executive Editor: Angela Scenna: ascenna@tbmcg.com September 19–20, 2012 • Atlanta, GA Three OpEx tracks: Contributors: Growth, Leading Change David Drickhamer, Doug Kiss, Beth Morrison, Mark Pope, and Improving Profitability. Angela Scenna, Anand Sharma, Dan Sullivan, Tonya Vinas Art Direction and Design: Crossbow Group, crossbowgroup.com Accelerate value creation and master new OpEx Printing: strategies at this year’s Carter Printing Graphics, Inc., carterprintingnc.com LeanSigma® Global Summit. Visit www.LeanSigmaGlobalSummit.com OpEx Review is a publication of TBM, the TBM logo, and LeanSigma® are registered TBM Consulting Group trademarks of TBM Consulting Group, Inc. 4400 Ben Franklin Boulevard Durham, North Carolina 27704 Find us on Our Blog 800.438.5535 www.tbmcg.com12 OpEx Review | August 2012 | www.tbmcg.com

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