A transformative experience for
leading a transformation
Giving
senior leaders hands-on, digitally enhanced experience with lean management
helps kick-start a transformation.
Picture a global manufacturing company. It could be in any industry—the essential point is
that it is very good at what it does. It has a long history of innovative
products, and has grown to serve a global customer base.
The company’s leaders
are increasingly concerned, however. Its longstanding competitive advantages
are under threat, as Industry 4.0 technologies
enable entirely new levels of product quality, manufacturing
agility, and on-time delivery performance. Old competitors are catching up, and
new competitors are popping up in all directions. Meanwhile, customer expectations are rising even faster than competitors’
performance.
Rather than wait for
others to take the lead, the company decides to set new standards for itself,
starting now. To do so, the company would need to bring lean management, Six Sigma, and Ops 4.0 together in an
ambitious, enterprise-wide transformation. But the leaders
foresee a gap. Success would, crucially, depend on the engagement and influence of senior managers—only some of whom had fully
embraced the concepts that would make the transformation possible.
Understanding the power of continuous improvement
To its practitioners,
the power of lean management and Six Sigma to continuously improve quality and
productivity is self-evident. Years of frontline experience have shown how root-cause problem solving, careful testing, and relentless elimination of waste and variability continually improve manufacturing performance year
after year. And now, digital tools such as full product traceability, new sensing technologies (e.g.,
computer vision), and advanced analytics are
making traditional lean-management and similar approaches easier and faster to
implement at scale across a business.
Away from the shop
floor, however, these techniques can be harder to understand. But if senior
managers and leaders are to provide the active support and ongoing commitment
that a sustained operational transformation requires, they need to see (and
feel) exactly how lean-management and related methods so dramatically improve
operational efficiency, customer satisfaction, and profitability.
Learning lean and digital by doing lean and digital
Two companies, in
different industries and on opposite sides of the world, illustrate what
organizations can achieve when their senior leaders commit to immersing
themselves in operational excellence. Rather than simply describe
operational-excellence concepts in the abstract in a traditional classroom
setting, these companies sought hands-on experiential learning in a capability
center designed to replicate an actual, digitally enabled working environment.
In one of the manufacturing centers, for example, a production line fabricates
components for refrigerator compressors, with adjoining facilities for
quality-control testing and final assembly.
Over the course of one
and a half days, leaders learn about lean management and related
continuous-improvement principles and techniques, along with the use of
Industry 4.0 technologies to improve product quality. They’re then asked to fix
a typical operational issue on a real shop floor, such as the final product
failing quality tests.
Finding the real reason
requires the leaders to apply the techniques they have just learned. The first
step is a classic “Gemba walk” (a term from Japanese meaning “to go and see the
real place”) to assess the operation’s initial layout, working methods, culture
and management. Next, they use lean-management tools to identify the root
causes of the problems and propose possible solutions. Finally, they test the
effectiveness of their ideas with a rapid transformation—reconfiguring work
stations, adapting processes, and running further manufacturing tests.
The results? One of the
management teams didn’t just fix the quality issues—they also doubled the productivity
of the compressor manufacturing line.
A second exercise
brings the managers through a digital transformation journey, from the
diagnostic phase (in which they learn to see additional digital opportunities,
starting from their business needs) to the design of the use case and its
implementation. Along the way, they learn about innovative digital technologies
ranging from 3-D printing and machine-to-machine communication to in-process
data collection and adaptive standard operating procedures. A digital
dashboard—equipped with a machine-learning engine and connected with the line
in real time—shows the participants how proven root-cause problem solving tools
can reach an entirely new level of effectiveness. By applying those methods on
the production line, the leaders achieve additional quality improvements, and
further increases in productivity.
The outcome: Kick-starting a transformation
For executives, a
capability-center experience provides a compelling introduction to the impact
of transformational change. A senior leader for one of the companies, a
medical-products company based in North America, commented after his company’s
program: “I better understand my role in leading operational excellence—the
tools, the projects, and the mind-sets people need in order to succeed.” The
business-unit head at a European manufacturer, reflecting on what the
organization learned from its sessions, observed: “Customer focus and quality
are essential for us. Having used the tools and methodologies ourselves, we
have much more credibility in helping our teams create a strong quality culture for us.”
Executives who attended
have been quicker and more at ease than their colleagues in applying their new
insights in their own facilities, giving their transformation journeys a
running start in defining improvement priorities in their units and training
their change leaders. After the initial training sessions, the European manufacturer’s
managers have already overseen more than 50 improvement projects across their
operations, reducing quality problems by more than 25 percent and significantly
cutting quality-related costs. At the medical-products company, operational
improvements generated more than $40 million in net value, while quality rose
from an average of 80% across its locations to more than 90%.
By Anika Becker, Alessandro Delfino,
Alessandro Faure Ragani, Ulrich Huber, and Cinzia Lacopeta
https://www.mckinsey.com/business-functions/operations/our-insights/a-transformative-experience-for-leading-a-transformation?cid=other-eml-alt-mip-mck-oth-1806&hlkid=04b76ec1c7d94217af9371c161d2fb8f&hctky=1627601&hdpid=93cfae20-b853-4707-9458-417d0548a67c
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