| Part 2: Derailing
Your Continuous Improvement Program |
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Many companies undertake continuous improvement (CI) initiatives to streamline their operations. Yet, the road to Lean and the Six Sigma way is littered with companies that were tripped up in the implementation of these various programs. This series will examine the most common reasons companies fail with their CI initiatives and how you can avoid these mistakes.
Reason: Focus on Everything
Once you have a continuous improvement program in place, you must link those efforts to the overall business strategy. Then, the leadership must prioritize those efforts. While this may sound simplistic, it's not uncommon for companies to overload people with multiple initiatives. One manufacturer had 78 key strategic initiatives and five people spending 10 to 15 percent of their time on projects linked to those initiatives. It was no surprise that after a year, the company failed to make much progress on those 78 initiatives.
Your continuous improvement efforts will be much more successful if, after linking them to your business strategy, you prioritize them. Select the top three and assign sufficient resources to those projects. Let's face it, if someone only spends 10 to 15 percent of their time on an initiative, it can't be very strategic. |
| Operations Strategy
Consulting, LLC |
Megan E. Burns
Managing Director Visit Us Online
Ph: 814-397-3420 |
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Greetings!
According to a recent survey by Crowe Horwath LLP and Industry Week Custom Research, 70% of manufacturers are concerned about the rising cost of raw materials. The ability to attract and retain skilled employees and foreign competition round out the top three issues at 47% and 44% respectively.
In this issue of The Manufacturer's Edge we will highlight what you can do about rising costs that cut into your profitability. For tips on the coming labor crunch, read my article in the August newsletter. Finally, we continue our series on the top reasons continuous improvement efforts fail and how to avoid those pitfalls.
Here's to your competitive edge!
Megan E. Burns
Operations Strategy Consulting
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Cut Your Lean/Six Sigma Initiatives?
Let's face it, the economic world we knew has changed dramatically, and possibly for a very long time. Companies are facing a drop in sales and rising raw material costs. Add to this the tightening of credit and companies can be struggling with their cash flow. What's an executive to do?
Traditionally, when companies face economic belt-tightening, continuous improvement efforts, such as lean and Six Sigma, are first on the chopping block. Yet, this is exactly the time when leaders need to be building stronger better organizations. You were facing painful operating problems before and these problems will become even more painful if you don't work to solve them. Companies either need to do something now or be buried by their competitos who are.
World-class industry leaders buckle-down and use difficult times to find all those hidden and non-people wastes in their processes. Recent industry data indicate that workers spend 34.3% of their time on unproductive activities. These leading companies actually become more aggressive in their lean or Six Sigma initiative because they see it as a key enabler to reducing costs, improving quality, and growing their market share.
This becomes even more important when you view your business on a global scale. The 2008 Global Productivity Report by Proudfoot Consulting indicates that manufacturing companies expect to leave 27% of unrealized productivity gains on the table. The countries making the greatest strides in capturing productivity gains are China (88.2% of potential gains achieved), Russia (87.8%), India (85.9%), and Brazil (84.8%).
Again, what is an executive to do? Focus your efforts and your team on identifying all those hidden (and not-so-hidden) wastes and eliminating them. Continue to train your team and work on improvement projects. When your competitors are reacting out of fear, be proactive and act out of wisdom.
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Monthly Tool Tip -
Measurement Variation
When you begin solving a problem don't forget to validate your measurement system. Use a Gage R&R to ensure your defects are true and not due to repeatability or reproducibility error. By eliminating these two measurement errors, you can be confident in your measurements and the decisions you base on them.
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In our next issue, I'll cover various grant options you can tap into to support your training and project goals. Remember, as you face this new economic world, seize the day and go on the offensive with your business. Don't get caught up in fear, instead capitalize on the opportunity to make your business stronger.
Sincerely,
Operations Strategy Consulting, LLC |
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