18 December 2017
Words by Stuart Harman, Partner at Oliver Wight Asia Pacific
To reach Class A performance, companies must employ a business improvement approach that utilises a whole host of improvement methods, including continuous improvement tools, lean methodology, six sigma and agile capability. Elimination of waste and failure will result in increased velocity and cost-efficient agility throughout the business. Integration is the key; an effective IBP process will coordinate all these improvement activities, allowing every employee to relate their own role and responsibilities to the company’s strategic objectives. Inspired by The Oliver Wight Class A Standard for Business Excellence, take a look at this snapshot of how IBP can help your firm drive business improvement for the long-term horizon.
Ongoing competitor analysis and benchmarking across key business processes is crucial in ensuring your business maintains a competitive advantage. Understanding the driving and supporting processes that contribute to business performance and competitive advantage is the starting point. By fully understanding your competitors’ market offering as well as your own, you can properly define and capitalize on your company’s strengths. Similarly by identifying your weaknesses versus your competition you can identify opportunities that should be incorporated into your organization’s integrated improvement plan. As well as looking from the inside out, it is important to evaluate performance from the outside in; external visits, assessments, audits and external research can be used to identify and understand best practices so that targeted levels of performance can be recalibrated and Business Improvement plans put in place to achieve them.
A major challenge facing many organisations is improving customer responsiveness. An effective IBP process will identify where planned and cost-effective agility is required throughout your organisation, and ultimately deliver the promised responsiveness and a competitive edge. This ‘planned agility’ can be used to stimulate or respond quickly to changes in the marketplace without wandering off plan. In addition, your organisation can continue to improve its supply chain responsiveness by using advanced modelling and analytics to drive scenario planning through the IBP process and anticipating marketplace, competitive and demand changes.
Without capturing and disseminating knowledge the business simply cannot improve on a continuous basis. The learnings from the success and failure of each and every business improvement activity should be formally captured and used to further improve business processes; the evolving knowledge database will then enable a greater analytics capability. Knowledge can come from anywhere in the organisation but it must be captured and shared through teams at all levels to ensure employees have the same understanding and apply it in the same way.
Controlling and protecting your business equipment is essential. In the best companies, the ownership of all assets is clear, and they are subject to regular auditing to confirm existence, operational status and inclusion in financial records. Planned maintenance programmes with an 18 to 24-month horizon are strictly adhered to and the use of reliability-centred maintenance techniques and TPM, (Total Productive Maintenance) for key assets, ensures that overall equipment effectiveness (OEE) can be measured and continuously improved.
Business Transformation Programmes will ensure step-change improvement is driven throughout the whole organisation and these programmes should be proactively identified through innovative thinking and execution. The leadership team should take responsibility for identifying transformational opportunities that will support the strategic plan of the business and should ensure that resources are made available to carry them out, and progress is reviewed through the IBP process. In terms of creative thinking, all areas of the business should be encouraged to contribute ideas and a formal process should be put in place to establish their viability and potential impact on the business.
Ultimately for business improvement to be sustained, there must be a passion for it across all levels. Business leaders need to light the way, it is vital they recognise that people are the key drivers and that success depends on the organisation’s ability to cultivate the right environment for change. To inspire the workforce, leadership must continuously articulate the ambition to be the best within its chosen proposition. Milestones are used to stage the change process, and everyone, from the top down to the bottom, will understand the need for business excellence. “Good” is the most dangerous enemy of “great” but while leadership should continuously seek new opportunities to set higher targets and goals to achieve endless improvement, equal emphasis must be given to reward and recognition.
Partner, Oliver Wight International
Stuart is based in Sydney, Australia but has spent 20 years working in key change agent roles in major manufacturing organisations around the world. Whilst gaining deep knowledge in a number of industries including metals and FMCG he has developed extensive experience in improving and linking processes across organisations and supply chains to enable the successful deployment of strategy.