Operations Excellence: When is Continuous Improvement Not Good Enough?

By Kevin Duffy

VP Kepner-Tregoe

Six Sigma, Lean and other Continuous Improvement (CI) programs are found in every manufacturing organization today. In pursuit of incremental performance improvements and elimination waste, CI keeps organizations focused on the path to operational excellence. Yet many programs can fall short of expectations  and even the best Continuous Improvement programs have limitations.

There are a number of specific situations where the incremental CI approach may not be optimal. A more targeted program that focuses resources on a rapid, substantial change is needed to meet the following challenges:

The economy: Sudden and severe economic downturn, requiring immediate operational changes

Sudden success: Market demand increases, requiring immediate increases in throughput/ increased capacity

Commoditization: Zunehmende Kommerzialisierung von Produkten, die Kostensenkungen erfordert, um wettbewerbsfähig zu bleiben

The competition: Increased segment competition, requiring higher quality products to maintain a competitive advantage

Strategy change: Organizationally “self-induced” strategic events (e.g., M&A, stretch goals resulting from strategic imperatives, strategy reformulations, etc.), requiring rapid changes

Urgency: Interner Wunsch nach einer quantitativen Veränderung der Produktionskapazitäten (z. B. die Geschäftsleitung besteht darauf, dass die Kosten um "x" Prozent gesenkt werden, die Ausbeute um "y" Prozent verbessert wird usw.)

To successfully meet the challenges presented by such events requires a process-based approach that helps to identify and bridge specific performance gaps in a way that ensures performance will be sustained within a time scale that meets the needs of the business. A more targeted approach can complement an ongoing CI program by analyzing specific performance gaps to find improvement opportunities demanded in these situations. Once improvement opportunities are identified, a dedicated burst of resources is committed to both achieving and sustaining change.

Rather than leaning on major business process re-engineering projects, IT/ERP implementations or sweeping culture change, certain situations demand targeted actions, and done properly, quickly deliver the necessary results.

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