Published May 18, 2016 This content is archived.
Data and metrics and analysis, oh my!
The land of continuous improvement (CI) – with its array of techniques and tools – can easily produce a dizzying and daunting effect. For the novice who may be inclined to turn the other way, TCIE’s Operational Excellence Director Peter Baumgartner gets down to the basics and explains CI from a bird’s-eye view.
Baumgartner speaks from his experiences in CI consulting, training and content development, and implementing solutions. As a Certified Lean Six Sigma Master Black Belt, he has delivered substantial, validated hard and soft savings across varying industries, including finance, insurance, manufacturing and more.
Question: How do you define CI?
Baumgartner: I define it as making things better – always. It’s not just about broken processes that have a lot of defects or errors, or take a lot of time. Any process, no matter how it’s functioning, can always be improved.
Question: Does CI have a place in every organization?
Baumgartner: Organizations like Toyota have been practicing it since the mid to late 1950s. It’s really easy to understand processes since you can observe them physically. That’s where the concept certainly started, but since then it’s been proven that CI works in all different kinds of industries in addition to manufacturing – at non-profits, in banking, in insurance. Right now, the biggest explosion is in healthcare, as the emphasis is on providing better care at less cost while still making a profit.
Question: How does a company start?
Baumgartner: My advice is to think about why you want to do CI. While upper management may recognize the need to improve, they have to sell that vision to the rest of the organization with a well-articulated and well-communicated message. Everyone needs to understand why they have to change because people have to change the way they do work. And it can’t be something they do for six months or a year, and then be done. CI is a lifetime. If you don’t plan on making that type of commitment, you probably shouldn’t start.
Question: What if a company doesn’t know what they want or need?
Baumgartner: I like to start by asking some questions. What are our biggest issues in terms of being able to supply our customers? Are we able to deliver our good or service on time? Do we have a lot of errors? How can we improve value to our customers? If the customer is happy, then I would look internally. How could we become more profitable? How can we give ourselves a competitive advantage in the marketplace?
Question: What can employment of CI tools do for an organization?
Baumgartner: Companies that pursue CI and look solely at the dollars miss a lot of opportunity. If you focus on making your business the best it can be, then you’re going to be profitable. That’s hard, though, in today’s world, where everything is driven on profitability. It really takes courage on the part of leadership to say, “We know we’re working on the right things, and this is going to translate into those dollar signs.” Metrics that could lead to financial gain are on-time delivery, customer satisfaction and even employee happiness. When employees feel stressed or unhappy at work, they’re more likely to be sick or call in sick, which then requires overtime and other measures to fill those positions. Overall, the company is less effective in serving its customers. If you have happy employees, you’re able to more efficiently deliver your good or service.
Question: What do you say to those who associate job elimination when hearing Lean Six Sigma (LSS), a common CI approach?
Baumgartner: If you do LSS properly, you shouldn’t have to eliminate anyone’s job. You may change the job that the individual does. Organizations that implement LSS find themselves reassigning people to different roles and more value-added work. If you do it right, you enhance the ability to compete in the marketplace. You should find yourself with an abundance of business.
Question: What should participants of TCIE’s CI-minded Professional Development courses expect?
Baumgartner: Training is a good way to get your feet wet with CI. Our instruction features interactive workshops and lessons facilitated by experts who talk from personal experience in industry. Our longer-term programs around LSS require applying skills and knowledge to solve a real-life problem. It’s this combination of information plus interaction that truly builds confidence and understanding. Realistically, our training doesn’t necessarily make someone an expert. It’s only through continual practice and application that you begin to master the skills. Even in my 17 years of experience, I’m still learning and growing.
Question: What factors are integral to achieving success with CI?
Baumgartner: If you don’t have buy-in from leadership, your implementation and results will be limited. You’ll have small pockets of success that might even thrive. But until mid- and upper management buys in, it’s not going to be sustainable enterprise-wide. So CI really needs to be baked into your strategic planning. There’s a Japanese process – called hoshin – that ensures the entire organization is aligned with and involved in the change. There is constant communication and dialogue going up and down, from management to front-line personnel and everyone in between. Engaging those who do the work that most directly impacts the customer is integral because they are probably most knowledgeable on what needs to change. They live in the broken process every day. If you do it right, they’ll move your idea beyond what you thought was possible to achieve. It’s also important to keep in mind that with CI, you will see slow results with steady improvements. Most companies don’t suddenly become unprofitable overnight. It happened over time, so you shouldn’t expect instantaneous results.