Sharing best practices can be a daunting task
A recent survey of approximately 50 Fortune 500 companies revealed that only 6% have an effective (in their opinion) formal methodology to integrate best practices from one facility to others.
A recent survey of approximately 50 Fortune 500 companies revealed that only 6% have an effective (in their opinion) formal methodology to integrate best practices from one facility to others. During the survey, virtually every manufacturing leader interviewed expressed an urgent need to have a comprehensive strategy to share best practices. Some of organizations interviewed have components of a system such as:
- Web-based central repository of best practices
- Best-practice summits held on a quarterly or annual basis
- Formal or informal networks of functional area leaders
- Periodic newsletters
Upon being asked about his integration processes, one leader described the company website that had been set up to post successful kaizen events. This information was available to anyone at the company’s 48 manufacturing sites across the world. The leader described the system as user-friendly and well-designed. He then went on to tell us that it was rarely utilized and was ineffective as an integration tool.
With the ongoing imperative toward continuous improvements in all aspects of manufacturing, this is surprising to say the least. Why aren’t organizations taking advantage of lessons learned within their own organizations? Why re-invent the wheel over and over again at different sites within the same company? Research indicates several major contributors to this problem:
- “Not invented here syndrome” – Lack of input in establishing the best practice
- Insecurity of the site leadership team to admit someone else had a better idea
- Lack of common, meaningful metrics across multiple sites to prove a process is superior
- Lack of accountability to implement clearly established best practices (county options are okay)
- Lack of a comprehensive deployment plan for best practices that is integrated into overall strategic plan
- Lack of the establishment of standard work and the subsequent audit system to ensure compliance
- No clear methodology to continue to improve a process once it has been established as a best practice.
The question now becomes how do we mitigate or eliminate these barriers to achieve significant gains in a relatively short time frame. To ensure success, the following strategies are for the most part mutually dependent:
One strategy to consider includes:
- The development of an overall improvement plan that is deployed by function (i.e. Human Resources)
- Improvement teams that are comprised of members of a function across numerous relevant sites
- The development of meaningful, consistent metrics across sites for the selected process.
The above actions mitigate or eliminate several of the barriers listed earlier. However, we have to establish a clear impetus for site leadership to implement best practices. A couple of options to consider:
- One of the organizations surveyed that did have an effective system insisted that the key was having one best practice established – there was no county option. Site leaders are held accountable for the implementation of the process and the expected performance gains that were demonstrated at the pilot site.
- Another option (less desirable in my opinion) is to hold site leaders accountable for the performance improvements of the pilot site, but allow the site latitude in how it achieves the results. The logical choice for the site leader is to “steal shamelessly” and focus his or her efforts on the best-practice pilots that are being developed at his or her site.
Once best practices are being shared across sites, the issue of sustainability arises. One solution offered by one of the companies surveyed is that the division or corporate functionals conduct process audits for compliance. Compliance to these audits would be added to the performance evaluations of the appropriate personnel. This would motivate site leadership to keep its own house in order with standard work development and internal audits.
The last component of the proposed comprehensive strategy is a methodology to review and implement ongoing improvement. One of the successful companies surveyed utilized a “Centers of Excellence” concept. Basically, for all major processes, a review committee was established to determine whether proposed changes should be implemented across the board. Again, when a proposal is deemed “best practice,” implementation is mandatory.
With the competitive pressures that nearly all manufacturing organizations currently face, it only makes sense to maximize operational performance and cost reduction opportunities through a robust, effective integration strategy.
Parke is a faculty member and the executive director, non-degree programs, for the University of Tennessee, Knoxville (UT), Center for Executive Education. A native of East Tennessee, Parke earned his bachelor’s degree in industrial engineering and executive MBA from UT, joining the university shortly after earning his MBA in 2007. At UT, Parke teaches courses in change leadership, performance management, and talent management.
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Annual Salary Survey
Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey