In this second part of a two-part series on operational excellence (OpEx) in the food and beverage industry, Bob Hooper, Senior Industry Consultant at Hexagon, unearths the value of setting milestones to help reach an organisation’s destination, the significance of embracing cultural change, leadership’s crucial role in change management and how to develop change champions before exploring how digitalisation supports sustainable OpEx.
The advantages of pursuing an OpEx strategy are well established: an efficient organisation is more competitive and can flourish with reduced costs and enhanced customer satisfaction. Nonetheless, growing an entire organisation into a state of excellence is not easy. However, if leadership demonstrates an ongoing commitment to achieving OpEx, employees are more compelled to deliver on levels of engagement, innovation and maintainable growth.
One of the most effective ways to define a roadmap to OpEx and to overcome these types of challenges is to establish goals that must be accomplished along the way. These milestones should cover the continuous journey from foundation through principles to methodologies and must be taken in tandem with your workforce for efficiency and sustainable long-term success.
1. Introduce the concept: Employees should be presented with the key concepts of OpEx, the desire to provide ultimate value to customers, using resources in the most efficient way. The tools to achieve OpEx are important, but starting with the concept itself is essential.
2. Reduce top-down thinking: Take a different approach from the traditional structure, where all direction comes from the top of the organisation. Frontline staff must be empowered to recognise interruptions in the flow of value and respond with solutions. Upper levels of the hierarchy should manage the strategic direction of the organisation and provide the resources that employees need to be successful.
3. Visualise the flow of value: One of the primary concerns of OpEx is transparency. If obstacles, process challenges, resource issues and poorly aligned goals can be clearly seen, they can be dealt with effectively. Many improvement tools allow visual management systems because people process images quicker than text.
4. Introduce work standards: Without a ‘best practice’ standard for both normal and abnormal workflows, there can be no improvement and a standard works as a control group for your experiments in improvement. When processes run out of control, it’s important that frontline staff know exactly how to operate. In the words of Taiichi Ohno, founder of the Toyota Production System: “Where there is no standard, there can be no kaizen.” It is essential for lean working practices.
5. Align goals and accountability: The most successful companies have a clear set of business objectives, ensuring that everyone knows how they can best contribute to achieving the most important goals. Performance evaluation is then based, in part, on engagement with improvement work.
6. Establish a framework for improvement: A structure for improvement is crucial. It should offer a central repository for all opportunities for improvement, allow for cross-functional collaboration, and offer active alerts and notifications to ensure that progress never stalls. In addition, the technology used serves as a knowledge bank, ensuring that lessons learned by the organisation are never lost.
By setting these goals and championing the achievement of each, employees from all levels of the organisation can see progress and are assured that fundamental improvement is happening in relation to the strategic roadmap for success, which ultimately leads to an increase in support and buy-in across the company as the journey proceeds.
Although marking the steps of the OpEx journey can lead an organisation down a structured path for reaching its destination, it can be a difficult path if the often-overlooked aspect of change management is not embraced throughout the entire journey (especially in regard to transforming a company’s culture). It is, in fact, one of the most common reasons why many companies fail to successfully implement an OpEx program effectively. The lack of appropriate implementation towards changing the company culture to one of continuous improvement.
So, what options are available to support an organisation’s journey to OpEx that embraces a cultural shift and nurtures it to fruition? In short: change management and leadership.
Employing change management
Prosci Research (2021), an authority on change management, positions it as ‘the application of a structured process and set of tools that are designed to lead the people side of change to achieve the desired business outcome’. And through this application, effective change management must help individuals impacted by the change to make a successful transition that enables them to engage, adopt and use it – all the while minimising resistance.
Incorporating and embracing a change management strategy from the onset of your OpEx program planning can help your organisation ensure that the people side of change is appropriately developed for engagement throughout the journey.
Leading from all levels
Reaching back to the Business Transformation & Operational Excellence Summit (BTOES) study referenced in Part 1 of this article (MEPCA, December 2022), nearly a quarter of businesses cited a lack of leadership understanding and backing as the top critical challenge. Without this, management will not provide the necessary requirements such as program commitment, financial assets or employee resources. This is why leadership is absolutely essential in establishing the right organisational structure, culture, focused processes and change management strategy that will nurture an OpEx environment.
At the end of the day, the leadership level of an organisation is responsible for developing a clear vision of what successful OpEx means for an operation and ensuring that this message is unambiguously communicated across the company. And, if carried out correctly, an aware and empowered workforce can thoughtfully apply appropriately guided steps towards achieving set OpEx goals (with unwavering support from its management). Note that the keyword here is ‘support’.
Although leadership is one half of the coin when developing and championing change, drilling change into employees will only elevate the level of resistance to it. Every employee is ultimately accountable for their ownership in change management. Change, and its management, cannot be driven purely from the top; it must exude from every person in the company.
This strategy is both bedrock and touchstone. It directs all subsequent decision-making and the methodical transmission of this strategy across the business, taking care to open channels for consultation and feedback is equally critical to ensure collective adoption.
Changing through champions
Since the successful implementation of change is not driven downwards through the company by the leadership, how can it resonate throughout the organisation? The answer lies in establishing advocates for the OpEx program, from the production floor to the executive suite – a critical part of cultural change – as OpEx affects and depends upon staff at every level of the business.
In many ways, a change champion fulfils the role of an evangelist for OpEx. They point the way toward the vision and goal of establishing a thriving company culture and encourage the behaviours that lead there.
The champions drive the ongoing search for perfection, which, while a desirable goal more than a genuinely obtainable one, leads to continuous improvement as a journey. They also keep the focus on the processes, ensuring that lessons are learned from failure and methods are improved.
The aim is to establish a company culture where staff seek to do the right thing every time. This culture, established by the ‘Five Pillars’, as outlined by Admiral Hyman G. Rickover, known as the ‘Father of the Nuclear Navy’, consist of values that are used to identify the behaviours expected of each employee and how they support the organisation’s mission and outcomes:
· A questioning attitude
· Level of knowledge
· Watch team backup
These guiding principles help organisations achieve the successful implementation, adoption, fulfilment and continuous improvement of an OpEx roadmap.
Prior to the establishment of OpEx programs, industrial sites often relied on inadequate, paper-based tools for the collection and sharing of data, adding preventable risks to procedures such as shift handover.
Even when software-based solutions for operational processes and procedures, such as operations logbooks, were introduced, they were often not interoperable with related systems of record, such as data historians and the CMMS.
Modern shift operations management software can connect these information sources to shift handover reports, operations logbooks, digital work instructions and operational orders. This enables safety-critical information to be correctly and routinely presented to operations personnel in real time, helping them to avoid potentially catastrophic incidents.
Configurable operations management software helps with change management because it’s easy to adapt, and new staff or external vendors don’t have to be brought in to manage and operate it. This is just one example of how digitalisation can increase efficiency and data insight within the business, and this further drives OpEx. Increased digitalisation directly correlates with the success of an overall OpEx initiative, as companies can optimise their ability to make better, faster and more informed decisions.
Greater data insight allows these organisations to quickly identify small yet vital improvements that can make a big difference in performance. It also provides evidence of progress that, in turn, builds confidence in the OpEx project across the company. Generating ‘quick wins’ is not the pathway to sustained success in OpEx; however, it can increase stakeholder support to affirm that things are moving in the right direction. This leads to greater trust and buy-in throughout the organisation, which sustains the OpEx program. As you move forward, the rest of your team will follow.