Over the past decade partnering with clients to design and deploy their continuous improvement models, we’ve learned a lot about what it takes to successfully drive an approach that is both impactful and sustainable. And there’s no doubt that one of those success factors is to have certainty and alignment on CI program scope. Simply put, everyone in the organization needs to understand what’s in and what’s out when it comes to CI.
To be clear, I’m not saying that the scope of an organization’s CI program can’t evolve over time. It absolutely can and should evolve, particularly if it’s driving impactful business results. A perfect example of this evolution can be seen by looking at DuPont, a client that we worked for several years starting in 2009. DuPont made the decision starting in 2007 to evolve its CI model from a series of relatively disconnected and functionally-focused methodologies and tools to an integrated solution called the DuPont Production System (DPS). The focus for DPS at that time was on improving performance across its global network of 200+ plant sites. It was only after DuPont successfully deployed to most of these plants (and generated more than $2 billion in value capture) that they then expanded DPS to select transactional service functions and the end-to-end supply chain under the moniker “Demand-Led Fulfillment.”
Returning to the original point, at each phase in the evolution of DPS/DLF, DuPont CI and business leadership made a deliberate and informed decision to expand scope and put a plan in place to manage the change. Where organizations can get themselves into trouble is undertaking a CI deployment without making a similarly deliberate and informed decision with regards to scope. With that in mind, there are three aspects of scope that every organization needs to consider:
Enterprise scope is about the extent of the reach of CI across the organization. Many manufacturers have followed DuPont’s path; that is, start within manufacturing operations in order to demonstrate value and prove the model before expanding into corporate departments and the end-to-end supply chain. And this approach makes sense for a couple of reasons. First, many of the methodologies and tools typically associated with CI were originally developed within the four walls of a manufacturing plant, so applying them first in that environment is logical. Second, critical to the success of a supply chain transformation journey is to have stable and reliable product supply, so manufacturing operations is a good place to start.
That being said, there is no requirement to narrow the initial enterprise scope to manufacturing operations and, in fact, for some businesses the biggest opportunity may reside outside of the manufacturing process. As an example, pharmaceutical manufacturers are more likely to start their CI journey in new product development because it’s that aspect of the business that has a disproportionate competitive impact.
Outside of manufacturing the question of enterprise scope is equally valid. Take healthcare providers…a diversified health system may need to decide whether initial enterprise scope is limited to inpatient facilities or includes outpatient clinics and/or long-term care facilities.
Within manufacturing the key question to answer on functional scope is whether to focus just on plant operations or incorporate support functions within the plant such as maintenance, quality, safety, environmental, or engineering. Some organizations will choose to remain laser focused on improving performance in operations. That’s not to say that they aren’t committed to improvement in these other functions or that these other functions don’t get involved in the improvement work taking place within operations, they just choose to manage the implementation of standard business processes through their existing functional structure. For example, they would likely have a corporate safety director who sets company standards for occupational and process safety and coordinates with the site safety managers to implement those standards at each facility. The same is likely true for quality, maintenance, engineering, etc.
In an industry like healthcare, the question of functional scope may take a different form – such as to what extent is CI focused on both the clinical and non-clinical aspects of patient care? Some hospitals will use CI methods and tools to improve non-clinical outcomes, such as streamlining patient flow or reducing the number of administrative handoffs associated with patient transfers, but will resource a separate team and managing process to improve clinical care quality and patient safety.
In my view a truly systemic approach will necessarily require pulling all of these interdependent functions into the larger CI umbrella under a single managing process. Otherwise you run the risk of sub-optimizing the benefits and confusing the very people that you need to engage. However, some organizations aren’t in a place where they can take a fully integrated functional approach from the start, so they choose to be more surgical.
Maturity scope is deciding whether the organization is committing to a long-term journey toward world class operations or a more focused journey toward stable, reliable operations. There are a few factors that come in to play when evaluating maturity scope, including:
- The current operational maturity profile of the organization
- The extent to which world class operational maturity drives competitive differentiation for your business
- The level of organizational commitment to invest in a long-term journey to world class
Referring to the last bullet point, we’ve worked with organizations (like DuPont) that committed up front to a 7-10 year journey to world class operations and others for whom that level of commitment was a bridge too far but who were nonetheless serious about making a meaningful step change in maturity. Both approaches can work assuming that there’s total organizational alignment on the vision, objectives, and expected benefits. Also, as mentioned above, your scope can evolve over time. If your organization is successful at implementing and sustaining the fundamental best practices, then you can decide at that point to seek the next level of operational maturity.
Whatever Your CI Scope, Take a Platform Approach
The question of scope is an important one, but whether your CI model is narrowly or broadly applied you need a software platform specifically designed to manage all of the various CI work streams – strategy setting, project management, business process standardization, and performance analytics. Simply put, EON is that platform. To learn more about EON, please contact us today.