“Operational  Excellence”,  Are  We  There  Yet?  By  Paul  Baker  and  Bill  France  

 

As  we  described  in  our  first  article,  the  American  and  Western  European  manufacturing  world  was  caught  by  surprise  by  the  effectiveness  of  the  Japanese  quality  initiatives  and  subsequent  successes  in  the  marketplace.      By  the  mid  1980s,  the  “Quality  Revolution”  was  officially  underway;  it  was  becoming  clear  to  top  management  that  more  was  needed  than  just  a  topical  application  of  a  few  tools  or  techniques  

such  as  “Quality  Circles”.    It  was  now  essential  to  apply  the  complete  array  of  quality  disciplines  throughout  the  entire  company  or  organization  to  address  the  power  shift  from  seller  to  buyer.    Failure  to  do  so  meant  certain  extinction.    A  shorthand  expression  for  this  comprehensive  approach  became  known  as  Total  Quality  Management.    The  seeds  for  transformational  change  had  been  planted  in  the  quest  for  “Operational  Excellence”1  that  still  persists  to  this  day.  

Initially,  no  standard  definition  for  what  comprised  “TQM”  existed.    However,  it  generally  included  the  concept  that  the  improvement  efforts  should  be  focused  on  preventing  defects  rather  than  detecting  defects  late  in  the  process.      This  evolution  in  thought  now  made  it  necessary  to  formally  address  every  aspect  of  a  product’s  life  cycle  from  cradle  to  grave.      Ford  Motor  Company  demonstrated  this  approach  in  a  convincing  way  with  the  development  of  the  highly  successful  Taurus  platform  launched  in  1986.      This  vehicle  marked  a  major  milestone  for  the  entire  automotive  industry  being  completely  designed  and  manufactured  from  square  one  with  quality  in  mind.  

The  implementation  of  TQM  in  American  industry  took  many  forms.    The  larger  Fortune  500  companies  hired  the  superstars  like  Edwards  Deming  and  Joseph  Juran  to  directly  lead  their  improvement  efforts  while  many  small  to  medium-­‐sized  companies  used  lesser  known  consultants,  in-­‐house  trainers,  or  existing  personnel  within  the  company’s  quality  organization.    

                                                                                                                         1  Operational  Excellence  Defined:    A philosophy of the workplace where problem solving, teamwork and leadership results in the ongoing improvement in an organization. The process involves focusing on the customer’s needs, Read more: http://www.businessdictionary.com/definition/operational-excellence.html#ixzz3htTFfBXE  

In  addition,  professional  organizations  along  with  many  authors  jumped  on  the  TQM  bandwagon  providing  implementers  with  an  abundance  of  resources.    Despite  the  differences  in  approach,  the  expected  outcome  was  the  same:    get  everybody  in  the  company  trained  and  effective  in  implementing  quality  methodologies  within  their  individual  sphere  of  responsibility.    The  encouraging  note  was  that  smaller  organizations  could  implement  the  TQM  concepts  without  big  names  or  big  budgets  and  still  experience  solid  transformational  change.  

A  hallmark  of  the  typical  TQM  implementation  involved  the  selection  of  empowered  cross-­‐functional  team  members  coupled  with  rigorous  training  sessions.    A  personal  note  written  by  Deming  in  1992  captures  the  spirit  and  intent  of  the  TQM  efforts:    “We  suffer  from  evil  styles  of  management,  such  as  ranking  people,  divisions,  plants  (creating  competition  between  people),  management  by  results,  failure  to  understand  cooperation  in  a  system  in  which  everybody  wins.    Transformation  is  required:    not  mere  change.    Transformation  requires  profound  knowledge”.  2      The  amount  of  time  and  resources  that  many  organizations  devoted  to  this  transformation  process  along  with  the  involvement  of  employees  at  all  levels  was  quite  impressive  to  behold.  

One  of  the  biggest  TQM  challenges  that  we  personally  faced  with  the  new  team  dynamics  was  that  it  was  much  more  difficult  to  identify  scenarios  in  which  everybody  wins.    We  found  ourselves  navigating  through  a  minefield  of  hidden  agendas  that  had  to  be  addressed  before  forward  movement  could  be  realized.      Typically,  incentive  or  bonus  programs  caused  some  team  members  to  drift  from  the  team  objective  or  where  somebody’s  non-­‐financial  “personal  win”  conflicted  with  the  team  goals.    For  example,  a  manager  at  one  company  was  getting  a  percentage  of  the  profit  made  on  custom  tooling  created  for  a  specific  customer  and  could  increase  his  personal  stake  by  cutting  corners  on  the  design  and  fabrication  standards.    This  obviously  created  downstream  problems  for  the  other  team  members.      Although  daunting  at  times  and  often  requiring  creative  solutions,  it  is  critically  important  to  effectively  understand  and  manage  this  aspect  of  teamwork.  

Another  attractive  element  of  the  TQM  approach  involved  penetrating  the  sacred  walls  of  Research  and  Development  in  order  to  build  the  product  or  service  “right”  in  the  first  place.      Conventional  wisdom  of  the  day  held  that  you  couldn’t  measure  creativity  or  demand  it  to  happen.      In  addition,  there  was  significant  pushback  that  the  product  development  schedules  couldn’t  accommodate  the  extra  prevention  activities.      Fortunately,  many  western  companies  were  beginning  to  rack  up  significant  “build-­‐it-­‐right-­‐the-­‐first-­‐time”  success  stories  like  Motorola,  Harley-­‐Davidson,  Ford  and  Louisville  Slugger.    These  early  successes  changed  the  argument  from  “we  can’t  afford  to  do  this”  to  “we  can’t  afford  not  to  do  this”.      Early  

                                                                                                                         2  Excerpt  from:    W.  Edwards  Deming,  Joyce  (edited  by)  Orsini  &  Diana  (edited  by)  Deming  Cahill.    “The  Essential  Deming:    Leadership  Principles  from  the  Father  of  Quality.”  McGraw-­‐Hill  Education,  2013.  ibooks  

involvement  in  the  design  process  remains  both  a  significant  opportunity  and  challenge  facing  organizations  today.    

All  of  us  recognize  to  some  extent  that  you  can’t  change  or  improve  on  something  that  you  cannot  measure  (e.g.,  losing  weight  or  improving  your  golf  game  is  not  possible  without  some  level  of  record  keeping).      Early  TQM  teams  learned  quickly  to  rely  heavily  on  measurement  and  tracking  data.      Decisions  and  actions  would  be  based  on  fact;  details  would  be  studied  and  analyzed  using  a  number  of  quantitative  tools.    General  TQM  training  often  included  instruction  in  basic  statistics  for  immediate  application  on  the  manufacturing  floors,  laboratories,  hospitals,  utility  companies,  and  customer  service.      Measurement  became  the  norm  for  many  business  processes  flowing  straight  into  continuous  improvement  and  Lean  Six  Sigma  programs  that  followed.    Finally,  organizations  had  the  quantitative  tools  to  measure  and  close  the  gap  with  the  foreign  competition.    

As  your  organization  strives  for  operational  excellence,  there  is  no  doubt  that  you  are  relying  on  many  of  the  foundational  tools  and  concepts  planted  during  the  TQM  days.    Terminology,  team  subtleties,  quality  in  design,  and  measurement  systems  are  still  essential  elements  today.        However,  the  dynamic  nature  of  organizations  and  the  marketplace  always  require  fresh  perspective  and  adaptability  for  effective  implementation.      Has  your  organization  arrived  at  the  destination  of  “operational  excellence  “  or  are  you  still  somewhere  on  the  journey?    With  years  of  experience  in  assembling  and  managing  high  performance  teams,  let  us  help  your  organization  breathe  new  life  into  its  quest  toward  long-­‐term  cultural  change  and  improvement.          

 

About  the  authors:  

Over  the  last  30  years,  Paul  Baker  has  been  a  solutions-­‐driven  manufacturing  business  executive  developing  positive  and  long-­‐lasting  multimillion-­‐dollar  customer  relationships  by  creating  differentiating  value  through  quality,  delivery,  technology,  and  time-­‐to-­‐market  initiatives  across  multiple  sites  and  global  markets.  In  addition,  he  has  been  a  corporate  instructor  for  Lean  Enterprise,  SPC,  Six  Sigma,  and  Program  Management.    He  is  a  certified  Lean  Six  Sigma  Black  Belt  through  Villanova  University.    Paul  is  the  Managing  Director  of  Global  Business  Consulting,  LLC,  at  www.global-­‐businessconsulting.com.  

 

During  the  last  30  years,  Bill  Franch  has  been  a  solutions-­‐driven  business  leader  with  years  of  success  producing  breakthrough  results  for  large  businesses  engaged  in  numerous  product  technologies.    He  is  a  business  strategy  specialist  and  lean  six  sigma  expert,  delivering  best-­‐in-­‐

class  performance  in  EBIT,  order  fulfillment,  cost  reduction,  and  quality  across  regional  sites  and  global  markets.  Consistently  a  top  performer  and  recipient  of  many  honors,  including  the  Shingo  Prize  and  Industry  Week's  America's  Best  Plants  awards,  Bill  is  currently  the  Managing  Director  of  Performance  Resource  Partners,  LLC,  at  www.performanceRP.com.