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The missing link to operational excellence

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AUSTRALIA’S ultra-competitive global business environment has moulded manufacturing companies to stave of threats and deal with issues in rapid time to survive. This pressure has cascaded down to operations managers. Their challenge is to achieve operational excellence with greater flexibility and at lower cost.

To meet this challenge managers are searching for improvements in process (Six Sigma, lean manufacturing, RCM) or technologies to develop that competitive edge.

Overseas knowledge disseminators, the “gurus” are providing only revision rather than revolution in these fields and the search for the “silver bullet” is proving costly and often fruitless.

The answer is much closer to home. The people working within the value adding process(es) and who operate the equipment are the ones who are responsible for manufacturing outcomes and for that matter any process or technology improvement implementation.

Therefore, if the people are under performing, the achievement of operational excellence within the organisation will be unattainable.

If the people are not directed and supported to achieve targets around operating costs, throughput rates, and quality compliance then the chance of achieving these goals will be limited.

So the question should be; how can people be effectively supported and directed to achieve operational excellence?

The diagram illustrates the concepts behind a system to achieve these ends. The content of this diagram is recognisable and simple, it is nothing new. The revolution is created when these processes and concepts are integrated effectively with the other aspects of work systems and operations management.

Essentially this model represents a people performance management system. This is a cyclic process initialised when an employee is recruited. It logically proceeds to the setting of expectations where the new recruit is advised what is expected of them both in terms of their role and the strategic business direction.

Ensuring that the employee has clear outputs and goals, establishes focus. They know what needs to be done and can go about achieving it.

Now expectations are set, the employer is responsible to ensure the employee has the competency to achieve these goals and tasks. This is accomplished via coaching and development.

Periodically as part of providing support and feedback on progress, review meetings should be held between manager and the employee to ensure the effectiveness of the employee in the job role and ascertain any further support that may be required

One of the prime actions to stem from the performance review will be rewarding performance. Obviously the level of reward is the proportional to the results of the review. This encourages beneficial behaviour and reinforces to the employee the company’s appreciation of their contribution.

By implementing work management systems that harness these concepts, improvements such as 5% increase in equipment reliability and 10% throughput rate increase, while containing operating expenditures can be readily achieved.

In addition the people performance management system can be leveraged to introduce other improvements to ensure the change is sustainable.

Why this obviously important link that people play within operations thinking is not given a higher profile is unclear.

Possibly operations managers feel that managing the people side of the business falls solely in the domain of HR or they simply do not have the capability or understanding or time to be able to manage people to the required extent.

If the lack of external support is the issue, managers need not look offshore for support. There are Australian entities that offer both consultancy support and performance management tools (software).

For more information call Asset Capability Management on 02 4933 7234.

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