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Five Reasons Your Operational Excellence Program is Failing

I’ve asked Brian Guillett, one of Clarkston Consulting’s supply chain and operational excellence (OE) experts to share his thoughts and our experiences with the pitfalls our clients face when implementing supply chain OE programs and some recommendations to achieve success. This is the first of a two part series that will be published over the next few weeks.

Operational excellence (OE) culture has been known controversially for both its success and failure in business organizations. By definition, OE is an element of organizational leadership and organizational intelligence that focuses on meeting customer expectations, while applying a variety of principles, processes, systems, and tools. When applied correctly, improvements to key performance metrics are both achievable and sustainable for your business.

“Without continual growth and progress, such words as
improvement, achievement, and success, have no meaning.”
– Benjamin Franklin

When considering whether to transform their organizations to a culture of operational excellence, most companies don’t realize that a majority of operational excellence deployments are destined to fail before day one. Furthermore, there are many incidences where deployments fail rather rapidly, only 12 to 18 months after starting. There are other examples where programs languish for years until they fail miserably. These programs tend to train a few people and work a few projects, but they never deliver the benefits that they could for the company. With this in mind, we’ve identified the five key factors that consistently contribute to the failure of OE programs:

1. Misaligned Priorities

When a company undertakes a company-wide OE program, quick wins are critical to gain traction. That said, senior management support (and incentivization) for the OE implementation and associated projects is imperative. If one manager is incentivized to improve the quality of a product while another is driven by shortened lead time to the customer, their goals are inherently in competition. Both streams of work are step up from the beginning for potential failure unless they are incentivized to work together.

2. Lack of Executive Support

Taking misaligned priorities a step further, an OE program without executive level support is bound to be short-lived. Even with a motivated highly skilled team, the implications of an OE program stretch across the organization. If there isn’t widespread support from leadership, the execution doesn’t stand a chance.

3. Not Providing the Necessary Resources

An OE program can range in size from a large-scale organizational transformation to a series of small process improvement initiatives.  Given the range of people, processes, and systems that can be affected in a program, it is crucial that all impacted teams are assess the complete resource requirements. Without the involvement of the team in resource assignments, the success of the program is at risk.

4. Overtraining Instead of Starting Small

When the pendulum swings from too few resources, it often means training everyone in the company at once. While this sounds like a focused cultural change, it likely will not gain momentum without first establishing credibility. While the goal to implement an OE program company-wide is noble, it can’t happen overnight. Achieving success with a subset of a bigger issue makes company-wide buy-in faster and less cumbersome.

5. Trying to Fix Too Many Things at Once

As with over-involving employees, over-involving initiatives is just as dangerous. For a company with strong leadership buy-in and coachable employees, this is an easy temptation. The promise of improved processes to save time, money, and energy often results in too broad a scope. In the same way it’s not beneficial to train all employees at once, it behooves the company to approach issues iteratively and experience some success with one area before moving to the next.

The benefits of an OE program are promising. But, implementing operational excellence can be challenging for any organization. It is imperative to take a measured approach when launching an OE program. Stay tuned to hear some tactical tips on how to implement an operational excellence program that provides tangible, lasting business benefits.

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Tags: Supply Chain Planning & Execution, Operational Excellence
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