A BENCHMARK VISION OF WORLD CLASS

Strategic Planning and Leadership

The primary component areas of World Class described below are not an intrinsic body of knowledge that is somehow mysteriously communicated to employees the first day they arrive at work. Rather, they are unified statements and detailed plans developed with guidance of senior management. The discipline that drives this process is called Strategic Planning.

Strategic Planning is labeled a discipline because it takes a good deal of discipline to spend the time and effort required to develop and deploy plans. Since planning is not a glamorous part of business, it is natural to feel that using the time spent planning goals to actually work towards them would speed progress. This might be true for the simple goals of individuals, and there is such a thing as overplanning. However, in an enterprise and especially those who strive to achieve manufacturing excellence, no planning simply translates into no common direction, no goals and no future.

This disciplined Strategic Planning process incorporates the thinking of many people, but is always conducted under the direct auspices of senior management. The most important job of leadership then, is having a common vision of just what Excellence is and then being able to set and maintain that vision as the operational intent and strategic direction toward being World Class.

Primary Component Areas of World Class

When World Class companies describe themselves, there are words that pop up over and over: words such as customer, quality, and responsiveness. These words are then integrated with the operational intent at a deeper level by core strategists, and supporting competencies. Even though these plants may not look or be physically alike and their products vary, the World Class Manufacturing Plants do think and act in similar ways. These similarities can then be categorized into thirteen major areas:

Core Strategies
The first four areas are core strategies and form the foundation for World Class performance. They are:

• Leadership

• Empowerment

• Partnering

• Integrated Strategies, Processes and Systems

These four core strategies represent a foundational cornerstone on which to build a structure for excellence, and are simultaneously philosophical values and tangible goals. Specifically defined they are:

• Leadership

  • Involves the role, scope and effectiveness of managers in Leading at all levels of the business. Leading must create an environment wherein mission, goals, strategy and policy align the organization in order to obtain and continually improve the business processes that are focused on quality enhancement, productivity improvement, and customer satisfaction.

• Empowerment

  • Relates to the employees ability to truly effect change within the organization; Empowerment means that an environment exists which unleashes and fully utilizes each person's talents, skills, diversity and creativity through individual commitment and team effectiveness. This evolutionary process gives each employee the opportunity to feel confident, be heard and respected - to be involved. The result is job enrichment, maximum productivity, achievement of organizational objectives, and a continued commitment to the development of all employees.

• Partnering

  • Relates to the Company's efforts to establish and improve teaming relationships with all relevant and appropriate stakeholders. Partnering is an extension of the same philosophy, methods, systems and processes found in the leadership and empowerment core strategies. Partnering includes suppliers, employees, unions, schools, community and government. It involves the concern for safety and environmental responsibility and its recognition of the community at-large; and it includes the role and impact that a company can have on the local, regional, and national communities in which they operate.

• Integrated Strategies, Processes and Systems

  • Relates to the creation of a driving force towards business innovations and improvements based on three key concepts:

    1. that the customer should occupy the very center of an operation and that the customer's desires and needs must be met.

    2. That the vision and strategy for continuous improvement be continually integrated within and throughout the company's system's, methods, processes and people.

    3. that the integration include the ability of a business to quickly, efficiently, and effectively respond to change.

Supporting Competencies
The next nine areas are the supporting competencies that help achieve the goals defined in the core strategies above; they are:

These competencies allow recognition of the fact that a business is more than simply a production line that converts raw materials into finished goods. World Class competencies form a living system of "Best Practices" that has impact far beyond the company's walls. These competencies apply to the people who work in the business and the vendors that supply them. They also include the technologies that support the operation and the new products that are created as a result. Specifically defined, they are:

• Employee Involvement

  • Represents a team-based structure capable of developing into self-managed work teams that are fully responsible for day-to-day operations. Recognizes that people are appreciating assets and that companies should not be hesitant to invest heavily in their employees.

• Supply Management

  • Represents the extension of the employee involvement concept down the supply chain. Involves looking far beyond the simple invoiced cost of raw materials and considers the total of working with a particular supply partner. It expands the scope of the actual purchase price to include inventory storage and handling, poor parts quality, and missed shipments. It recognizes that suppliers can and should play an important role in functions that were once considered proprietary such as product design and customer service.

• Technology

  • Includes the ability to adapt and implement the latest technology to support the drive to agility, quality, and customer satisfaction and world-class status. Is represented by electronic communications networks that are connected to suppliers and customers; buy real-time manufacturing data that arrives before the product itself; by automated production systems to reduce variation; and computerized design tools that build quality into new products before they physically exist.

• Product Development

  • Includes the design of new products and the continuous improvement of existing products. Supports the understanding that new products, short development cycles, and low product costs are critical factors in long-term success. Involved harnessing the expertise of employees, suppliers, and customers to define and create new products with an eye toward total costs.

• Measured Customer Satisfaction

  • Includes development and analysis of measures specific to achieving and maintaining customer satisfaction.

    • customer reject rates

    • mis-shipments

    • incomplete orders

    • on-time vs. late deliveries

    • re-order rate and/ market share

    • customer surveys

    • customer awards

    • other appropriate awards

• Measured Quality and Productivity

  • Includes development and analysis of measures specific to achieving and maintaining quality enhancements and productivity improvements.
    quality enhancement measures

    • overall cost of quality, as percent of sales, total manufacturing cost or other appropriate baseline

    • process variation measures

    • scrap rate

    • reword costs and rates

    • downtime, in terms of both lost time and dollar cost

    • warranty cost

    • first-pass yield rates

    • other appropriate measures

    productivity improvement measures

    labor productivity materials productivity/yield energy productivity capital productivity total productivity inventory turnover

    cycle time reductions changeover reductions lead-time reductions utilization of resources transport & logistics other appropriate measures

• Manufacturing Process Integration

  • Refers to the learning, application and integration of lean manufacturing concepts and techniques to the core manufacturing processes.

    • standardized work, time and operational standards

    • systematic identification and elimination of all forms of waste

    • implementation of time-based/just-in-time manufacturing

    • cellular process concepts applied to process manufacturing

    • fundamental workplace improvement through "Five S" improvement

    • autonomation (Jidoka) and multi-process handling

    • total productive maintenance (TPM)

    • pulling work/materials through the production sequence (Kanban)

    • quick changeover and set-up reductions

    • concurrent or simultaneous engineering

    • CAD/CAM and computer integrated manufacturing

    • distributing work intelligently and efficiently (Heijunka)

• Quality and Productivity Methods Integration

  • Refers to the learning, application and integration of systematic process quality control aimed at achieving zero defects and 100% customer satisfaction while improving productivity and reducing costs through the elimination of non-value-added wastes.

    • source inspection and poka-yolk techniques to eliminate defects at the source in order to achieve zero defects

    • use of tools of quality, i.e., pareto charts, storyboarding, cause and effect diagrams, 5-why's or similar problem solving techniques

    • quality function deployment

    • statistical process control

    • visual control systems

    • variety reduction

• Manufacturing and Business Integration

  • Refers to the application of improvement techniques to non-manufacturing functions and their degree of integration

    • incorporation of continuous improvement to the organization's overall mission, strategy, goals, and policies throughout all aspects of the business, particularly the non-manufacturing departments and functions

    • waste and non-value added activity elimination in all function units of the organization (including customer service, engineering, finance/accounting, human resources, sales and marketing maintenance, materials management/purchasing, MIS, etc.)

    • innovation and product development activity linking all relevant functional units to manufacturing, including product improvement and/or the development of new products

    • commitment to productivity improvement, quality enhancement, and customer satisfaction improvement projects and/or change processes in long range plans, capital budgets, training and human resource development, marketing plans, and strategic reviews by all functional business units

    • direct contact with customers and suppliers to foster improved quality and productivity efforts by all relevant business units

Summary - Core Strategies and Supporting Competencies
Together, these core strategies and supporting competencies comprise a holistic view of excellence and represent an important base concept.

World Class Companies repeatedly demonstrate that there is no alchemist's formula for an instantaneous transformation to world-class. Rather, that transformation is a long-term evolutionary effort. It demands a tremendous commitment from managers and every other employee. It also requires an investment in organizational resources and often means radical (read "painful") change in the culture and structure of the workplace. If that sounds too tough, so be it. It is important not to understate the effort requires to create a world-class organization. Doing this would only understate the accomplishments of those who have achieved this level of excellence and mislead those who would undertake a similar journey.